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Are Gamers Ready to Buy New Consoles? Some AAA Video Game CEOs Aren’t Sure

July 5, 2019, 12:00 PM UTC

It’s official: The next generation of video games systems launches next fall. Microsoft, at E3 last month, confirmed Project Scarlett, the code name for its next generation system, while Sony a few weeks prior, spilled a few beans about its own next gen system, widely expected to be called PlayStation 5.

The Xbox One and PS4, though, are at their peaks of creativity when it comes to software. Neither system is really showing its age, which raises questions on whether gamers are ready to plunk down $400, $500 or more for the latest and greatest hardware. (Nintendo rolled out its new hardware—the Switch—in 2017 and isn’t expected to announce radically new hardware in the near future.)

Ultimately, of course, the answer to that will lie with the games. Software sells hardware. And, so far, there’s not a lot of hard information about what the new titles the consoles will launch with (though Microsoft has already made it clear it intends to come out strong). But some leaders of the industry’s biggest game publishers are stopping short of giving the upcoming consoles their full-throated support.

“I think it will come down to what the next generation consoles are able to show, what they’re they able to provide,” Yosuke Matsuda, CEO of Square Enix told Fortune. “The PS4 and the Xbox One—there are already a lot of them out there and they offer a very stable playing environment. There’s lots of fun games to play on them. So from the customer’s perspective, if they don’t offer anything special then there’d be no reason to go out of your way to switch.”

Strauss Zelnick, CEO of Take-Two Interactive Software, also seems a bit skeptical.

“It’s very early,” he says. “The announcement was just made…. [But] in a world where [digital distribution service] Steam can represent 40% of a so-called console’s retail, it’s going to be hard to get the same level of consumer excitement.”

Others, though, are much more optimistic about the next generation of consoles. New hardware, they say, encourages creativity among developers and it generates excitement among consumers—even those who wait a while to buy the new systems.

Publishers, at this point, have been briefed on many of the features of the new systems, including some that haven’t been revealed to the general public. And while he, of course, doesn’t reveal any additional features, Yves Guillemot, CEO of Ubisoft, says he’s confident the next generation of game systems will excite players just as much as the current one.

“They are both good consoles,” he says. “A lot of work has been put into both machines. They are bringing a good evolution to the industry…. And we will be able to see games that everyone will want to play.”

Xbox’s “Project Scarlett” vs. Sony’s “PlayStation 5”: How the systems compare

There’s still a lot we don’t know about the next generation of game machines. Even their launch dates are over a year away. (Microsoft has only said 2020 and Sony hasn’t even confirmed a timeframe, but the two consoles typically launch within weeks of each other in November.)

What has been revealed, though, is actually fairly similar on many fronts. Here’s what Microsoft and Sony have publicly had to say about their next generation game systems.

Sony’s “PlayStation 5”

Processor – The next PlayStation will use a third generation AMD Ryzen CPU and a custom AMD Radeon Navi graphics chip to showcase its titles.

Storage – Sony has touted the use of a custom SSD hard drive in its next console, which will result in faster game load times, the amount of time between when a player selects a game and is actually able to start playing. To date, this has been one of the company’s big selling points of the system.

Resolution – Up to 8K

Backwards Compatibility? – All PlayStation 4 games will be playable on the new system.

Software lineup – Sony hasn’t announced any games that will launch with or around the same time as its next generation system yet. Last year at E3, though, the company showcased Ghost of Tsushima, a PlayStation exclusive that did not have a PS4 launch date attached to it. It’s possible that will be one of the games leading the charge for the PS5’s launch.

Microsoft’s “Project Scarlett”

Processor – AMD will power the next Xbox as well, with a Custom Zen 2 CPU. The graphics processor has not been unveiled yet. Microsoft, at E3, said its next-gen Xbox will offer “four times the power” of the Xbox One X, currently the most powerful console on the market.

Storage – Like Sony, Microsoft is using a custom SSD drive to shrink load times. Neither Microsoft nor Sony has divulged how much storage it will offer on these drives.

Resolution – Up to 8K

Backwards Compatibility? – Xbox One games will play on the system, as will all of the Xbox and Xbox 360 games that are currently backward compatible today.

Software lineup – Microsoft has made it clear it intends to start the next generation strong. Halo Infinite, the next game in the company’s flagship franchise, will launch with the next Xbox.

Microsoft has also been on a buying spree over the past 18 months, purchasing a number of development studios, including Ninja Theory (makers of Hellblade and Heavenly Sword), Forza Horizon developer Playground Games, Compulsion Games (creators of We Happy Few), State of Decay creator Undead Labs and DoubleFine Productions, makers of Psychonauts 2 and several other fan-favorites. Beyond that, the company launched a new studio headed by Darrell Gallagher, who formerly lead the studio behind the relaunch of Tomb Raider.

Few of those studios have shown new work for the Xbox One, which may imply that they’re hard at work making exclusive games for the early days of Microsoft’s next console.

There are a few wild cards at play with this generation as well. President Trump’s proposed 25% tariff on Chinese electronics could result in higher than expected retail prices, though Sony and Microsoft will work hard to avoid this. Console hardware is typically sold at a loss to the manufacturers in the early days, as they try to build a large installed base of customers. (Those losses are made up later from royalties on software sales.)