At the E3 event last week, Microsoft announced Xbox One Slim and Xbox Project Scorpio. The One S console will be 4K-compatible and include the high dynamic range (HDR) color support. On the other hand, the Project Scorpio was hailed as the most powerful gaming console ever made. However, a research firm says Microsoft has effectively killed the Xbox One S even before its release by announcing the Scorpio.

Project Scorpio May Spell Doom For Xbox One S
Source: Microsoft

Why Project Scorpio poses threat to Xbox One S

Research firm DFC said in a note to investors that by announcing a more powerful Project Scorpio, Microsoft has done more harm than good to the Xbox One S. The software giant shouldn’t have announced the two at the same time. Sony faces a similar issue with PlayStation Neo, but it made a smart move by not showing the Neo at E3. There is still some mystery around the console, and Sony is not designing a PS 4 Slim.

The Project Scorpio will arrive during the holiday season of 2017, but the Xbox One S is arriving this August. There are a lot of gamers interested in an Xbox One this holiday season. But most of them would now prefer to wait for the more powerful Scorpio. By announcing the Scorpio at E3, Microsoft has effectively asked those gamers to wait until late 2017. The buzz around the Project Scorpio is unlikely to die anytime soon.

Will Microsoft exit the gaming business?

DFC also criticized Microsoft’s mixed messaging. The Redmond-based company plans to bring the future Xbox One games to Windows 10 PCs. When the new games will be available on PC, why should people buy a new console? Even if you want to invest in a console, why buy now when the Scorpio will be here in a year? It may give Sony and Nintendo an advantage over Microsoft.

DFC believes Microsoft may not even have a gaming division by the time Scorpio arrives. Microsoft chief executive Satya Nadella announced the acquisition of LinkedIn exactly when the E3 event was underway. Project Scorpio will have 6 teraflops of GPU, and will support virtual reality.