How do you sell a next-gen console?

With not a great deal of note happening in the arid console space this summer, gossiping about next-gen consoles has proved an irresistibly fertile way of passing the time at industry gatherings.

It'll be a "quantum leap", Alan Wake developer Remedy chirruped excitedly to this site last week. Which was in stark contrast to the underwhelmed shrug I got from a middleware company I chatted to off the record at Gamescom, familiar with both Orbis and Durango.

Seven years on from the launch of Xbox 360, the first thing to say is it had bloody better be a "quantum leap" from the creaking innards of today's systems. The issue, naturally, isn't that the tech clearly will be an order of magnitude more powerful - it's how platform holders and software publishers can articulate this and "sell" the next-gen vision to spoilt-for-choice consumers via marketing and content.

That there are mixed feelings, depending on who you speak to, about the potential of the next console cycle is hardly in doubt. With official announcements from Microsoft and Sony expected well within the next 12 months, apathy from within certain quarters of the industry itself is worrying if not altogether surprising. But what about consumers?

The HD era began with Xbox 360 as a pure gaming machine; now it's an entertainment hub that also happens to play games. Microsoft always said this generation would be about software and services, and EA now explicitly sees its games less as "products" and more as "services", with Peter Moore recently observing: "Games are turning into 365 days a year live operation experiences".

"Games are turning into 365 days a year live operation experiences".

EA's Peter Moore

As consumers become ever more tied into, and therefore get more out of, their favourite games, then, the argument for upgrading to another expensive box becomes exponentially harder to make.

With little expectation of triple-A software prices falling, all the pressure is on the hardware cost and where that will fit into a diverse market. Ever since Microsoft launched its $99 subsidised Xbox 360 trial in the US earlier this year, there's been much chin-stroking over whether this model will be adopted for next-gen systems.

The irrepressible Michael Pachter is betting that Microsoft is already tying up deals with US cable companies to offer a subsidised next-gen Xbox at a fraction of the standalone price, in exchange for signing up to something like a two-year cable/Xbox Live contract.

It's an enormously appealing proposition. And, irrespective of the details of how this might work across different territories, I'm increasingly of the view that Microsoft and Sony (Nintendo, as ever, ploughs its own furrow) can ill afford not to make it work.

The obvious example of subsidised hardware in the games space to look to is iPhone. Who buys one of those for £500 (the standalone price of the cheapest 4S)? Meanwhile, we're all comfortable these days subscribing to all sorts of related services for our entertainment, from Sky and Virgin to Napster and Spotify.

"The obvious example of subsidised hardware in the games space to look to is iPhone."

The key advantage Microsoft has over Sony here are the many, many millions of customers and credit cards it already has signed up and used to subscribing regularly to a service: Xbox Live. (Sony has the credit cards - let's not go there - but PlayStation Plus is hardly in the same league as Live).

Furthermore, while Sony has broader concerns to deal with across the whole enterprise, Microsoft has the financial clout to spend whatever it takes to help make the next Xbox a success at launch. It will presumably be encouraged here by what it achieved with Kinect. Despite widespread dismay over the price - and, hands up, I thought they were nuts to come in over £100 - the reported $500m the company splurged on messaging was enough to confer 'must buy' status upon it.

As a result, Kinect remains the fastest-selling consumer electronics product in history, beating anything even Apple has achieved. But, needless to say, its success wasn't as straightforward as chucking enough money at a problem: it also had the good fortune to appear revolutionary and represent a step change, perfectly captured by its unimprovable slogan: "You are the controller".

That the reality fell so clumsily short of the vision is beside the point: at the time it captured everyone's imagination. But what step change is the next gen likely to offer at first?

The leap to HD, though it required a not inconsiderable investment in a compatible display, was a clear point of difference last time around. Take away HD and how much better to the untrained eye did a PS3 launch title look compared with, say, PS2's God of War II?

"I've long believed games will become the dominant entertainment form of our age, and I really don't care what platform(s) that happens on."

When you consider that the typical Sony and Microsoft launch line-up is a predictable exercise in genre box-ticking - a shooter, a platformer, a franchise sports game, an arcade racing game, something weird involving old Sega IP - day one software is generally about small steps not giant leaps.

Looking at every single launch title across PS2, Xbox, Xbox 360 and PS3, I see only a single, clear system-seller in there: the original Halo. Now, you could argue - and I wouldn't disagree - that Xbox was the only one of these systems that desperately needed a standout launch title to justify its existence. What I would say now is, for the first time in two cycles, and entering into a far less certain world as they will be, both PS4 and the next Xbox need a 'killer app' to get them out of the blocks.

I've long believed games will become the dominant entertainment form of our age, and I really don't care what platform(s) that happens on. For consoles to retain a key role in that story, though, they need to remain relevant to the masses while continuing to grow their audience.

And that's what's fascinating about this nerve-wracking moment of transition for the console business: the system-seller no longer needs to be a game. This time, it could be the contract.