Microsoft's Xbox 360 five year plan: Can it work?

Amidst all the noise and fuss around the Xbox One, Microsoft appears to have confirmed that it’ll continue supporting and supplying the Xbox 360 for a further half decade. In one sense that’s admirable, but why split the user base?
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The forced obsolescence conundrum
Yusuf Mehdi, Microsoft’s Senior vice president of Interactive Entertainment Business (because big fancy titles are a thing amongst US tech companies) told OXM that it plans to continue producing and supporting the Xbox 360 for at least the next five years, with the plan to “break a 100 million unit installed base. To sell another 25 million, half of those will probably come from replacements, but half will come from new buyers.”
That’s an interesting plan, and in one sense it’s highly admirable. Microsoft copped quite a bit of flack when it came to the first generation chunky Xbox, because the speed with which it dropped software support was rather alarming. It was suddenly all about the new toy, and the old box was something that wasn’t talked about all that much, if at all. Backwards compatibility was developed for a handful of titles, but we know that this time around backwards compatibility isn’t even an issue. Still, there’s a lot of Xbox 360 users out there who might not be looking at upgrading any time soon.
At the same time, though, fragmenting the user base, and making the new shiny toy less interesting because there’s still plenty of play left in the old one? That might not be the wisest choice either. I’m all for a touch of retro gaming (you might just have figured that one out by now), but having too many different and confusing supported products out in the market at once is a recipe for disaster. Just ask SEGA about the Megadrive/Mega-CD/32X/Saturn debacle. There’s reason why Nintendo’s output is pretty much pure Wii U and 3DS right now; it sold a lot of DS handhelds and Wii consoles, but that’s money it already has. Making the customers aware that the old systems still work might just convince them to hold out a bit longer.
So it’s a delicate balancing act. We’ll no doubt see more from Microsoft as E3 rolls past, and Yusuf Mehdi’s comments aren’t all that specific. I’d be willing to bet that within 5 years there won’t be a market for new Xbox 360 titles at all unless Microsoft’s got something truly astonishing to reveal at E3. A price cut isn’t going to be quite enough, even though it’s pretty inevitable. I guess we’ll have to wait and see.
Source: OXM
Image: yumanuma