Ubisoft's comments on PS5 and Xbox Series X backward compatibility have been blown wildly out of proportion.
I've seen lots of reports lately that Ubisoft said next-gen consoles like the PS5 will play PS1, PS2, and even PS3 legacy games. This isn't accurate. After listening to Ubisoft Q3'20 earnings call, I'm confident that isn't what Ubisoft CEO Yves Guillemot actually said, nor is it what he meant to say.
All Mr. Guillemot said was that next-gen will play current-gen games, and that the overlap between generations will catalyze sales across both life cycles. There's no indication he's talking about next-gen systems playing currently-unsupported titles. The basic premise is if current-gen consoles can play it, next-gen systems will too, and both Sony and Microsoft have confirmed backward compatibility. (Xbox Series X will play four generations' worth of Xbox games, for example.)
Here's what the Ubisoft CEO said during the Q&A portion of the call:
"What we are going to do, as do we regularly, is to take advantage of the potential of the new machines. That potential is really high. So we think players will be very impressed by the quality of what those new consoles will bring to the market.
"What will also be new in this industry is those consoles will be be running almost all the back catalog of the previous consoles, it will be something new in the industry and will help the old generation to continue to be big consoles on the market for years to come.
"That's something new that will actually grow the market. So we will have lots of new machines sold and lots of marketing done to promote the more powerful machines, and on top we will have an increase of the total addressable market thanks to the fact that the old consoles will remain very strong consoles for all the games that will be published."
The middle part is what's tripping everyone up. But it's not what you think.
The part about next-gen running "almost the all the back catalog of the previous consoles" doesn't mean all previous consoles, just the ones that immediately preceded the PlayStation 5 and Xbox Series X. And since there's more than one current-gen console, plurality makes sense here.
The full quote, especially the bit at the bottom, adds more color to Mr. Guillemot's meaning.
This kind of cross-gen transition is indeed something new for the industry. Native Xbox 360 game support didn't immediately cross over to the Xbox One, and the PlayStation 4 didn't play PS3 games (and it still doesn't) at launch. Users had to not only buy new hardware, but buy new software too. That won't be the case with next-gen. The idea is to have everything you own now transfer over so you keep playing (and consequently, keep paying for subscriptions, microtransactions, or buying new games on storefronts) and don't move on to another platform.
Both Sony and Microsoft have confirmed current-gen consoles will live alongside next-gen for quite some time, and Ubisoft corroborates the multi-year overlap (Microsoft confirmed no Xbox SX exclusives will happen for 2 years, and Sony confirmed the PS4 will live alongside the PS5 until at least 2022).
Also remember that Ubisoft, like every other major publisher and developer, is currently making games for both generations.
Ubisoft plans to release 5 major AAA games in the next six months, three of which will be a new Assassin's Creed, a new Far Cry, and a new Watch Dogs game. All of them will be optimized for next-gen consoles, Ubisoft confirms. And we should likewise expect them to launch on PS4 and Xbox One too, lest they miss out on the huge established install bases of both systems.
The company understands that back catalog games on PS4 and Xbox One will continue to sell as gamers buy into next-gen thanks to backward compatibility, and that current-gen hardware will likewise continue to sell because it's not being phased out with too many immediate next-gen exclusives.
The real story here is Ubisoft's words about next-gen and current-gen coexisting. This, to me, hints at a dual-SKU approach that could see both PS4 and PS5 versions of games releasing post-Holiday 2020.
Whatever happens in Holiday 2020, we know one thing: Console generations are blurring and next-gen is just an extension of current-gen.
Next-gen is a relay baton wand hand-off, the passing of the torch, a transition that ensures all the greatest things of the PlayStation 4 and Xbox One family carry forward with the PlayStation 5 and Xbox Series X life cycle.
Ubisoft plans to reveal more info on its next-gen initiatives in May, and will have a big showcase at E3 2020.
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