Xbox boss Phil Spencer says selling more consoles isn't Microsoft's priority

[midian182]

Why it matters: You might think that all companies judge the success of their consoles by unit sales, but not Microsoft, apparently. Head of Xbox Phil Spencer recently admitted that the Redmond firm isn’t concerned about selling more machines than rivals Sony and Nintendo.

Speaking on an episode of Gary Whitta’s Animal Talking podcast, Spencer said, “If [selling more consoles than Sony and Nintendo] was our approach, we wouldn’t put our games on PC. We wouldn’t put our games on Xbox One; we wouldn’t do xCloud and allow people to play games on their phones.”

“‘How many consoles do I sell versus how many consoles does another company sell,’” he added. “Sony or Nintendo or other companies back in the day, that’s not our approach.”

Essentially, Spencer says that Microsoft values the experiences it offers players over pure unit sales. He notes that unlike the PlayStation 5, there are no Xbox Series X exclusives, which would have encouraged more consumers to opt for the machine. XSX titles will be available across its current-gen consoles, the PC, and its upcoming xCloud game streaming service that counts smartphones among its compatible platforms. Microsoft also makes plenty of money from its Game Pass subscription service, which will bundle xCloud in its Ultimate tier this September. Moreover, the company can expect more people to subscribe to Game Pass once the XSX launches.

Focusing on its services is a good strategy for Microsoft, given that Sony appears to have the edge in the upcoming console wars. The XSX and PS5 are still a few months away, but a recent ‘most likely to buy’ survey saw 84 percent of gamers pick Sony’s product over its rival. We’ve also heard that Sony is expecting to ship between 120 million to 170 million units—double those of the Xbox Series X. Should sales be closer to the latter estimate, the PS5 would be the best-selling console of all time. But one person who believes Microsoft has the better machine is Valve boss Gabe Newell.

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https://www.techspot.com/news/86397-xbox-boss-phil-spencer-selling-more-consoles-isnt.html

 

[m4a4]

I see the strategy in this increasingly digital world. And as someone that has a decent gaming PC, I certainly do appreciate it lol

 

[Uncle Al]

HAHAHAHAHA ..... that is such a crock! They don't care how many sell, you know somebody was up late doing the Coke this weekend .....

 

[cldmstrsn]

If you dont care then stop making xbox and start putting all efforts on PC. Thanks Phil

 

[redgarl]

I must admit that phil got a point here. his goal is to promote xbox game pass to as many platform possible to sell games. basically microsft want to be a multiplatform steam... they aim for the money... but without strong exclusives pushing the boundary of your hardware, then you are going to fail. sony and nintendo win because their first party games are system seller and better than all the third party games out there, plain and simple.

 

[Lounds]

Microsoft wants to be the Netflix of gaming.

 

[dangh]

And I don't care about xbox at all. As a gamer, I want to play good games and not to have too much clutter, it is already busy with all the accessories here. So, PC, PS and Nintendo covers all my gaming needs.
And I had remote play on my ps4 for ages - used it a few times, so... cxloud? to do same as Nintendo, but with streaming issues and worse titles? that what nintendo is for.
GaaS is simply a way to put yet another crappy service for people to sink money into that.

 

[gigantor21]

Between this and Nintendo making a console-handheld hybrid, I'd say the "console war" is over and done with.

 

[Irata]

And I don't care about xbox at all. As a gamer, I want to play good games and not to have too much clutter, it is already busy with all the accessories here. So, PC, PS and Nintendo covers all my gaming needs.

....

So why did you bother wasting your time reading and commenting on the article in the first place ?

 

[kiwigraeme]

HAHAHAHAHA ..... that is such a crock! They don't care how many sell, you know somebody was up late doing the Coke this weekend .....

You know they make the money on the games/eco system - You know this is the future ? From now on ( unless some unknown ) on future consoles will be backwards compatible. I have brought Xboxes as gifts - when they release mid-cycle packages - with good games ( eg that purple one ) - think I got it for about $160 with 2 or 3 AAA games - hell controllers are $50 . A lot of gamers will eventually get both .
As I have said before I went with PS as more G and PG games for family .
If I was MS I would do a double attack
1) Best media centre ever - wipe out nvidia shield , roku, smart TVs etc = allow modding etc
2) go after Nintendo - make the mosts kid friendly or family friendly games - ie release a 4 simple control set for Kart/Party/mini round /co=op and buzz type games .

Personally I will buy PS5.V2 package deal with extra controller( if poss or buy heavily discounted one anytime ) and games at much cheaper than launch - so wait of at least a year .

TL/DR Xboxpass is shockingly good value - increase utility of XBoX for family and media

edited another reason for me waiting - is even though OLEDs have dropped in price in USA - not so much in NZ - so should happen in year or 2 - still happy with Panasonic Plasma- ie no 4K- plus I never buy games on release $30 max for me pref GOTY

 

[MaitieS]

Xbox Game Pass is the future and I am so happy that Microsoft is pushing it so hard. This overall pass will just get better in the next few years and in the end of this next-gen we will all see how worthy it was.

+ 5G being more common xCloud will be even better.

When I was a kid I was dreaming about something like xCloud.

I am just so excited even for PlayStation. Like who said that we can not enjoy both? Everyone has their place like did everyone forgot how greedy Sony was about cross play? Imagine having just Sony as the only console...

 

[Burty117]

They're pushing Xbox Game Pass so hard because they're probably making no money on it right now, it's way too good a value, once they have enough people hooked, the price will just constantly rise.

I'm against these subscription services, I tend to play a lot of games sure but I spend most my time on two or at max, three games a year, I would end up spending considerably more using something like Xbox Game Pass to play the same games.

I don't mind the subscription service alongside the normal full price for a game but I would hate it if games went the same way as music/tv/films. A piece of music tends to only last 3 minutes, a TV show completely depends on the amount of episodes and how long they are and movies are usually 2-3 hours. I can play a single video game for easily 100+ hours with quite a few games in my library reaching 400+ hours over the past 10 years.

 

[Edster]

Sony ain't the competition anymore. It is like a motorbike to a car, there is overlap in the market they operate in but they are not actively combating another as much anymore. The XSX is to retain the Xbox fans who don't want to look at full fledged PC gaming, it is literally backwards compatibility of market share in physical form.

MS had to cough up a lot of money on the red ring of death for the 360, it, like Sony likely, make a loss on the console itself this generation (or afford to sell it for profit since they aren't aiming at console sales market share). So why not encourage people to "BYOD" to the platform and have a 3rd party deal with hardware issues? So now, it doesn't matter they sell less, as they can take a chunk off the PC market. People who chose Nintendo and Sony are still up for grabs if they also own a gaming PC as well as sell games to PC gamers

Like Burty said, the price seems too good to be true right now, but it also mainly consist of 1st party and old releases. Subscription model on gaming for me only works if you are big enough (WoW) and have a good enough gate to features (online gaming on consoles). Games for me is significant time investment and I only play the games I really want to, whether for quality or social gaming. The range of games just don't extend far enough for me. It doesn't have any of recently played 3rd party games on my PS4 nor any on PC nor on wish list. I have barely touched the free games given to me from PS+, if I am willing to pay full price for a brand new game over finishing a month worth of free games I have accumulated, I can't see myself actually utilizing a Game Pass service unless there is a game I really need to play.


MS sort had to take this route anyway. The fandom of the 1st party games pales to PS4 and Nintendo, poll after poll show the Playstation family just have more fans/users. They need a PS3 level of screw up to catch up, so they rather play another game. Pun fully intended.

 

[Edito]

Success will be measured in Game Pass subscribe number... that only them can provide and every one paying 1USD, if they want to go Digital they should just stop making the consoles because if they are doing consoles like the series X they should treat it with respect.

 

[Farkinell]

I see the strategy in this increasingly digital world. And as someone that has a decent gaming PC, I certainly do appreciate it lol

It’s an interesting strategy as it suggests to get the best overall gaming experience users should opt for the PS5 + PC combo. I wonder how many PC gamers will buy an XSX?

I used to (years ago) be an Xbox + PC combo, Xbox for controller support and general simplicity and PC for FPS plus exclusives. Now will full controller support across the board and no exclusives I’m wondering how much of the market will now just stick to PC or go PC + PS5, leaving out Xbox altogether.

 

[drjekelmrhyde]

This was never a farking secret. Microsoft Xbox division makes way more money off services than Sony PS services.
https://www.businessinsider.com/xbox-game-pass-is-much-bigger-than-playstation-now-2020-5

 

[drjekelmrhyde]

And from a Pro Sony site https://www.playstationlifestyle.net/2020/07/24/psnow-inferior-xbox-game-pass/

 

[Farkinell]

For sure this is not new information, but MS laying it out clearly and deliberately (without looking at sales data) just highlights the stark contract between how the two are prioritising physical hardware.

I do wonder whether MS’s commitment to bringing all the games to all of the people will be detrimental to the experience of people that can play at the highest possible performance.

 

[JimboBimbo]

Phil is so full of ****. How can a company invest hundreds of millions in research and development to create something like the Xbox Series X, and then "not care" how many they sell??? Helloooo, Phil... anybody home??? You gotta be kidding me...

If they were even remotely honest and serious about that, they would do a SEGA and stop making consoles, and sell their games and services on PC, Playstation and Nintendo.

 

[m4a4]

It’s an interesting strategy as it suggests to get the best overall gaming experience users should opt for the PS5 + PC combo. I wonder how many PC gamers will buy an XSX?

I used to (years ago) be an Xbox + PC combo, Xbox for controller support and general simplicity and PC for FPS plus exclusives. Now will full controller support across the board and no exclusives I’m wondering how much of the market will now just stick to PC or go PC + PS5, leaving out Xbox altogether.

I have both X1 and PS4 along with my PC. But honestly, at this point with how many games are coming out on it (and how relatively little I've played console in the past several years), I personally might not even pick up a PS5 until late in the cycle. Might even get Game Pass for PC (or even the Xbox pass for my X1) long before buying more hardware.

And then Sony hadn't been too friendly towards gamers recently (their hand got forced for cross-play), and I'm not going to let exclusives sway me much.

Don't know how many other PC gamers feel this way, but I suspect that more of us are less likely to buy a console these days without a good excuse (convenience of a console isn't one of them for me). Which means that MS is in a much better position to get my money.

 

[Nestea]

Crossplay is the biggest fad ever. You'll only get more cheaters on consoles with crossplay unless you can opt-out.

>But one person who believes Microsoft has the better machine is Valve boss Gabe Newell.
I saw him making that statement. Kind of lost a bit of respect for him. seemed more like a petty to move to oppose swiney, more-so the way he said it.

 

[pencea]

Phil is so full of ****. How can a company invest hundreds of millions in research and development to create something like the Xbox Series X, and then "not care" how many they sell??? Helloooo, Phil... anybody home??? You gotta be kidding me...

Absolutely agree.

 

[LeroN]

This was never a farking secret. Microsoft Xbox division makes way more money off services than Sony PS services.
https://www.businessinsider.com/xbox-game-pass-is-much-bigger-than-playstation-now-2020-5

It's not a secret that MS has had higher profit per console comparing to Sony since MS has revealed XB1 even before the Game Pass and XB1 X arriving. This is why the Phil's words sound abnormal.

With the new budget XB Series S that has 4TF performance and no BD-drive, MS cuts off the backward compatibility for owners of physical disk of two previous generation. Actually it looks like a device for MS game streaming services rather then for a positive gameplay experience, but we heard no plans if the Project xCloud is supposed to be launched on PC or XB. Also it's unclear what developers will spend efforts to optimize games for the console that is x3 less powerful, and even less powerful then current XB1 X. But the budget XB1 is being the most profitable console for MS over XB1X so in my opinion they kill the goose that lays the golden eggs.
The crossplay with PC and mouse/kb support is a real pain in the *** for many console players today. I see no advantage there only cheaters. If MS will launch the Project xCloud on PC with total crossplay then it will burn many butts.

 

[NO CARRIER]

It all makes good business sense. The fact is, there is little profit in hardware. It's expensive to produce, to package, to ship, to support, retail channels take a profit. Plus there are costs for returns, repairs, etc. At launch gaming hardware sell at a loss in hopes the losses will be recovered in game and accessories sales. (Increased profit margins on additional controllers, expandable storage, game sales, etc.)

In term of profits, it's not about hardware sales volumes it's about recurring income. The same reason Amazon takes a loss on Echo and Kindle devices, they know it's a gateway into using their service. Chances are if you have an Echo you'll also want to subscribe to prime to use the additional Echo features like music streaming. The more Kindle devices are in the wild, the more people will buy books from their store. It's day-two profit. It's the same reason Google gives Android for free to hardware manufacturers, they'll spend all that upfront money to produce and support the OS to make future income on the Play Store sales and data analytics / advertising.

It's a similar strategy for Microsoft now. Selling the service. Xbox is now just a device to plug a gap in their Game Pass service. Videogames are primarily played on TV, Mobile, and PC. We know Sony and Nintendo won't allow their TV consoles to run Game Pass and provide recurring income to Microsoft, so Microsoft has to deliver their own solution to fill that gap for those who prefer playing on TV. Luckily Android allows Microsoft game pass services, so they can leverage that device. iPhone, not so much.

Netflix makes far more profit from recurring monthly charges from individuals (some people sign up for years) than Samsung would for a one-time-profit on a BluRay player. Netflix gets more users to sign up by making their streaming service available on mobile, TV, PC, etc.

It's not a new strategy, but it looks like Microsoft might be the first to pull it off for gaming. Sony will still exist, Nintendo will still exist, and both will continue to produce brilliant games and experiences as well. Just as movie theatres still exist, and BluRay players still exist - and some would argue both offers a superior experience to Netflix streaming. But a better experience doesn't always mean more profit.

+++ath0
NO CARRIER