February 17th 2025.
Is Xbox's strategy of releasing games on multiple platforms a successful one? Phil Spencer, the CEO of Microsoft Gaming, recently discussed the challenges of attracting PlayStation and Switch owners to Xbox consoles. With the PlayStation 5 outselling the Xbox Series X/S by more than double, Microsoft has shifted its focus to becoming a multiplatform publisher, no longer tied to its own hardware.
This shift can be seen in Xbox's marketing, which now downplays the console itself, as well as the increasing number of Xbox games being released on other platforms. While this strategy seems to be paying off financially, thanks in large part to the recent acquisition of Activision Blizzard, the question remains: could this eventually lead to Xbox exiting the console race altogether?
In a recent interview, Phil Spencer acknowledged the difficulty in convincing PlayStation owners to switch to Xbox and stated that the company is no longer trying to do so. He explained that while selling games on rival platforms means losing 30% of the sale to the competitor's storefront, the remaining 70% helps Xbox create a strong portfolio of games and generates revenue for the company.
"We want to reach more players and allow them to experience our games, regardless of the platform they choose to play on," Spencer said on the XboxEra podcast. "And yes, the 70% we make on games on other platforms is helpful to us in building great portfolios, as we showcased at Developer Direct, and I believe this will continue to be the case for the rest of the year."
Spencer also addressed concerns about Xbox's future and the fear that its subscription service, Xbox Game Pass, could lead to a decline in game ownership. "I understand and respect the concerns of those who come to me with questions about the future of Xbox and our hardware," he reassured. "But we have always valued our customers' game libraries and have shown that through features like backwards compatibility and play anywhere. We want to continue providing options for players to enjoy our games in the way that they prefer."
One of the biggest moves for Xbox this year is the release of Forza Horizon 5 on the PlayStation 5, a game that was previously exclusive to Xbox consoles. This decision highlights Xbox's shift towards a more multiplatform approach and its focus on reaching a wider audience.
Xbox's declining hardware sales and stagnant Game Pass subscriber numbers have led the company to pin its hopes on Xbox Cloud Gaming to expand its audience. "Embracing Windows and cloud technology has allowed us to grow," Spencer explained. "In fact, our fastest-growing region is now Asia, not because we are selling more consoles there, but because of our cloud and PC offerings. The fastest-growing platform for us is cloud gaming, and it allows us to reach players like the presenter in the UK who we would never have reached with just our console. This is not only beneficial for Xbox, but also for our games, like the upcoming Indiana Jones game."
According to Microsoft CEO Satya Nadella, Xbox Cloud Gaming recently achieved a record with 140 million hours streamed in the last financial quarter. While the company also announced a 30% increase in Game Pass subscribers on PC, the absence of an overall figure for all platforms suggests that there has not been significant growth since the 34 million figure reported in February last year.
It is worth noting that Xbox Cloud Gaming is currently only available to Xbox Game Pass Ultimate subscribers. While the appeal of cloud gaming may be on the rise, it has not yet translated into a significant boost in Game Pass subscribers. As such, it is unclear how much cloud gaming will actually benefit Xbox in the long run.
The question remains: does any of this matter now that Microsoft has become one of the largest game publishers in the world, thanks to its recent acquisitions? With the amount of revenue being generated from publishing, the company may no longer see its future consoles as the main focus, but rather as a secondary part of its business as a third-party publisher.
So, what does this all mean for the future of Xbox and its consoles? We would love to hear your thoughts! Please feel free to email us, leave a comment below, follow us on Twitter, and sign up for our newsletter.
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