Why are we surprised that Xbox might have a multiplatform subscription?
“We’re listening and we hear you,” Phil Spencer, head of Xbox wrote on X (formerly Twitter) on Monday, without being specific about what he had heard. “We have a company update event planned for next week, where we look forward to sharing more details with you about our vision for the future of Xbox. Stay tuned.”
There are a few things Spencer could have talked about. These are turbulent times for Microsoft’s gaming arm, which in recent months completed its $68.7 billion acquisition of Activision Blizzard, the biggest deal ever in the gaming industry, and subsequently announced 1,900 layoffs.
However, Spencer certainly wanted to address the growing unrest among Xbox fans after a series of leaks revealed that console-exclusive Xbox games made by Microsoft studios would be heading to rival platforms.
What is happening?
The news cycle started in early January with a rumor that Microsoft would release a “critically acclaimed” first-party game on a rival system. The consensus emerged quickly on HiFi rush, the vibrant rhythm action game from Tango Gameworks, is coming to Nintendo Switch. Swift followed this closely reports that Microsoft had considered releasing Rare’s pirate sim Sea of thieves on PlayStation and maybe Switch.
The Xbox community was in an uproar over these messages, but this was just the beginning. On February 1, files on cosmetics were datamined from a HiFi rush update seemed to confirm that the game would indeed come to both Switch and PlayStation. The following weekend saw a flurry of reports about many high-profile Xbox games going multiplatform. StarfieldBethesda’s space epic and last year’s big Xbox game It’s said to be coming to PlayStation 5. Indiana Jones and the Great Circleprobably this big Xbox title of the year, may also come to PS5 after a relatively short period of exclusivity for Xbox. So, unthinkable, maybe Weapons of war, a series more closely tied to the Xbox brand than any other Halo bar. (There are unsubstantiated rumors that the latter is also coming to PlayStation.)
Xbox fans were angry, to say the least. Various Xbox influencers publicly showing their support and posting photos of themselves buying PS5s or singing hymns (although it wasn’t always clear how serious they were). It became necessary for Microsoft to respond, hence next week’s announcement, which has reportedly been pushed back from an original later date.
What will Microsoft announce next week?
There is no smoke without fire – certainly not this there’s a lot of smoke – so Spencer is expected to talk about Xbox’s broader platform strategy regarding first-party games. But it’s still worth setting expectations for this “company update.” Based on current reporting, HiFi rush is the only one of these titles that may have been committed to a multi-platform release. All others were reported to be “under consideration,” with Microsoft “weighing” its options. It’s entirely possible that decision-making on larger franchises is still ongoing.
It’s also worth noting that Microsoft’s gaming division is already a multiplatform publisher, even before you consider Activision Blizzard’s new owner. It publishes Minecraft on every conceivable platform, including Switch and PlayStation. It has experimented with bringing Xbox games to the Switch before Ori and the Blind Forest, and it has been releasing every Xbox title on PC for years, both on Steam and on its own PC platform. So while Spencer may have to announce a major change in strategy, it won’t be the shock it initially seems.
However, don’t expect Microsoft to say it will stop making consoles. While that may be on the cards in the distant future as Microsoft envisions a shift to cloud gaming, Xbox will remain in the console business for at least the rest of this hardware generation.
Why is Xbox going multiplatform?
If Xbox is about to significantly expand its publishing on competing console platforms, several factors could be behind this decision. First, Xbox is estimated to be in a distant third place in console sales, without realistic expectation it can close the gap of this generation. The Xbox Series hardware may be Microsoft’s best yet, but Microsoft has proven itself to be no match for Sony’s marketing and branding power, or Nintendo’s unique hardware and games, and the lead it gained during the Xbox 360 generation had built up in terms of networking features has been completely eroded. Including Activision Blizzard, the Bethesda studio family, and other acquisitions such as Ninja Theory and Obsidian, Microsoft now owns a vast array of game franchises and developers that could benefit greatly from access to Sony and Nintendo’s tens of millions of customers.
The second reason is that the acquisition of Activision Blizzard certainly changed the calculus within Microsoft. If it wasn’t a third-party publisher before (and as we’ve seen, it was), it certainly is now – with legally binding contracts to keep Call of Duty and other series on competing platforms, thanks to regulatory oversight . . In fact, those contracts were hardly necessary because (as some regulators eventually admitted) it made financial sense for Microsoft to keep Call of Duty, Diablo and the like available to as many players as possible. Supposedly, if you’ve stared at that math long enough, you might start to wonder why you don’t apply it to every game you own.
But the third and most important reason for Xbox’s shift to multiplatform is that the company has clearly been moving in this direction for years – something Microsoft executives have been quite explicit about. Spencer, his boss (and Microsoft CEO) Satya Nadella, and other Xbox executives have repeatedly commented on a desire to expand where Xbox games and services are available, including for Nintendo and PlayStation. “Our mission is to bring our first-party experiences (and) our subscription services to every screen where games can be played,” Xbox CFO Tim Stuart said in November. This goal was a key motivation for the purchase of Activision Blizzard, with its strong mobile gaming division King.
Spencer has often talked about consoles as just one way to enter the Xbox ecosystem. Microsoft’s ultimate goal is to open Xbox stores everywhere — on mobile phones and smart TVs, for example — and sell Game Pass subscriptions. It wants playing games through Game Pass to be as ubiquitous and accessible as watching movies and TV on Netflix. (It’s telling that Microsoft publishes Game Pass subscription numbers, but not console sales numbers.)
But for this to happen, cloud gaming will be needed to take off, and adoption of that technology has been slow so far. This could be why the company is now willing to consider multi-platform releases so it can make more money in the near term while bridging the gap to what Microsoft envisions as the post-console, post-hardware future of gaming. There is certainly a trend towards services and cloud gaming in the gaming industry in general, and not just at Xbox – a trend that Microsoft is keen to stay at the forefront of.
Microsoft has always been a software company, not a hardware company Financial data for the second quarter of 2024 are currently showing great success and investment in the cloud in general, but also in AI and related technologies. With the exception of some very nice mice Past, and its modestly successful Surface line of tablets and PCs, most hardware initiatives have failed. Xbox’s 22-year existence is an anomaly in the company’s history, so it makes sense that Microsoft will eventually think beyond the limits of console hardware.
What’s the problem?
It comes down to culture, and specifically the culture of console gaming that has developed over the past forty years. It has traditionally been a retail-driven market where manufacturers have built strong relationships with players through compelling, exclusive games – a model perfected by Nintendo, which remains unrivaled in this regard. At times, as rival manufacturers battled for supremacy, those relationships became almost parasocial, with fans fervently taking sides in a “console war.”
To get in on this game, Microsoft had to play it, and it did quite well at first – especially with the ill-fated acquisition of Bungie and Halo: Combat Evolved. But investment in and management of its own development has been inconsistent over the years. The splashy acquisition of Rare struggled to bear fruit, Bungie left and Xbox shuttered a poorly managed Lionhead. Former chief Don Mattrick also partially withdrew from first-party development, leading to some major gaps in the exclusive games pipeline. When current Xbox leadership began rebuilding its development muscle with an acquisition spree that began in 2018, the expectations of fans—trained in by console culture and by Microsoft’s participation in that culture—were that this would bring a flood of players mean. cool exclusives, leading to increased Xbox console sales and supremacy in the console wars. This isn’t Microsoft’s strategy, and that’s sure to cause some cognitive dissonance when Xbox fans finally get the hint.
Even gamers who aren’t that personally invested in the console brand may find the move unsettling. More ways to play great games from Bethesda and others, regardless of your choice of hardware, seems like a good thing in the here and now. But this move implies that Microsoft’s ultimate vision is a post-console world. However, consoles are deeply ingrained in gaming culture as perhaps the most accessible, affordable, and reliable way to play games – so that vision isn’t something every player is ready for.