The "console wars" are over.
At least in the way they've usually been fought.
As we approach a brand new generation of consoles, with Sony passing the baton from the PS4 to the PS5, and Microsoft succeeding the Xbox One with the Xbox Series X and Series S, Microsoft executive vice-president of Gaming Phil Spencer insists that the paradigm to look at this console generation is by how many people are playing video games, not a head-to-head comparison of console sales. The Series X/S are but a piece of the Microsoft offering, with a complete gaming approach across multiple devices, spearheaded by Microsoft Game Pass.
"I think our our pivot is really to build the best experience for players on the devices that they want to play on," Spencer told ESPN in an interview. "... I mean, so many of the things that we're doing now are available on different platforms. So for us in the gaming space, it's an approach to allow gamers to play the games that they want to play on the devices that they want to play on, and we think that's the best approach to growing Xbox."
Ths "family approach" strategy, which has been kicked into overdrive by Game Pass, has been a few years in the making. Spencer said that the Xbox leadership team has been planting the seeds since 2014 and has a focus to make games more accessible as a whole, not just to those that are willing and able to dish out $499 for the Series X or $299 for the Series S.
"If we're really going to be in the gaming space, shouldn't we be about all gamers?" Spencer said. "There are three billion people who play video games on the planet today, and there are about 200 million households that will buy a console. Console is an important consideration, but there are also a ton of people who play on PC. A ton of people play on the devices that they already own. I was really trying to expand our strategy to reach gamers on the devices that they want to play on, but also when we build a console to build absolutely the best console anyone could buy, and I think that's what the team is done."
That might be easy to say, of course, given that Sony has outsold Microsoft in each generation, if you're strictly looking at console sales numbers. Spencer reiterates however that although console is definitely a piece of the pie, he doesn't consider it a major measure of success for the company.
"We really think about the number of players that are playing on Xbox," Spencer said. "How many people are on the platform on the service playing games I know specially this holiday with PlayStation launching and Xbox launching. I think some of the traditional measures will still try to be used by certain people of 'how many Xbox are sold, how many PlayStations are sold.' Inside of our team, we goal ourselves on how many players play on Xbox. That is our goal. We say on Xbox, it could be a PC player that's a Game Pass subscriber who's playing our games on their platform. It could be somebody on the (Nintendo) Switch who's playing one of our first party games. Could be somebody who is on Android using xCloud to to play first party games there. It's really how do we reach as many players as possible and that is the top level goal that we have as an org."
Despite this approach, Spencer does not believe that the end of consoles is near, nor is the console business declining.
"Consoles [are] already a small part of the overall gaming business," Spencer admits. "I love playing on my television. I sit on my couch, controller in my hand. That's the way I like to play games. I'm not always there. Sometimes I'm at work and I'm on a PC. Sometimes I'm on the bus or whatever and I want to be able to play on the device that we have. The number one things that people do on their phones as they play video games. Much like video, much like music, you see 'media that's available to me wherever I am' is the thing that becomes the most popular. If you look even at video games, the most popular video games in the world, the Fortnites, the PUBGs, the Minecrafts ... these are games that are available across multiple devices."
Spencer believes that Microsoft Game Pass, and more broadly the "Netflix for video games" idea is just one example of many business models that can concurrently work in the video game space.
"One of the healthy things in the game industry is that we can support multiple business models, and those business models can work. So we've got retail where people are buying their video games. You've got free to play where you don't buy anything. You can play a game and, if you choose, you can transact when you play the games. Subscription is just another part of the business models in video games. It happens to be an area where nobody had really moved with the kind of level of investment and motivation that we had. So we feel good about being one of the first and the biggest gaming content subscriptions that's out there."
Spencer mentions EA Play, Ubisoft and Apple Arcade as other examples of video games subscription services, and also points to video and music as another realm where subscription has been successful, but reiterates that the video game subscription business is not necessarily one where every gamer will become a subscriber..
Speaking of concurrency, the idea of "games for all", which includes cross play across all competing systems, runs counter to another major strategy utilized by Microsoft, Sony and Nintendo: exclusives. Microsoft's impending purchase of ZeniMax Media (the parent company of Bethesda) for $7.5 billion puts one of the largest games publishers out there, with beloved titles such as Fallout, Elder Scrolls and DOOM, right into the Microsoft family. Many presume this would mean that after all existing contractual obligations are honored (like Deathloop, which has a timed console exclusivity deal with the PS5), Bethesda's future titles will be Microsoft exclusive.
In response, Spencer says not quite; it will be on a case-by-case basis.
"When we think about where our content should go, we think about the goal of how do we grow our platform and our services. That's what we are. We're not a third party-publisher. If we were, we would ship our games on every platform. We are trying to build a gaming platform in Xbox that can reach the largest number of gamers across any device. There are certain instances where putting our games on another device like an Android phone, we think that works because we are reaching new customers that would have never bought a console, maybe they don't own a gaming PC. It's a great way for us to introduce games to more people. But there are other systems where we feel like we already know those customers and we don't need to port every game to every other closed ecosystem in order to reach our goal.
"So the reason I say it's on a case-by-case basis is because in general what we're trying to do is grow the platform, and we can help grow Xbox by putting games on other platforms. But the world where we look at every one game and say, 'OK, should this game be on PlayStation? Should this game be on Switch?' We just think is kind of random to our players and doesn't really grow Xbox, so it's got to be more of a concerted effort with the content that we have."
To that point, Spencer says that though exclusivity is "really a marketing vehicle for platforms," the biggest games will always be available on as many devices as possible. Spencer also revealed that future acquisitions of studios have the growth of Game Pass in mind.
Another way Microsoft aims to expand the market is with the next generation's digital console offering. Playstation also has a digital exclusive PS5, but the Microsoft version (Series S) is priced $100 lower. Spencer says that this is in an effort to entice lapsed gamers back to the Microsoft family.
"Maybe they played on 360. They skipped the last generation 'cause of family or whatever, and now they're thinking about coming back in and maybe they're not sure that $500 is what they want to spend to come in. But we offer a $299 console that runs the games that maybe they know as well as the new games that are being built. We think the price point is important."
So, while the narrative of Sony vs. Microsoft, head to head, battling it out for console supremacy like a heavyweight title fight will always be prevalent, its layers go much deeper. And it certainly is not as "BFFs forever" as when Spencer joined his (then) executive lead counterparts, Sony's Shawn Layden and Nintendo's Reggie Fils-Aime, on stage for a message of video game solidarity at the 2018 Game Awards, but at the root of competition lies a long-planned desire, certainly from Microsoft, to make video games as accessible and playable as possible around the world.
The Xbox Series X and S are scheduled to launch on Nov. 10.