What is an Xbox? It's a pretty simple question, right? I would define it as a custom piece of gaming technology, usually box-shaped, usually located in the living room or bedroom. Competitively priced, it is a consumer-oriented product that offers an excellent balance between price and performance and is as close to plug and play gaming as you will find. Is it a console or not? Microsoft disagrees with its latest notable messages. A cloud client running on a smart TV, Amazon Fire Stick, or Meta Quest VR headset is now an Xbox. A desktop PC is an Xbox. A laptop or handheld PC is also an Xbox. It's all part of Microsoft's transition plan to evolve Xbox from a console/PC ecosystem to an “everywhere” platform that's as device-agnostic as possible, but will it work?
Looking at the market from a meta perspective, it is got to work. Xbox needs to reach beyond the existing group of console gamers. The basic economics are simple. Market data suggests that the total number of console users does not change from one generation to the next. Not only that, some data suggests that it is the same people buying those consoles from one generation to the next. Meanwhile, the cost of creating games is becoming more expensive. The only sustainable route forward is to reach beyond the 200 to 250 million console players and find a broader audience. Microsoft began that work years ago to end gaming exclusivity by releasing key titles day and date on PC, but the strategy now appears to be a case of releasing those games on any piece of hardware capable of running them.
By virtue of its various acquisitions, Microsoft/Xbox has effectively become a multi-platform publisher that cannot and should not ignore rival console systems such as Nintendo Switch, the successor to the Switch, and PlayStation 5. When Activision's Blizzard King acquisition was announced so long ago, we were still in the middle of the console wars and the expectation might have been for Call of Duty to be an Xbox exclusive, but the finances wouldn't have worked out, the regulatory pressure on the acquisition was too overwhelming, and ultimately , Microsoft would probably have money lost by freezing the PlayStation audience. I can only assume that the calculation was made that PlayStation users wouldn't abandon their libraries and 'defect' to Xbox, and why should they?
- 0:00:39 Introduction
- 0:02:56 News 1: Phil Spencer: no “red lines” on Xbox ports
- 0:27:21 News 2: Lego Horizon Adventures impresses on consoles
- 0:36:40 News 3: Halo 2 E3 demo resurfaces in Master Chief Collection
- 0:51:30 News 4: PS5 Pro sales reportedly not affected by price
- 1:01:35 News 5: Stellar Blade developer considering PC release
- 1:08:35 News 6: Intel plans to fix Arrow Lake performance
- 1:17:47 News 7: ModRetro Chromatic impresses
- 1:28:37 Supporter Q1: How will the next Xbox achieve the “biggest technical leap” in a console generation?
- 1:35:46 Supporter Q2: If the next Xbox doesn't have a disc drive, how will disc backward compatibility work?
- 1:42:15 Supporter Q3: Are you excited to see the rumored Nvidia ARM-based laptop chip?
- 1:48:22 Supporter Q4: Will we see support for ultra-wide aspect ratios on consoles?
- 1:56:56 Supporter Q5: Can we give Epic credit for allowing the Internet Archive to host old Unreal games?
Meanwhile, for several reasons, Xbox hardware sales have slowed significantly: a combination of former Xbox One users in 'games forever' who see no reason to upgrade, along with a continued lack of delivery of top-tier titles. level that can make users jump. to the Xbox brand. By achieving further division of the existing static market, it has failed. Therefore, a new strategy was required.
Part of that strategy is based on the concept that Xbox can no longer be just a console and a PC app, so we're faced with the “this is an Xbox” campaign. For Xbox fans, this seems like a marginalization of the console as the platform's home. To others who know exactly what an Xbox is and what it has been since 2001, it may seem desperate or even ridiculous. Part of the problem is that Microsoft is effectively marketing against 23 years of its own messaging, and that's a difficult place to start. The thing is, marketing isn't really targeted at the core audience. Microsoft has broader horizons.
The truth is that the nature of the market is changing. The console audience may not be growing, but people are still enjoying games in record numbers. PCs are still very popular and gaming laptops in particular are changing major numbers. The laptop version of the RTX 3060 ranks 11th in the Steam Hardware Survey's graphics subsection, while surprisingly, the RTX 4060 laptop model comes in at number two, ahead of its desktop equivalent (for To be fair, it was released earlier, but even then, it's a remarkable situation). Meanwhile, there's a lot of excitement around laptop PCs, where Microsoft is clearly seeing some kind of opportunity. Steam Deck has revealed latent potential here and some might say that Xbox has to move in this direction before Valve expands, dominating all areas of the PC market, including the console space. An Xbox handheld is coming, but in the meantime, I'd expect Windows improvements to make existing handhelds more Xbox-like.
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“This is an Xbox” seems to be aimed at a broader and possibly younger audience, who don't seem particularly interested in the console concept, but this strategy carries risks. The danger is that everything Microsoft has achieved with Xbox as a console will be left aside, which is the main concern of prominent Xbox influencers, who fear a dilution of the brand and the community. The console is the center of attention, and without it, Xbox becomes something very different: a publisher, not a platform owner. At worst, Xbox becomes a client or launcher, not unlike EA or Ubisoft, only operating on a much larger scale.
This may be somewhat alarmist since Microsoft is committed to new hardware. In an interview with Agency last week, Phil Spencer talked about a new handheld in development that is likely years away from release. Sarah Bond has talked about a Gen 10 console that will offer “the biggest technical leap you've ever seen in a hardware generation.” And at the same time, there are also strong signs of being able to run other stores on Xbox hardware, foreshadowing some kind of merger between PC and console functionality. Expect machine learning to do a lot of work to validate Sarah Bond's claims, especially as Spencer rules out $1000 consoles. I think Microsoft needs showcase hardware, but the importance of the PC in the future can't be underestimated – we've been saying for some time now that Xbox and Windows should merge, effectively making every PC in every category an 'Xbox' of some description.
And from there, the overall importance of the console begins to diminish. While there is still a plug and play box, the market itself can take over with its own PC-based Xbox hardware and mainstream users can literally build their own Xbox hardware. At the same time, Microsoft will continue to redouble its commitment to cloud gaming, where Phil Spencer says there is already significant growth.
Meanwhile, his comments about there being “no red lines” where games go to other consoles should be taken seriously and literally. The best protection against the console's uncertain future is to simply saturate all areas of the market with great games and reap the benefits – a much safer bet than building a business model around a box that loses money with each sale. If a piece of hardware can run Call of Duty or, dare I say, Halo or Gears, Microsoft and Xbox can only benefit by releasing those games there. All I would say on this front is that unequivocal Game Pass launches for those titles should be a given and if the pace of cross-platform rollout continues as it has, I honestly think we need to see new Xbox hardware as soon as possible. that later. For at least another generation, the plug and play console will have an important role to play.
But this is a period of transition and the pace of change has been quite surprising. As John says in this week's Direct, if we go back just 12 months to November 2023, the idea of Microsoft adopting PlayStation development had no real credibility whatsoever. And yet, just a couple of months later, Phil Spencer, Sarah Bond and Matt Booty officially began this transition in the Xbox business. Four games were discussed for the PlayStation launch, as an experiment, which always seemed like a tight message rather than a reveal of the full strategy.
We're now at the point where key Microsoft Studios titles like Diablo 4 and Call of Duty Black Ops 6 are not only on PlayStation 5, but enhanced for PS5 Pro. Indiana Jones on PlayStation? Yes, there is a relatively short delay, but I hope it is another key point in the transition to full, day and date, cross-platform support. If every screen is going to be an Xbox, that should also include those connected to PlayStation consoles, or the overall marketing push doesn't quite make sense.
That's my vision for Microsoft's journey this year: moving away from the concept of consoles and exclusive games, to focus on growing revenue, growing the size of the business and, as Phil Spencer says, taking the Xbox experience on PC from “good” to “great”, a hugely important investment for the future. On this last point, I think there is a lot of work to do. Whatever Microsoft is planning with Xbox and Windows, the minimum would be an updated app. We should consider migrating the entire optimized Xbox interface to Windows, taking care of driver and system software updates for the user and comprehensively addressing the PC platform's flaws, perhaps with a revamped DirectX.
It sounds challenging but it can be done. Surprisingly, despite not running games natively, Linux is becoming a real challenger to Windows when it comes to gaming: SteamOS and its subsidiary Bazzite retain PC-like features, but provide a PC-like experience. console that works, even managing to mitigate stuttering in shader compilation in a way that DirectX has yet to match. The Steam Deck serves as a platform and shows that Linux could power an alternative to Xbox in the console space, while also posing challenges to Windows on desktop PCs.