In the wake of Redfall’s disastrous launch, Phil Spencer, head of Xbox, went on Kinda Funny’s Xcast to answer brutal questions. While some have criticized Spencer’s response and shown disdain towards his leadership at Xbox, I still believe he has spearheaded some noble pursuits for the game industry.
In a recent earnings call, we found out that Microsoft isn’t happy with its gaming division, as the revenue for the Xbox Series X/S is down by 30 percent. Furthermore, Xbox Game Pass is expected to fall short of its 2023 subscriber target. The company has also acquired several studios, including Bethesda, but we have yet to see any fruit from that. Year after year, we were promised greatness on the horizon, but when a game finally came out, such as Redfall, it failed to deliver the performance we were promised. Amid all of this, Spencer publicly faced the backlash.
Firstly, the fact that he went on a popular show like Kinda Funny when he could have easily backed out, shows a lot about his character. There are few leaders in the game industry who are as transparent as Phil Spencer. Instead of cowering, he decided to face the criticism head-on and with honesty. I’m not here to argue against the fact that Xbox is doing poorly. Spencer himself stated that they are far behind Nintendo and PlayStation, and anything they do wouldn’t put them ahead. However, I do want to analyze what Spencer is trying to do with Xbox. It’s very noble, but sometimes noble isn’t good for business.
Xbox was at its worst during the Xbox One launch. It originally had a stranglehold on digital games, harming the retail market. The console always had to be online, was $100 more than its competitor, and came bundled with the Kinect, a device no one wanted. It resulted in losing a generation of gamers, which Spencer said was detrimental to Xbox’s brand. During this turmoil, Spencer stepped in with a vision to get Xbox back on track.
He did just that by focusing on a consumer-friendly approach, emphasizing a “gaming is for everyone” model. Xbox initiated a strong friendship with PC gamers, breaking down the walls between platforms. Xbox also started a cross-play initiative, pioneering multiplayer gameplay across platforms. Its Cloud service bridged the divide between generations, making it easier for games to transfer from one Xbox console to another. In addition, Xbox Game Pass has been hailed as the most successful subscription service for games. Suddenly, when compared to PlayStation’s exclusivity approach, Xbox became the friendly corner of the industry. They saw past the console wars and became the good guys of the industry. Thanks to this and Spencer’s vision, Xbox emerged from the grave.
Through a noble pursuit and a love for games, Spencer saved Xbox, and he should be applauded. Unfortunately, now we see that being noble and consumer-friendly isn’t the best in the long run. The wholesome vision that saved Microsoft is now bringing it down. The main culprit could be Xbox Game Pass.
Xbox lost the console race, so Spencer is carving a new pathway to success. It’s not necessarily about selling more consoles but getting people into the Xbox ecosystem and promoting Game Pass above everything else. Play an Xbox game via PC Game Pass… cool, you are in the ecosystem. That is the logic. However, fans are dedicated to their system of choice. While Xbox wants to be friends with everyone, consumers are drawn, for some reason, to different sides. Fans criticized Spencer when he said games wouldn’t bring people over to Xbox. I understand the criticism, but he might be right. PlayStation gamers are dedicated to PlayStation, Nintendo to Nintendo. It was Game Pass, after all, that made me buy an Xbox, not its exclusive offerings.
With that said, in a complicated, almost paradoxical way, the dedication to the unique path of Game Pass (instead of games themselves) is dragging Xbox down. Exclusive games may not suddenly bring Xbox to the top, but they will make the current Xbox fanbase happier and potentially increase Xbox Game Pass subscriptions. The problem, though, is that Xbox’s hands-off approach to development and the freedom of Game Pass allows its studios to do whatever they want. They can develop passion projects instead of following the corporate machine and publishing surefire best sellers.
I want to commend Spencer for supporting developer creativity and staying away from the iron grip of leadership. It’s the right thing to do from a moral perspective but not necessarily a business perspective. Because of the hands-off approach to studio projects, they were able to produce great games like Hi-Fi Rush and Pentiment. The latter is a passion project from Obsidian. Now, imagine if Spencer forced Obsidian to make Fallout New Vegas 2 instead. That would put Xbox on the map and fulfill the dreams of many fans. It’s the right thing to do if you want success. However, Xbox heads decided to let their studios experiment and create passion projects that won’t have wide appeal. As I said, this is Spencer being a good guy, and I wish developers could work on their passion projects. Unfortunately, for a company to be successful overall, studios have to make games for the general public. It’s sad but true. Spencer himself confessed that Redfall’s failure resulted from a lack of direction and help from Xbox at large. He said that if Microsoft provided more support to Arkane Austin, then the game might have performed better.
Furthermore, as an outsider looking in, Microsoft’s push for Game Pass might be driving third-party deals away from the company. If Microsoft’s main focus is Xbox Game Pass rather than the games themselves, then some studios might be inclined to go somewhere else, somewhere that will give their game the spotlight it deserves. I appreciate and respect Spencer for moving away from the console wars and carving a new path. He has done so much good in the game industry by ushering in a more inclusive space and giving developers the freedom to make the games they want. He is doing the right thing, but sometimes, unfortunately, the right thing is not what breeds success. I do hope that Spencer’s noble pursuit works out in the end, but right now, it’s more of a detriment than an asset.
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