Microsoft Appears to Confirm My Video Game Theory (Premium)

In an article about video game console generations, Phil Spencer supported my theory that Microsoft will eventually stop making its own hardware.

Don't misunderstand this statement: I don't believe that Microsoft is exiting the video game market. Instead, I've stated in the past that its hardware failures combined with a growing prowess in cloud services lead to a natural conclusion: A coming Xbox generation will be services-based and hardware-agnostic, and Microsoft will stop making Xbox consoles over time.

The article in question, Ubisoft Believes Next Gen Is the Last for Consoles as Microsoft Looks Beyond Platforms, is worth reading. It's based on the opinion of a third-party game developer which believes that the coming generation of video game consoles will be the last.

Nintendo and Sony, which have successful and profitable video game consoles, both disagreed with that assessment. But Microsoft, which does not, hinted very strongly---multiple times---that this assertion is correct.

Notably, I've been saying this for some time, that Microsoft's strength in cloud computing uniquely positions it for a future in which games are streamed to any device, rendering hardware consoles obsolete. And that, oddly enough, Microsoft's lack of success in hardware could hasten this evolution.

"Only Microsoft has the cloud infrastructure to deliver games to customers going forward," I wrote back in January. "The market [will] shift away from dedicated and incompatible consoles."

Since writing that, I heard from a trusted source at Microsoft that the software giant would ship a new-generation console after the Xbox One X, which surprised me: I had figured that this might be the end of the line. And Brad later confirmed this. But that dovetails nicely into the article cited above, which claims that the coming generation of video game consoles will be the last.

To drive home this point, let's look at how Microsoft's Phil Spencer describes Microsoft's stance on this topic. In his own words.

"I care less that people play Minecraft on an Xbox One, but that people can play Minecraft no matter what console or device they have in front of them," he told Variety.

"[Microsoft CEO] Satya Nadella challenged us to make Microsoft the global leader in gaming by empowering everyone on the planet to play, watch, communicate, and create together," he said, continuing the theme. "We're updating Minecraft to play across as many devices as we can, toward a goal of having every Minecraft player in the world able to watch, communicate and play together. We’re focused on this mission for the future of gaming at Microsoft."

"I look at investing into three key areas: content, cloud, and community – that is, making great games, making the experience of accessing and playing them better and improving things for the players overall. It helps lead gaming for everyone – not just Microsoft – into a better place for everyone."

And then getting...