Phil Spencer Says Xbox Won’t Abandon Physical Discs

Phil Spencer, the CEO of Microsoft Gaming said this week that Microsoft isn’t planning to abandon Xbox physical discs. In an interview with Stephen Totilo at Game File, the Xbox exec was asked about the all-digital Xbox Series X refresh that leaked last year, and while Spencer didn’t comment on the company’s hardware plans, he said that Microsoft will “follow what the customers are doing.”

“We are supportive of physical media, but we don’t have a need to drive that disproportionate to customer demand,” Spencer said. “We ship games physically and digitally, and we’re really just following what the customers are doing. And I think our job in running Xbox is to deliver on the things that a majority of the customers want. And right now, a majority of our customers are buying games digitally.”

Spencer did emphasize that gaming consoles were about to become the last mainstream electronic device with a disc drive. He added that “this is a real issue, just in terms of the number of manufacturers that are actually building drives and the cost associated with those.” However, Spencer made it clear that Microsoft’s Xbox strategy “does not hinge on people moving all-digital.”

The exec also addressed recent reports suggesting that Microsoft had laid off teams in charge of physical retail for Xbox games. Spencer explained that the layoffs were a result of an “alignment of our teams across ZeniMax, Activision and Xbox. So we have teams that are in charge of physical retail, inclusive of selling games in physical outlets. So that’s what the team action was. It wasn’t about us getting rid of the capability.”

Spencer’s interview comes after the Xbox executive team detailed their new cross-platform strategy and started teasing new Xbox hardware. It was announced yesterday that Sea of Thieves, Grounded, Pentiment, and Hi-Fi Rush were the four Xbox exclusive games that Microsoft will release on other consoles this spring. The Xbox team said last week that it would use this experiment to learn about how to grow the Xbox business using the millions of players on other console platforms.

Sarah Bond, the new President of Xbox overseeing hardware development also said that Microsoft will announce new Xbox hardware this holiday season. The Xbox President also confirmed that the company is already working on its next-gen Xbox roadmap, with the goal to deliver “the largest technical leap we’ve ever seen in a hardware generation.”