Phil Spencer Says Hardware Remains “Critical” to Xbox

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Microsoft CEO Phil Spencer is once again talking about the future of Xbox after the recent Xbox Developer_Direct livestream gave the company a lot of positive buzz. In two separate interviews, Spencer confirmed that Microsoft would keep investing in Xbox hardware even though the company seems to be fully giving up on Xbox-exclusive games.

With Xbox hardware sales continuing to decline, Microsoft is trying to redefine what is an Xbox with a new marketing campaign promoting the Xbox app on PC and Xbox Cloud Gaming on phones, smart TVs, and other devices. Last year, Microsoft also started porting some of its games to PlayStation and Nintendo consoles, and Indiana Jones and the Great Circle is next in line with a PS5 release coming later this Spring.

In an interview with Destin Legarie, Spencer suggested that Starfield, probably the biggest Xbox-exclusive game released since the beginning of this console generation may eventually come to other consoles. “Our strategy is to allow our games to be available… Game Pass is an important part of playing the games on our platform. But to keep games off of other platforms, we don’t think that’s the path. That’s not the path for us, it doesn’t work for us,” Spencer said.

While a game like Starfield certainly brought Xbox back to the spotlight in the fall of 2023, it wasn’t exactly a system seller, and neither were recent Xbox-exclusive games like Forza Motorsport and Hellblade 2. Microsoft just doesn’t have the kind of IPs like Mario or Zelda that are guaranteed to drive console sales. However, the company does own massively popular franchises like Minecraft and Call of Duty that are available on multiple platforms, and this already makes Microsoft one of the biggest third-party publishers in the industry.

So, if Microsoft doesn’t see the interest in Xbox-exclusive games anymore, why would the company keep investing in Xbox hardware? In an interview with Gamertag Radio, Spencer said that he still believes in Microsoft’s ability to build “innovative hardware” that gamers will like.

“Our own hardware? I think it’s fundamental to what Xbox is,” Spencer said. “It’s not lost on me that, ‘Box’ is in the name of our brand. I’ll say, in the position I’m in, I look at hardware as a critical part of what we do.” In the same interview, Spencer also said “We want our hardware to win based on the capabilities that we have.”

Well, Microsoft probably deserves credit for bringing unique innovations to Xbox Series X|S consoles, and I could cite Xbox Play Anywhere, Quick Resume, Auto HDR, and Dolby Vision for games as some of the main highlights. However, it ultimately didn’t matter for gamers, and neither did the power difference between the Xbox Series X and the base PS5 (same for the Xbox One X vs. the PS4 Pro).

Nintendo sold 146 million Switch consoles despite having the least powerful hardware on the market, and it did so thanks to a cool handheld form factor and excellent exclusive games. You could also argue that PlayStation also has great exclusive games that may drive console sales, but the company also capitalized on the PlayStation 4 outselling the Xbox One by a 2:1 margin during the previous console generation.

Unfortunately for Microsoft, the company never really recovered from the terrible Xbox One launch with a console that was $100 more expensive than the PS4. And Microsoft’s attempt to undercut Sony with the $300 Xbox Series S during this console generation wasn’t successful either.

If Spencer also confirmed that new Xbox hardware was in the pipeline, it’s going to take more than hardware innovation to make gamers interested in purchasing Xbox consoles. One of the rumors floating around suggests that Microsoft could allow third-party stores like Steam and the Epic Games Store on next-gen Xbox consoles. However, Valve is also reportedly working on new SteamOS-powered “Steam boxes” for the living room that could well disrupt the console market as we know it.

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