Phil Spencer, Xbox chief, is not ready to predict a Netflix-ified future of video games. The head of Microsoft’s Gaming Division, Phil Spencer, stated that the market for video games is “continuing to grow and be very strong” in an interview with the New York Times.
He said, “So let us make sure that we offer our customers the choice between transactions and subscriptions,”
Spencer acknowledged that Microsoft’s cloud streaming efforts are akin to Netflix. However, he quickly pointed out that purchasing games individually is an “old part of gaming” and will not be discontinued. Considering the rapid growth in Game Pass’s popularity, it would not make sense.
Spencer stated that a subscription is more important than a transaction. Subscription is growing faster because it’s still relatively new. Game Pass was one of the pioneers in this space. The transaction business is huge. “We still sell physical discs.”
I have had a few issues with Xbox Game Pass and its sibling PC Game Pass. It makes sense to suggest that everyone takes advantage of the $1 introductory deal and spends a month playing single-player and co-op games. A Game Pass subscription, even at $10 per month, is an excellent value if you can play many games. The PC version has over 400. However, it feels a little like I am writing a confession for a future self as he struggles with understanding how we could have been so stupid as to allow subscribing game libraries to replace purchasing video games.
Although cloud streaming doesn’t seem likely to replace downloading games anytime soon, Google’s Stadia revolutionized gaming as much as the Segway revolutionized walking. However, many powerful companies believe it’s still the future. Microsoft included.
Spencer stated, “I believe cloud is crucial.” “And Netflix clearly has the cloud. Amazon also has cloud. Google has real cloud capabilities.”
Spencer believes Microsoft is the best in this regard, as it has cloud streaming tech and knows how to make games.
He continued, “But without content and community, cloud, I don’t think gaming is worth it right now.” I think they are smart. They are buying studios. They are learning more about interactive entertainment and the creative process. It’s a smart way the move into space. This was our first venture many, many years back.
Fair point! New World was Amazon’s first major success, but it took many years to achieve. Microsoft released many popular games last year, including Halo Infinite and Forza Horizon 5. Age of Empires 4 and Psychonauts 2. I also can’t forget Deathloop. Bethesda Arkane and Bethesda are now Microsoft companies. It still feels strange.
While I agree with Spencer that Microsoft is well-positioned for cloud gaming and subscriptions, it’s refreshing to hear Spencer state that the old ways of doing things are still being followed. But I don’t believe him. Is it possible for ye olde gaming purchasing to survive the next 20 years when we are already calling it “traditional”? I’m not sure.
Spencer talks about many other topics in the NYT interview. He discusses Activision Blizzard, the sexism allegations against it (“Xbox’s past is not perfect”), and ideas about “metaverse.” Listen to or read the entire interview.