Game On: What lies ahead for Microsoft and Games?

Layoffs, cancellations, and rumours continue to surround the makers of Xbox

It all started on February 5 when the head of Xbox, Phil Spencer, tweeted about an upcoming event (sometime today) that would discuss the future of Xbox. Just like that, most people in the gaming industry began to contemplate what this would mean for a company assimilating after a multi-billion-dollar acquisition and firing nearly 2,000 people.

Social media platforms were rife with speculation, as many felt that such an event wouldn’t just be a regular announcement of upcoming games, but would rather talk about Microsoft pivoting away from making gaming hardware and manufacturing Xbox consoles.

---

This speculation in turn fueled further discussion throughout the week as gamers and fans wondered what this would mean to loyal customers and the Microsoft gaming fanbase – people who have bought devices such as the Series X/S in this generation and older devices like the Xbox One and the 360. The tech giant, however, has tried reassuring fans and employees that they are committed to making consoles.

At first glance, the idea for an organisation that has just acquired numerous gaming franchises and IPs through their acquisition of studios like Obsidian (2018), Bethesda (2021), and now Activision Blizzard seems contradictory in a market where exclusive franchises drive hardware sales. However, in recent months, Microsoft has made a strong push to release multi-platform content. Additionally, with the continued success of Sony’s consoles, particularly the ever-popular PS5, it seems prudent from an economies of scale perspective to make games like Starfield (one of the games discussed heavily this week) available to owners of the PS5.

However, things aren’t that simple in the case of Microsoft. It has championed its Game Pass subscription service and has always offered its exclusive games on day one for both the Xbox and Windows platforms. At times, the similarity of experience between the console and the PC is so close that many avid gamers have opted to purchase powerful PCs for both work and play, alongside a PS5 to fulfil their gaming needs. Some would argue that this trend has, to some extent, eaten into potential sales of Microsoft’s consoles.

Additionally, the Game Pass subscription service hasn’t transformed Microsoft’s fortunes as adoption and growth numbers for the service have begun to shrink. In such a case, offering the Game Pass as a possibility to the fifty million people who own a PS5 seems like a lucrative opportunity. For the broader gaming community, the Xbox has always remained a cultural symbol of Microsoft’s glory days in gaming, particularly when the Xbox 360 was the preferred device despite the infamous “red light of death.”

If Microsoft chooses to stop making consoles, it would be detrimental to the market and also limit opportunities for innovation in both hardware and game-making practices. Additionally, it would leave Sony as the sole player in the traditional “console wars,” which is not beneficial for anyone. If the decline of football-based simulation is any indicator (With EAFC24 or whatever), monopolies are rarely beneficial to the end customer.