Xbox Is More Focused On Player Engagement Than Console Sales, Says Phil Spencer

I wouldn't be surprised if Microsoft plans to break even this console cycle, planting seeds for the future. GamePass, cloud, Bethesda, these are long game plays with some short term benefits.

@CrazyJF
I'd assume they are still in the phase on investing to boost subscriber counts, but who knows for sure?

Last time we heard they had 23 million subscribers as of April 2021.
If we assume all of them are paying full price (they won't be, but that will be the long term goal), that would be almost £253 million a month in revenue.
Over £3 billion a year.

Xbox is playing chess while playstation is still playing checkers..

@CrazyJF I'd assume it's driving engagement as I'm one who recently jumped ship following E3 due to the strength of the Gamepass showing. Several of my family members have also done the same. Why pay £70 a game when you pay less than half of two games for a year of awesomeness with Gamepass.

@blinx01 and also I think there is data out there somewhere that GamePass subscribers are way more likely to buy DLC for games they play as part of GamePass, and many even by the games they like outright (since they get a discount and the game won’t be there forever.)

GamePass profitability is not just the direct 3 billion a year, but also all the sales it helps boost.

Think I've been saying this for a year or more at this point.

We'll get brand new hardware each few years that is totally optional, meanwhile, the xbox platform and services will exist on a wide range of hardware. Players will pick and choose which hardware they want to use to access the games, meanwhile xbox will always be the platform they access. Driving subs and sales towards MS.

By the time Sony releases the PS6, Xbox will be in "third" place again for console sales, but first place for content delivery.

Barely played my Series X (besides Forza and a bit of COD). My PS5 gets used far more, and has more genuine reasons to play. Know things will even up in the next 12-18 months, but would be nice to get some good next-gen ‘engagement’.

@CrazyJF as a consumer, myself, I couldn't care less. So long as fun and exciting games come out, who cares what the financials are behind the scenes. Unless you're a programmer/game development studio, but then I presume you would have some of this information already.

Gamepass is the reason I bought a series S, too good of an offer to miss, but I wouldn't say it's enough for people to jump ship from playstation to xbox entirely though.

Xbox will always be in third place in terms of hardware and software sales and even in terms of quality exclusives and always have been.

But in terms of value, features, backwards compatibility, gamepass and cloud gaming xbox is ahead

Also I believe the failure of the xbox one drove Microsoft down this route. Whilst Sony is still selling millions of consoles they won't even bother to go the subscription route properly, hopefully sonys sales fall massively compared to the ps4 so they get a wake up call and up their game

@Jayphex I don't see many good games on it yet. I bought lots on my PS4 and I never really got into any. I see that some games aren't giving next gen updates on PS5 if you got the game from PS Plus but you can via Gamepass. The PS5 party option isn't meant to be good as well as I have seen a lot of people complaining. Plus they charge more for games on PS5 and a lot of new games coming will be on Gamepass.

Microsoft will continue to do as they wish and measure what metric they want to.
As long as the great games start rolling in on game pass and we get full third party support then that’s great. This fall is hopefully the start of the roll of AAA in house studio games.
But I will always say, sell more consoles then you sell more game pass and all the other items that come with selling a console.
And if Microsoft sold 100 million series consoles they would tell us about it for sure as it would be a massive achievement for them.
Let’s not forget if your base consoles sell very very bad, third party support can diminish and sponsor and association tie ins do as well.
So console sales numbers are a bit more important than Microsoft let on to be.

In terms of profitability, I often say it, but people tend to judge profits on enthusiasts that buy a dozen plus games a year and assume Game Pass is losing money hand over fist. But people forget that's not who's buying most of the consoles out there. The average remains about 2 games purchased a year by most players. That's $140 at Sony prices per year. Not much. That's $120 ($180 Ultimate) per year for Microsoft with Game Pass. So about the same averaged out. But much more stable income, without the need for blockbuster success with every game, and most importantly, no used game sales that accounts for a lot of non-revenue purchases for Sony. Xbox finally landed on Matrick's goal of eliminating losses from used games, by offering to sell us more for less, instead of by forcing us into re-buying used games.

@UltimateOtaku91 I've been hoping for the same since launch. Hasn't happened yet, people are still happily hoarding the PS5s....but they'll never get better if that doesn't happen.

@Dezzy70 "So console sales numbers are a bit more important than Microsoft let on to be."

Not necessarily. It really depends how they're pitching themselves to devs. If Xbox is the platform, then console sales indicate potential revenues. If Game Pass and/or engagement across Xbox, cloud, and PC, is the platform, console sales don't tell a publisher anything about potential revenue, engagement does. Install base is a metric that's valid for Sonytendo, but for the way MS is selling the platform it would be as relevant for a publisher considering Xbox as telling a publisher how many PS5AD's were sold without the numbers for PS5 standard. Potentially, and especially long term, physical Xbox console players are going to pale in numbers compared to the rest of the platform engagement. It's not irrelevant, the consoles will represent "premium" customers, but not much of the actual "install" base. I imagine in 5 years the TV dongle + phone/tablet/PC xCloud apps will represent 70+ percent of "Xbox players", even if those users tend to engage far less than the console buyers.

Stuff like this is one of the things I always liked about the Xbox side of things, everyone is so much more relaxed and simply focused on the games and the user experiences. Over at Sony it's just fully fledged fanboy console wars all the time, all about touting up "muh sales" and gamer community propaganda.

@JayJ My favorite about that is how for months the Sony fans went on about how amazing TLoU2 sales were, regurgitating the first month sales over and over again as this massive super-success story for their team. And it was a success, commercially, it was their #1 selling launch to date. But even Jim Ryan had to answer an interview question that it wasn't the success story fans think it was (the sales plummeted in month 2, it was a supreme launch and then that was kind of it, everyone that wanted to play it bought it week 1 and then what was left, nobody cared.....no long tail sales at all.) You know it's bad when the fans go on endlessly about sales sales sales, and the CEO's like "yeah...the sales weren't really as good as fans think..."

I can't stand Jim Ryan, but I think I'd rather hang out on a forum with him than a lot of the "fans"

@NEStalgia
I can’t disagree with the potential future that you pitch, if it goes that way in the future and it probably will then Microsoft are setting them self’s up nicely and leading the way and probably the only business with the cash and overall tech to take the risk. Also someone has to lead the way.
But part of me still believes that more consoles sales will help Microsoft this generation.
It just leads to other sales including game pass and the more the console attachment rate the more the good word spreads and buzz about Xbox and it’s games, spread the hype etc.
I know for sure if Microsoft sold 100 million series x this generation they would be lighting the cigars and letting us know about it. That could lead to say 100 million more full paying game pass customers. Let’s remember game pass is only at around 20 million members and a lot of them at a cheap rate. 100 million series x sold with half a game pass 50 million up take would have Phil and gang celebrating into the new year.

@NEStalgia

You've been critical of Sony, and the fans, for some probably very valid reasons, especially the rampant fanboyism that unfortunately goes on in the periphery of these types of sites.

I'm actually surprised though, because I believe you and I had a good discussion on PushSquare about how we are both avid physical collectors. Or was it you used to be?... I forget.

I like Sony's strategy, and conversely am wary of what is going on at Microsoft, because I believe in the physical ownership aspect of this hobby. Gamepass is the exact opposite of that philosophy in a pure, tangible form. I don't deny it's a good value, but it represents an erosion of ownership rights which, long term, will further narrow consumer choice when physical releases are no longer offered as an option. Options being removed is never a good thing for us consumers. Gamepass is kind of hurrying the inevitable end of physical games as it peaks over the horizon.

When I defend Sony's practices or talk up their games' success in terms of stats, it's not because I believe Sony is an objectively better company by any means or even that the games/end user experience is better. The reason I do it is Sony is the last remaining avatar of physical game releases as I see it, Nintendo notwithstanding of course. Every disc-based console Sony moves this generation is a day longer I can continue to buy physical and enjoy being a collector. I want sales to skyrocket, while fully acknowledging Sony is just as awful as any other corporation. They just suit my interests and goals a bit better.

I can't speak for everyone, but that's where I'm coming from. The digital age is like Noah's Flood, and I'm the guy stubbornly climbing higher and higher to avoid the rising water level, but we're running out of places to go.

@UnlimitedSevens I've been critical of Sony's strategy on Push Square and Nintendo on NLife as well.....makes me pretty popular over there given the fanboy nature of many commenters Though it's funny because new critical Sammy is usually on my side in the op-ends (and the crowd piles on him for it.)

I haven't been an avid physical collector for a while though. I used to be. Then when I finally got real internet I treated myself to an X1X to be an all-digital console. I enjoyed the experience so much I ended up re-buying most of my PS4 library on PSN sales (what games I didn't move to XB.) Which turned out to be good for future-proofing since I then just moved the whole HDD to PS5 and it's reasonably happy there. I was last holding out on Switch, but I've started even buying most (not all) games digitally there, as well. I do miss my pieces of plastic swag to display. But my gaming habits have swung to jumping between multiple games (and on Switch, multiple consoles) as the mood strikes... Plus I have literally a tower of crates holding games dating back to the 80's....I really can't keep hoarding more forever! So I'm (mostly) digital across the board. And I'm the guy that left PC when Steam started taking over because I rejected digital....

I'm still a Sony (and Nintendo) fan but I'm very critical of their managerial direction under current leadership. I like the products....not so much the company selling them, and their policy decisions currently.

I agree about the physical ownership aspect, absolutely, though. That's actually what swung me to buy most things that can be bought on Xbox instead of PS to begin with though. MS seems to have a Steam-like approach to digital, and while not perfect, at the end of the day, all we can do is trust product direction. MS still lets me register Win98....they have built a reason to trust that they'll let me access my digital wares as long as I intend to access them. It's no guarantee, but they've earned that bit of trust. As has Steam (though if you were a PC gamer when Gaben first went on the Steam rampage and the Matrick-like policy he was pushing way back when...it took decades to trust them.)

Sony....they have a long way to go to prove that trust and they continue doing things to shake that trust that makes me wary to invest much in their digital ecosystem. And I know Nintendo will point-blank screw me over an ask me to thank them for the privilege. But my current-use demands I still go that route for all but the most special games.

RE Game Pass though, I think there's so much confusion about what it represents, and that ends up revolving in the Push Square echobox even when some of us try to carefully explain it. It's a rental service. Plain and simple. It doesn't replace physical or digital ownership. The fact that games rotate out of it (except 1st party, the headliners) is all the necessary proof needed. Played MH World on Game Pass and enjoyed it the past few months? Want to keep playing? It's leaving Game Pass. You can buy it. Here's a discount for your membership!

Obviously with the Series S it's clear they're really pushing digital distribution over physical (while promising they're not getting rid of physical.) Sony's toying with that, but more in the shallow end of the pool with the AD as well. But digital retail sales and the rental system that is Game Pass are still separate beasts. (conted)

@UnlimitedSevens I liken it to the old days on SNES, PS1, Genesis/MegaDrive. Games were expensive - like they're becoming again. Most of us couldn't afford to buy all the games we wanted. Or even many. So we rented. A lot. Most of my games back then were rented from the local store. 2 nights at a time. Then the ones I loved I'd end up owning eventually. Game Pass is that, but amped up to 11. For the sub you can play more games than you ever could otherwise. You can try all kinds of things you'd never try at full price. But it's not a replacement for ownership (digital or physical) of a title, either. It's a suppliment. It can serve as your only source of games and you can save tons of money, but for most people it's a suppliment (and MS' own data show GP members buy more, not less games. And every GP game has a "Buy to Own" button on it.)

It's only in PS circles that you hear the argument that the subscription is going to take away ownership. Music and video are also clear examples. Every amazon page lists the movie on DVD, HDBD, SD digital, HD digital, SD rental, HD rental (or free with Prime streaming.) Same for Music. I think despite the fears we've narrowed in on a very symbiotic distribution model where rentals, buffet subscriptions, and purchases can live side by side fairly happily with enough market.

Now as for digital versus physical, that's another matter entirely, subscriptions unrelated. Even Sony, most of their revenue now comes from PSN, not retail. It's only a matter of time, sadly. But I don't think that time is quite yet, and even Spencer has said they're still dedicated to providing options with physical and he doesn't expect that to end any time soon, if ever. Even if in NA/EU physical becomes mostly a memory, there's still many many markets in the world these companies sell to where that won't be the case.

I do think there's a loooong way to go, legislatively with digital rights. Not just for games, but across the board. That's a whole other discussion, but yeah, there's problems there, and they need to be addressed through the legal bodies of nations. For now we have to trust the companies, which is a tenuous thing. Long term we need laws for it. Governments have dropped the ball for 25 years. What else is new?

But yeah, I feel for the collector aspect and I'm fully aware of what I dislike about digital even as I participate in it. Some of it is just the swag. The inner magpie in all of us. I don't want to see that end, though with even Phil confirming they have no intention of ending it, and see the importance of choice and physical media, while what a company says under one leader isn't always what happens with the next, it's about as good as we get with these things. At least until the governments figure out how to handle digital property rights. Once that bridge is crossed, hopefully we can be at a point where legally physical and digital ownership have identical rights. Save the swag. I'd soooo buy the empty cases for my digital games..... that's a thing in Japan!

@NEStalgia Reality has been at odds with Sony fanboy claims for a long time now. The entire PS4 era felt like a real propaganda era when it comes to the Sony fanbase, like they got this really radical cultish fanbase with a disproportionately loud presence on most gaming sites that has a dark energy surrounding it. Like they don't love their favorite things so much as they hate yours, and you aren't allowed to question their claims without them trying to gang up on you with their cronies.

It's like I used to be a Playstation fan during the PS1 era back when most of my friends were N64 fans, and the PS2 era back when it was the best of times. Heck I even liked the PS3 pretty well, and the fanbase felt a lot more relaxed back then. The PS4 seemed like it just attracted the worst of the worst as far as the gaming community is concerned, like all of the obnoxious cultish fanboys flocked there for some reason, and now they are trying to continue that with the PS5 for reasons that nobody besides them can rationalize.

TLOU2 is just an example of the divide between the hardcore cultish fanbases and the general audience. The strong initial launch sales was the cult fanbase in action, because who else would rush out and buy a game like that day one. The lack of strong sales after indicates the lack of general audience cohesion, while they might be easily silenced by the cultish mob on the internet they have the loudest voice in the end by not buying the game.

Right now I think this all just shows off how the whole gaming industry is trapped in these bubbles right now. The PS4 mob was allowed to become such an issue for everybody else that it has effectively reduced most gaming sites to echo chambers that hold little to no relevance to the real world greater audience. Everyone who wasn't a part of the mob checked out as they got tired of being attacked, and now they just have a bunch of perpetual yes men who sugar coat everything Sony does while demonizing anything anyone else does. Considering how this is just a hobby for most people, simple entertainment, they just move on with their life. This has resulted in the video games media being very out of touch.

Yeah, whatever happened with TLOU2 sales numbers? It's been over a year... 😶

@UnlimitedSevens : I 100% agree with what you said. Physical games are teetering at this point, and I've actually gone backwards by playing my older consoles. I don't think there is any stopping Gamepass or Microsoft. The videogame consumer will take the cheapest route most gameplay value everyday of the week.

@Cyberbotv2

Yeah, the inertia of Gamepass is unstoppable at this point. Even if Gamepass is ultimately unsuccessful, which I doubt, two others will come to replace it, and so on and so forth, until someone gets it just right.

I know deep down I just need to let go and move on with the times. I think I may get out of the hobby, not just because of the transition to digital, but for other unrelated reasons - got a kid on the way, etc.

But like you say, I may just break out those older systems. I am weird, but I think those old games are just as good of experiences as these new AAA blockbuster titles. I never walk away unsatisfied for some reason. I think I've kinda lost the child deep down and need to reconnect with why I started playing games, to have fun. Games feel so clinical now, but maybe that's because I am just more knowledgeable and jaded now. Playing an old Sonic or Mario or Final Fantasy game bring the magic back a little for me, every time.