The Verge interviews Phil Spencer - ‘The business isn’t how many consoles you sell’

SuikerBrood

Member
Jan 21, 2018
9,950
The Verge posted an interview with Phil Spencer. Not a lot of news, his vision seems to be consistent these days. He talks about subscriptions, selling consoles, scarlett (and there being one or two consoles) and their new studios.

Do you think you can release these too quickly? If the Xbox One X is the most powerful console, and then, two years later, there’s a new more powerful console, doesn’t that diminish what that means?

What I want you to think about in this is the players, not the specific version of a console they have. I think the question there is, “Is there a customer for the highest performing console, and are there enough customers where that makes sense?” If somebody bought an Xbox One X yesterday, I want them to feel completely that they can have a great experience for years and years. I also want to be as transparent as I can with them about the road map. So if somebody is sitting on the original Xbox One now, and they’re thinking about an X, they can make their own decision about what platform they want to have.

I don’t need to sell any specific version of the console in order for us to reach our business goals. The business isn’t how many consoles you sell. The business is how many players are playing the games that they buy, how they play. So if somebody bought an original Xbox One from us on launch day, and they’re buying and playing games, I don’t need to sell them an S. I don’t need to sell them an X. If they want to stay on the Xbox One they have and stay as a great member of our community or subscribe to Game Pass, that’s a great business for us.

I think it’s easy from the outside to judge the health of our business around how many consoles any company sells. In the end, how many subscribers you have to something like Game Pass, how many games people are buying, those are much better metrics on the health of the business.
So is Scarlett one console? Or is it like the Xbox One where you have a high-end, a middle class, and a cheaper one?

The video that we showed is talking about Project Scarlett. That’s the focus that we have, on that console and hitting that specification. That’s the console that we’re talking about.
Can you explain in simple terms what xCloud is? There seems to be some confusion around it and how it’s split into different parts with streaming and Remote Play-like functionality.
There are two things we’ll talk about: console streaming and xCloud. xCloud is us putting Xbox motherboards, in an Azure data center, and allowing you to connect to those motherboards and play games on hardware that is ours. So if you don’t own an Xbox or your Xbox isn’t available, you can connect to xCloud and play those games. xCloud is us putting Xboxes in the cloud, and you’re accessing those through a phone, which is our first focus. That allows you to take the gaming experience wherever you are. That’s xCloud.


Now if you already own an Xbox One, you’ve already effectively bought the same hardware that we’re putting in the cloud. So we challenged ourselves and said, “Well, can we allow you to turn your Xbox into your own data center, your own xCloud.” So then you can stream the games you own from the console that you already bought to your phone for free. So that’s what console streaming is. It is streaming from your console out of your home, the games that you own to your phone.


In the end, how you play is going to be the same. You’re going to be sitting there on a phone, you’re going to have a controller in your hand, and you’ll be able to play those games. Console streaming means the source of those games is your Xbox at home; for xCloud, the source of those games is us. The end user experience, I want to be the same. I want to connect to Xbox Live, the games that I have access to, my friends, and I want to play wherever I go.


So game streaming is free...
Yes.




 

Hucast

Member
Mar 25, 2019
1,459
It has become quite clear that Xbox is looking to dominate with ecosystem through every kind if hardware. Console is just additional hardware for the living room.
 

Gloam

Member
Oct 29, 2017
360
That pull quote is certainly true if they're moving toward a more services based business overall. But, there's also something to be said about MS having to pivot and come up with new business because the XB1 didn't perform as well as the 360.
 

Raijinto

Member
Oct 28, 2017
6,776
Yeah what he says there makes sense. I had an OG for a few years and only just recently bought an S but they're still getting lots of money from me through GP and game sales even though I'm never going to buy an X.

Thread will go downhill quickly though with that title I bet.
 

seloth

Member
Oct 11, 2018
1,869
I guess this is the only route to take when your current product is getting hammered, try and find that blue ocean like old Ninty.
 

cw_sasuke

Member
Oct 27, 2017
8,968
The more supported hardware out there the more subscriptions you can sell - its no rocket science.
They are probably more interested to keep the Xbox One S as an entry level system w. GamePass/xCloud and maybe expand the service to a system like Switch as well.
 

Eorl

Member
Oct 30, 2017
1,872
Australia
That pull quote is certainly true if they're moving toward a more services based business overall. But, there's also something to be said about MS having to pivot and come up with new business because the XB1 didn't perform as well as the 360.
It isn't just because of their run this gen though, it is in ever tech industry because subscriptions is what counts. Physical sales of a piece of hardware are great don't get me wrong as Sony has shown that with their PS4 phoenix but the focus for everyone is on extension of users. Traditional console focus doesn't achieve that whereas user base through diversity does.

Hence comments like this:

Oh man how the tables have turned
Sony definitely has put Microsoft in a different light of thinking but the industry is changing so rapidly now. Cloud gaming is where this will be strengthened as subscriptions will bring more brand value and continued profit rather than burst profit.
 

cw_sasuke

Member
Oct 27, 2017
8,968
Anyone with any sense can see that services are when the money is not hardware.
Depends on the company - for MS and their lackluster hw sales this gen pushing for services is obv. the best choice.
They have the servers and infrastructure to eat up alot of costs that other companies couldnt - same for something like GamePass.
 

CarterTax

Member
Oct 25, 2017
236
I do agree that it is not how many consoles you sell but the overall health of your business wrt subscribers to various services and software sales...

I just wish that Microsoft would be transparent with how many Gamepass subs or console sales they have if it's doing so amazingly. Both of their competitors give out hardware and subscription numbers iirc, so if it's doing so healthily it should be no reason to not divulge this information.
 

RCU005

Banned
Dec 8, 2017
300
The "turn you Xbox One into you own datacenter" is just Remote Play that PlayStation has had since the PSP.

I'm guessing that xCloud will work just like Stadia does? Will they have a subscription fee?
If your Xbox isn't available (it broke, for example) as he says, it would be cool if you still have the right to play your games on the cloud.
 

Premium

Member
Oct 27, 2017
546
NC
That pull quote is certainly true if they're moving toward a more services based business overall. But, there's also something to be said about MS having to pivot and come up with new business because the XB1 didn't perform as well as the 360.
This isn't just Xbox becoming platform agnostic with their services and tools, it's the entirety of MSFT. They're less interested on where you play but what you play. Gamepass and XCloud are pretty solid representations of that continual shift.

Nothing Xbox would have done this past generation would have prevented the company (as a whole) from pivoting their priorities.
 

Paul

Member
Oct 27, 2017
2,219
Xbox now means "gaming service by Microsoft", not any specific hardware device. I for one wholeheartedly welcome this, since it seems both Windows and Xbox consoles get good treatment by the company.
 

gofreak

Member
Oct 26, 2017
2,194
Sounds like it's true, that from a Microsoft first party perspective at least, there may not be next-generation exclusives any time soon.

That's a bit of a shift in thinking vs previous gens, and possibly vs their competitors.

I think it also speaks to the likely continued existence of Lockhart. They sound more interested in viewing a variety of hardware as just different access points to the same games, rather than building software around one level of hardware - so adding another lower powered and cheaper console into the mix would make sense from that perspective.
 

nofuckinidea

Member
Oct 25, 2017
309
Spencer and MS just get it. I'm very happy with that strategy to have the choice between stationary gaming and xcloud or both with their new hardware. Good job!
 

metalgear89

Member
Oct 27, 2017
621
I don't think sony see selling hardware as there main business either. Games are where the money is at and MS is nowhere close to sonys quality output and nothing I've seen at E3 is going to change that.

Eventually they are going to have to stop subsidising gamepass and only then we will see if their service is worth it to consumers, any subscribers numbers we see now i expect to drop hugely once the cost will go up.
 

Gloam

Member
Oct 29, 2017
360
Nothing Xbox would have done this past generation would have prevented the company (as a whole) from pivoting their priorities.
I don't know if that's necessarily true. Don't you think that if the original vision for the XB1 with all the TV stuff had managed to take off that the focus would be very different? We saw a big shift in the other direction when all that stuff didn't take, I feel that MS's services, and their focus would be fairly different had the initial XB1 plans worked out. For example, Gamepass could just have easily been a TV service.
 

Deleted member 49574

User requested account closure
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Nov 12, 2018
454
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The "turn you Xbox One into you own datacenter" is just Remote Play that PlayStation has had since the PSP.

I'm guessing that xCloud will work just like Stadia does? Will they have a subscription fee?
If your Xbox isn't available (it broke, for example) as he says, it would be cool if you still have the right to play your games on the cloud.
Did you even read the article
 

Golvellius

Member
Dec 3, 2017
809
I just wish that Microsoft would be transparent with how many Gamepass subs or console sales they have if it's doing so amazingly. Both of their competitors give out hardware and subscription numbers iirc, so if it's doing so healthily it should be no reason to not divulge this information.
Why would they?
Maybe they prefer to lead the competition into thinking that it is not doing well (by not providing any numbers which according to a lot of users of this forum is an indication of failure) so they can serve up a nasty surprise a few years later.
 

Zem

Member
Oct 25, 2017
1,381
United Kingdom
That pull quote is certainly true if they're moving toward a more services based business overall. But, there's also something to be said about MS having to pivot and come up with new business because the XB1 didn't perform as well as the 360.
Not sure the XB1 performing amazing would have changed what's going on now, services are where gaming is headed and where the money will be, MS is just one of the leaders in that regard.
 

Newlove

Member
Oct 28, 2017
348
England
Not sure I'd pay additional money for another service to stream Xbox games anywhere, but free remote play sounds cool...wasn't this already a thing though? I remember playing on the Xbox app on my PC with a controller while my Xbox was in the other room. I guess that's slightly different in that was the same Wi-Fi though. I'm not too keen on the idea of having my Xbox kept on whilst I'm away to remote play. Anyways, always good to have options.
 

Dan

Member
Oct 25, 2017
4,750
It has become quite clear that Xbox is looking to dominate with ecosystem through every kind if hardware. Console is just additional hardware for the living room.
That's not really new.

Look at how the Xbox One was designed, and how many times the mention of "TV" in the original presentation.

It's also one of the reasons why PS4 did so well in comparison.
 

Ruslnis

Member
Feb 26, 2018
1,824
as always people forget that without selling you the hardware MS cant get 3rd party royalties and money from GOLD (which are the 2 most important things for xbox right now)
 

Dust

Member
Oct 25, 2017
5,716
Xbox had to change strategy since they cannot compete with Sony on traditional level.
Makes sense for them.
 
Oct 27, 2017
3,350
That's not really new.

Look at how the Xbox One was designed, and how many times the mention of "TV" in the original presentation.

It's also one of the reasons why PS4 did so well in comparison.
Exactly, MS since Xbox's inception have just continuously moved the goal-posts. They always wanted to dominate the future of entertainment.