Microsoft’s Xbox One was never going to catch up to Sony’s PlayStation 4’s sales numbers. I do not mean just in the term of actual units, but also including the mindshare lost in 2013. A lot of goodwill from fans had been lost over the infamous fumbling of messaging when releasing the Xbox One. Over the years, faces in leadership changed, the consoles continued, and at some point, the whole mindset at Xbox changed. This change was not as simple as a small adjustment, but an entire direction, an industry-changing shift. Both Xbox Game Pass and the introduction of Project xCloud looks to bolster this change.
Losing Consumer Confidence Is Both Crippling and Revitalizing
2013 will always be remembered for all the wrong reasons with Xbox. This is the year that showed how disconnected a company could be with its user base. Xbox entered the year riding high on the success of the Xbox 360. However, it only takes a few statements, decisions, and a sense of arrogance to have this all come crashing down.
Catching the PlayStation brand in terms of hardware sales is not daunting just because of consumer confidence, but it would also be an expensive task. Social media in this generation was significantly more impactful than the prior generation. Social media was still in its infancy during the Xbox 360 era and companies were still working out how it impacted their customers. Making changes likely always comes with pushback, but social media arguably amplifies this tremendously. Bad news goes viral quickly, and so do irresponsible spins on these companies.
An excellent example of bad news giving a viral hit is when Xbox announced the idea of always online and even the Kinect being included and embedded into the then Xbox ecosystem. These ideas seemed extreme and wild as in the U.S., many individuals were still dealing with the domestic activities of the NSA. These new additions to the ecosystem were bound to draw comparisons of a spy machine, regardless of involvement or not.
Before the launch, the then Head of Xbox Don Mattrick, even suggested that those without internet service could purchase the console of the previous generation. This was not going to sit well with consumers, and thus confidence began plummeting. Even when Xbox corrected these concerns, it seemed to fall on deaf ears. To this day, some consumers still believe a Kinect is required to play the Xbox One.
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The hardware sales gap between the Xbox One and PlayStation 4 began to widen at an alarming pace for the Xbox division. This gap was so large that Xbox even decided to stop reporting sales numbers altogether. Changes needed to be made, and they needed to find a way to regain consumer confidence. Enter Phil Spencer. Under Spencer, Xbox had to do something drastic to recover not only the consumer, but also Microsoft’s confidence. Rumors had been circulating that Microsoft was not happy with not only the delivery of the Xbox One, but also the direction that the entire gaming division was heading.
So how do you compete when you are so far behind? Month after month, numbers are delivered and were seemingly used as a battering ram against the Xbox brand and its user base. Month after month, these numbers continued to widen. The fix began with adjusting the narrative of what you are doing wrong and focus on what you are doing well. This is the point that Xbox stopped reporting sales numbers in favor of user numbers. This was not the only adjustment Xbox would make either. In fact, the most significant impact would reside in what would take place next.
If You Cannot Beat Them, Sell To Those Who Will Buy-In
One of the most controversial changes Xbox made this generation was moving games to other platforms. Why would any console manufacturing gaming business decide to change what has been established for decades? Games like Cuphead found a new home, first on Xbox, then the Nintendo platform, somehow on Tesla, and finally PlayStation. Many gamers may find this weird, but at the end of the day, the revenue that flows to the bank account is what matters the most. Cuphead is just one example, and we have not even discussed PC yet.
Even bigger than the moving of games onto other platforms was the decision to move Xbox [Games Studios] games to the PC: day and date. Now individuals who were not on Xbox had an alternative way to play games exclusive to the console. For gamers, this sort of move can be confusing; for business, it makes cents, literally, and for Xbox, this generation has not been too kind. While that may be due in part to how the launch of this console generation started with bad messaging, the business still needs to make money to continue to operate and be a figure pushing this industry forward.
Initially, this started with the Play Anywhere initiative, which allowed specific titles purchased on Xbox to be played natively on a PC via the Windows Store. This also allowed games to be played where you were currently gaming and then over to another platform. While the program is still operating as intended, it has been a while since a game has been included in this program.
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Xbox Game Pass eventually found its program on the PC platform. This service also introduced a new slate of games to Game Pass that were not able to be played on the console. Xbox wisely combined this service with its console version in addition to Xbox Live, providing a discount with Game Pass Ultimate. Since starting the service, many developers have stepped forward, stating that the program helped them develop the game and receive sales they did not expect to hit.
Larry Hyrb, Phil Spencer, Pete Hines & Todd Howard discuss the recent intention of acquisition by Microsoft for Zenimax Media.
Taking additional steps into the realm of PC, Xbox games began to find a home on the popular game store and launcher Steam. This move seemed contrary to the ideas a company would have with its competition. Steam would appear to be a direct competitor to the Windows Store and even to Game Pass. However, understanding the fact that many PC gamers put trust in Steam and want to play where their libraries are, this move proved to be wise. At one point in the month of August 2020, four Xbox Game Studio titles found themselves in the top 10 of the Steam charts. Push back from many gamers suggested that Xbox games do not sell, and there was not a market audience for them. Steam proved this suggestion to be false.
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Project xCloud also looks to bolster the user base via mobile gamers. While mobile gaming may not be a significant factor for many western markets, it is central to those in territories and countries that Xbox has struggled for decades to impress. Mobile gaming is a major player in countries such as Japan and South Korea. Aside from the Nintendo Switch, neither Xbox nor Sony has been able to draw a firm stance with this particular market.
While Sony has made valiant attempts that I do not consider failures by any stretch of the imagination, it was pale in comparison to the effect that mobile phones have been able to produce. In a move that clearly helps push the industry forward to where gaming is going in certain regions, Project xCloud has been introducing itself to relatively new audiences that had previously not even included Xbox as a factor for gaming.
Why make all these moves? In the end, Xbox looks to be true to their word in that they do not care where their audience plays. They care that you are in their ecosystem where YOU, the gamer, feel most comfortable playing.
Xbox Has No Games
Another major change that Microsoft looks to switch up is the perception that their devices have “no games.” While it’s not a reality, it is true that the Xbox storefront does have less available than competitors. While there are plenty of games that have come exclusively to the Xbox devices, shaking the Halo, Gears & Forza rhetoric has been difficult.
The changes Xbox made to combat this rhetoric began in 2018 when Xbox announced at E3 that they acquired four new studios and started a completely new studio. Shocking the crowd with the Ninja Theory acquisition (Hellblade), then acquiring developers that have worked with Xbox before. Such as Compulsion Games (We Happy Few, Game Preview), Playground Games (Forza Horizon series), and Undead Labs (State of Decay series). They also announced that there were starting a completely new studio with The Initiative, that would be lead by Darrell Gallagher (Tomb Raider). Later that year at XO18, Xbox announced the acquisition of Obsidian Entertainment (The Outer Worlds) and inXile Entertainment (Wasteland series). Then in 2019, Xbox once again announced they had acquired Psychonauts developer Double Fine.
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During the time of the acquisition, many of the developers were already working on games. This lead to a concern among many gamers on whether or not their games would be exclusive to the Xbox platform or if they would stick to original development plans. As of now, the only game to find a home only on approved Xbox platforms, and Steam, has been Ninja Theory’s Bleeding Edge. This showed that while Xbox was looking to bolster their available developers, they were not aggressively looking to lose potential customers that may look at Xbox in the future as an adequate platform.
Most recently, the gaming industry was left in shock when the announcement of Microsoft was beginning the process of acquiring Zenimax Media. While the acquisition has yet to complete, due to the legal process required, this would bring the total amount of studios available to Xbox to 23 total. It also leaves questions about exclusivity and current contract plans, which Phil Spencer has stated they would honor current contracts, but future games would be on a case-by-case basis. This move, once completed, would make Microsoft the largest game publisher in the world.
The acquisitions also make the Game Pass subscriptions a much more lucrative offer as Xbox leverages it’s own published and developed titles as being day and date. With the potential plethora of games able to be released, subscribers will get a chance to play a game that they may have passed on before, whether due to taste or financial constraints. For xCloud users, it increases the amount of games they may choose to play remotely from the ecosystem.
Xbox Series Launch World Wide
For the introduction of the Xbox Series X & S, Xbox seems to have navigated the announcements and marketing much more wisely than in 2013 with the Xbox One. Making a splash announcement at The Game Awards 2019, the world was shocked that it was present at all. This was very uncharacteristic of Xbox of years past.
One mistake that Xbox made in 2013 was electing for a staggered worldwide launch, whereas PlayStation met the worldwide demand. For 2020, this seems to be a tale of two changes. This time around, Xbox has determined that they will be meeting the worldwide launch, whereas Sony has elected to stagger the European market. The latter is a very odd change, but for Xbox, it’s a change that favors their direction. Included in the launch for Xbox is the East Asian market that includes Japan and South Korea.
SK Telecom is promoting Xbox cloud game everywhere in Korea. First month 100 KRW (under $0.1). Xbox games have never been exposed to so many people in Korea. pic.twitter.com/GB2hhkFW30
— Xbox News for Koreans 🇰🇷 – 네이버 Xbox 정보 카페 (@KoreaXboxnews) September 26, 2020
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The 2020 Tokyo Game Show began on September 24th. To kick the show off, Xbox had to be first, and the reason was they were excited to show their changes for these markets. Japan has never been an easy market for Xbox, but in gaming, it is an important market. Many developers have stated that it’s hard to make games for a console that is rarely seen in their market. This has caused Xbox to miss out on games that could have potentially found an audience on their console. Many Japanese developed titles end up on the PlayStation and Nintendo devices, not due to deals, but simply due to default.
In trying to change the perception of Xbox in Japan, Xbox Head Phil Spencer has made numerous trips to visit developers there. Building relationships is a very key and instrumental for ensuring games show up on Xbox platforms that may not have been there before. It is reported that Xbox is ensuring that over-development kits reach over 100 different developers in Japan alone. A move like this surely helps Xbox visibility for developers.
The Future and Beyond
In the past several years, we watched as Xbox came from the lowest of its lows and rise to the expectations of many gamers. Xbox shows it’s commitment to be a forward-thinking company – for the industry continues to push it with its implementation of cloud gaming, pro-gamer subscription services, and new messaging that is less detrimental as 2013 was. While it will take time to see the fruits of the labor, it’s hard to believe that Xbox is not moving along the tracks of success. The upcoming release of the Xbox Series, Project xCloud expanding, and Game Pass increasing its library, it’s a start. As everything, only time will tell if Xbox has made the right moves that gamers want; moves that put Xbox into the worldwide recognition that it wants.
