Do Xbox consoles still have a place at Microsoft?

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Two decades ago when the first Xbox came out it used the internet for small scale multiplayer and each game came on disc. Microsoft built a massive business selling consoles that could play games as well as discs. As the company looks forward to the next 20 years, it is doing so in an industry that is moving away from games available to you with a single device where mobility will inevitably catch up Xbox and cloud gaming are completely replacing physical platforms. One where it’s easy to ask: Should Microsoft make more consoles?

This is an enticing prospect. Supply chain disruptions and a global chip shortage caused by the Covid-19 pandemic have made the Xbox Series X/S very hard to find without constant vigilance or overpaying the reseller. Meanwhile, the Xbox gaming app is coming to Samsung smart TVs as part of Game Center on June 30, allowing anyone with the right Bluetooth controller to stream Xbox games without a console at all.

But for Phil Spencer, the man at Microsoft responsible for the gaming device everyone knows, hardware is still key. For him, moving to the cloud was all about creating a hybrid approach that would allow Microsoft to expand its market beyond Xbox fans. He said edge in 2020, he didn’t think the latest generation of consoles would be the last the company shipped, and his stance on the matter hasn’t changed. “We’ve been through two years of real market restrictions,” Spencer tells WIRED. “Giving people more choice in how they can play games has certainly been good for both our business and gamers.”

Cloud gaming on platforms such as Google Stadia did not have the smoothest start, but companies like Sony and Microsoft are better equipped to do so. Sony has just paired its PlayStation Now cloud gaming service with the more popular PlayStation Plus subscription. Microsoft has a recognizable name that makes it easy to identify the service from potential competitors.

Spencer also notes that while cloud gaming can attract new players, there will always be “people who are looking for high-end specialized devices to play games with the highest possible fidelity in their homes.” For many of these gamers, that device is the Xbox, and even Samsung’s head of service Won-Jin Lee agrees: “Hardcore gamers will always play their games on consoles.”

The Xbox app will first be available on Samsung TVs, but not only. The company says it is exploring other partnerships. Similarly, Samsung won’t be done with the Xbox. Lee says the idea was not to build their ecosystem around Xbox, but to work with it and companies like it. “Working with Xbox really gave us the foundation to build this service and how to move forward,” says Lee. “From the beginning, our philosophy has always been to offer a very open discovery experience.”

Instead of E3, Microsoft is gearing up to showcase upcoming games during a streaming event on June 12th. Spencer points to the company’s game library, as well as Activision’s recent acquisition of Blizzard, as a key direction for the company.

Indeed, it is video games that make sales, be it hardware or cloud games. Without a strong roster to draw players in, it doesn’t matter how many TVs overtake Xbox if no one wants to play.

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