Xbox boss Phil Spencer isn’t quite ready to predict a fully Netflix-like future for video games.in a Interviewed by The New York TimesThe head of Microsoft’s gaming division said the retail market “continues to experience strong growth.”
“So let’s make sure we offer our customers a choice between subscriptions and deals,” he said.
Regarding Microsoft’s efforts in cloud streaming, Spencer agrees it’s a bit like Netflix, but is quick to note that buying games individually is a “traditional part of gaming,” not something he plans to phase out. It also doesn’t make sense to do so, as Game Pass’s rapid growth still hasn’t put it ahead of retail game purchases.
“Transactions are bigger than subscriptions,” Spencer said. “Subscriptions are growing faster just because it’s relatively new. With Game Pass, we were one of the first movers in that space. But the transaction business is very big. We still sell physical discs.”
Xbox Game Pass and its related sibling, PC Game Pass, are a little conundrum for me. On the one hand, it makes sense to suggest that everyone take advantage of the $1 introductory offer and spend a month playing as much co-op and single-player as possible. Even at its regular price of $10 a month, a Game Pass subscription is a good deal if you play a lot of games, and the PC version includes over 400. On the other hand, I feel a little bit like I’m writing a confession to my future self, and he’s going to look back at this one day because he’s having a hard time understanding how we could be so stupid that subscribing to a library of games replaces buying video games.
While cloud streaming doesn’t appear to be replacing downloaded games anytime soon — Google’s Stadia revolutionized gaming, and Segway revolutionized walking — many powerful companies still see this as the future, including Microsoft.
“I think cloud is critical,” Spencer said. “And Netflix obviously has the cloud. Amazon has the cloud. Google has real cloud capabilities.”
In this regard, Spencer thinks Microsoft has an advantage because it already knows how to make games in addition to cloud streaming technology.
“But without content, community, and cloud, I think it’s time to get into games — you can see that in what Netflix is doing,” he continued. “I think what they’re doing is smart. They’re buying some studios. They’re learning the creative process of interactive entertainment. I think it’s a really smart way for them to get into the space. For us, we’re a lot, a lot. It just started years ago.”
Makes sense! New World was Amazon’s first hugely successful game, and it took years of trying. Meanwhile, Microsoft released a ton of hit games last year: Halo Infinite, Forza Horizon 5, Age of Empires 4, Psychonauts 2, I can’t forget Deathloop because Bethesda and Arkane are both Microsoft now company, it still feels weird.
I agree that Microsoft is leading the way in subscriptions and cloud gaming, so it’s nice to hear Spencer say the old ways are still here now. However, I’m not sure I fully trust him. Given that we’ve gotten to the point of calling it “traditional,” will your old game purchases really survive the next two decades? I’m not sure.
Spencer touched on a number of other topics in a wide-ranging interview with The New York Times, including Activision Blizzard and the allegations of sexism it faced (“Xbox’s history is not spotless”) and ideas about the so-called “metaverse.”you can read or listen interview here.