Instead, it has chosen to pursue a different strategy to the Japanese companies, one focused on fulfilling developers’ vision of enabling customers to play their games on any screen.
“We’re not in the business of out-consoling Sony or out-consoling Nintendo,” Spencer said.
“There isn’t really a great solution or win for us. And I know that will upset a ton of people, but it’s just the truth of the matter that when you’re third place in the console marketplace and the top two players are as strong as they are, and have in certain cases a very, very discrete focus on doing deals and other things that kind of make being Xbox hard for us as a team, [and] that’s on us, not on anybody else.”
He added: “I see commentary that if you just built great games everything would turn around. It’s just not true that if we go off and build great games then all of a sudden you’re going to see console share shift in some dramatic way.
“We lost the worst generation to lose in the Xbox One generation where everybody built their digital library of games. So, when you go and you’re building on Xbox, we want our Xbox community to feel awesome, but this idea that if we just focused more on great games on our console that somehow we’re going to win the console race, I think doesn’t really lay into the reality of most people.”
Spencer claimed that 90% of the people who buy a console every year already own a PlayStation, Nintendo or Xbox console, and their digital game library lives on that ecosystem.
“This is the first generation where the big games that they’re playing were games that were available last-gen. When you think about Fortnite and Roblox and Minecraft, the continuity from generation to generation is so strong.
“I see a lot of pundits out there that kind of want to go back to the time where we all had cartridges and discs and every new generation was a clean slate and you could switch the whole console share. That’s just not the world that we are in today. There is no world where Starfield is an 11 out of 10 and people start selling their PS5, that’s not going to happen.”
“The smallest screen that we play on is actually the biggest screen when you think about the installed base in phone,” he said. “That’s just a place where if we don’t gain relevancy as a gaming brand—we’re not alone in seeing this—over time, the business will become kind of untenable, for any of us.
“If we’re not able to find customers on phones, on any screen that someone wants to play on, you really are going to get segmented to a niche part of gaming that running a global business will become very challenging.”
He added: “As a percent of the overall gaming business, the console business is shrinking, because the overall business is growing and console stays relatively flat as a business, same thing with PC.”
Spencer told Kinda Funny that developers want their games to be playable on as many devices as possible.
“We have this unique vision because we see what creators want to do. Creators want to build games that can meet players on any screen, people play with their friends regardless of what other screen they’re on, and the console is the core of the Xbox brand, there’s no doubt, so we will stay focused on making sure that console experience is awesome.
“But I know some people want to hold us up as just being a better green version of what the blue guys do, and I’m just going to say there’s not a win for Xbox in staying in the wake of somebody else. We have to go off and do our own thing, with Game Pass, with the stuff we do with xCloud and the way we build our games.”
And while he admitted that the company failed to deliver on what it presented during last year’s Xbox Showcase, Spencer said he was “very enthusiastic” about this June’s Showcase event and Microsoft’s upcoming games.