In 2023, digital sales account for the majority of video games sold. But this wasn’t always the case. In fact, this really didn’t start until the Xbox One and PlayStation 4 era of gaming. And according to Microsoft Gaming CEO Phil Spencer, losing to Sony in that generation has put Xbox at a disadvantage, as owners of a given brand are unlikely to jump ship and leave behind all their digital purchases. As a result, Spencer doesn’t even think Bethesda’s upcoming, epic-scope RPG Starfield will get PS5 players to jump over to Xbox.
In a Thursday interview with Xcast, Kinda Funny’s Xbox podcast, the Xbox boss admitted that Microsoft lost the eighth-generation console war, calling it the “worst generation to lose” as that was when players built up their digital libraries of games. As a result, Spencer says most people who walk into a store to buy a console are already connected to an ecosystem and can’t be swayed by big exclusives or other rival-platform hits. He pointed out that some onlookers have suggested all Xbox needs to do to win is to “build great games,” and that that will shift things. But Spencer claims that just isn’t true anymore.
“We’re not in the business of out-consoling Sony or out-consoling Nintendo. There isn’t really a great solution or win for us,” Spencer said. “And I know that will upset a ton of people. But the truth of the matter is that when you’re third place in a console marketplace and the top two players are as strong as they are and in certain cases have a discrete focus on doing deals and other things that will—that make being Xbox hard for us as a team—our vision is everyone on console has a great experience and they feel like a first-class citizen.”
Going further, Spencer told the Xcast podcast that even if Bethesda’s much-hyped open-world space RPG, Starfield, ends up being a critical hit, that won’t likely shift things in Xbox’s favor.
“There is no world where Starfield is an 11/10 and people start selling their PS5s. That’s not going to happen,” Spencer said.
Xbox’s future includes expanding its audience
Now, I’m not entirely on board with this, as I think people will buy new consoles to play great games and I also think Nintendo has shown that even if you release underpowered consoles that don’t support modern features, all that really matters is your games. Nintendo’s Wii U was a huge flop and yet the company bounced back with the Switch.
It’s also weird to see Spencer claim digital libraries are the main reason people aren’t buying his company’s consoles in the era of Game Pass, a service that basically negates any need to have a large, already-established digital library to get the maximum value out of a new Xbox Series X.
Still, it’s no secret that Microsoft has been shifting away from focusing purely on selling and promoting consoles, and Spencer once again hints at this, telling Xcast that the company has a “unique vision” for the future. While the Xbox console will remain a key part of the “Xbox brand,” Microsoft wants to make games available on more platforms, like phones and PCs, in order to reach as many people as possible.
“The console is the core of the Xbox brand, no doubt, so we will stay focused on making sure that console experience is awesome. Some people want to hold us up and believe we are a ‘better green version of what the blue guys do,’ and I’m just going to say, there is not a win for Xbox in staying in the wake of somebody else. We have to go off and do our own thing,” Spencer said.