Microsoft’s Head of Xbox on Why They’re Losing the Console Race: ‘Not in the Business of Out-Consoling Sony’

In an interview with Kinda Funny Games, Microsoft’s Head of Xbox, Phil Spencer, readily admitted the console wars are not in Xbox’s favor.

“We’re not in the business of out-consoling Sony or out-consoling Nintendo,” said Spencer, confessing that Xbox is third place in the space and that trying to change that would be tough going. “There isn’t really a great solution or win for us.”

Spencer reiterated Xbox’s current mission statement is making the brand more of an ecosystem than a one-for-one competitor with rival console manufacturers, since melding the PC and Xbox ecospheres is a value proposal wholly unique to Microsoft. As to why Spencer feels this is the right fight to pick when it comes to making a name for the Xbox brand, he pointed out that the pack leaders, Sony and Nintendo, aren’t making life easy for him in the console sector.

“The top two players,” Spencer said, “have very, very discreet focus on doing deals and other things that kind of make being Xbox hard.” He quickly clarified, though, that “that’s on us, not on anybody else,” possibly to avoid sounding like he was pointing at Sony and Nintendo business practices as the reason Xbox is struggling in certain areas. With regards to what struggles he may have potentially been alluding to, it could very well be Sony’s tendency to strike exclusivity deals that leave Xbox consoles out of the equation.

Also Read:
Microsoft-Activision Isn’t the End of Video Game M&A – It’s Just the Beginning | Analysis

Games that highlight such exclusivity agreements include “Forspoken” and “Deathloop,” which were Sony PlayStation console exclusives (the games still came to PC) at launch, though Microsoft’s acquisition of ZeniMax led to it owning “Deathloop” (Microsoft still honored the “Deathloop” console exclusivity window).

Spencer also credited Xbox’s current bronze medalist position on the top-three-consoles podium to the Xbox One generation. He argued having great games does not solve every problem or win a company the console race, positing that console buy-in is primarily determined by generational continuity and a consumer’s preexisting ecosystem buy-in, meaning Xbox One fumbling the ball at the dawn of the digital revolution dealt Xbox a bad hand when it came time for Spencer to steward the Xbox Series X and S out of the gate.

Spencer also touched on the gestating Activision Blizzard King acquisition (though no major updates were given), as well as the launch of “Redfall,” which was hit with below-average reviews and a mixed-bordering-on-negative general reception when it debuted.

“If you’re afraid of [building games that review in the 60s], you shouldn’t be in the entertainment business,” Spencer said said, admitting that not every Xbox release is going to be a slam-dunk with critics and fans.

Also Read:
ChatGPT Picks Winning Stock Portfolio, Easily Beats Top-Performing Funds

Catch Spencer’s full interview in the video above.