Recent news suggests Microsoft will shift Xbox to a multiplatform release strategy; existing and future first party games, including Starfield, Indiana Jones, and Gears of War will be ported to PS5 and Nintendo Switch. While we won’t know the whole story until a “business update” next week, I expect the change to be extensive, with many if not most top tier titles available soon on PSN and the Nintendo Store. In the face of lagging sales and stalled Game Pass subscriptions, the corporation is making a big bet that will attempt to thread a needle: keep an Xbox ecosystem sustainable – digital purchases on the Microsoft Store, lively Xbox Live network, Game Pass subscribers – while going multiplatform with in house studio games to generate additional revenue.
It’s a risk; no gaming company has succeeded as such an extensive third party publisher and simultaneous platform holder. Executed poorly, the plan could push the Xbox ecosystem into an eventual death spiral: gamers shift away from Xbox with its lack of exclusives, the install base drops, so other publishers stop porting games to Xbox, which leads to fewer players, until eventually Microsoft pulls the plug. Xbox hardware and accessories are dead, the digital library goes kaput, and Microsoft becomes a pure third party publisher like Sega.
However, there’s zero chance Microsoft will jump to the Sega route next week for the financial loss alone on third-party game sales and DLC. No more Xbox ecosystem eliminates cross-promotional marketing for Game Pass and other Microsoft services, restricts where Game Pass is accessible, and loses the “network effect” of gamers playing on Xbox Live. Still, Microsoft’s multiplatform shift adds a net benefit to Switch and PS5 – the ported Xbox games – without adding similar benefits, in a vacuum, to Xbox players.
Stress the words “in a vacuum.” Multiplatform sales will generate significant revenue to shore up Xbox ecosystem features and functionality. I bet Microsoft will lean on a more robust, growing Game Pass and the flexibility of its digital library access as the signature reasons to stay with the platform.
For Game Pass, many players don’t sign up or churn because of the service’s lack of big mainstream titles. That could change with the Activision Blizzard acquisition alongside Microsoft’s many existing first party studios. Porting games to rival consoles adds revenue to justify more Game Pass titles, as does what I suspect will be additional studio acquisitions over time. Thanks to King, we’ll see more inroads into mobile to court new subscribers beyond the existing PC and console market. Furthermore, I’d imagine any boundaries across mobile, console, and PC would eventually collapse; one device allows you to play the entire Game Pass library practically anywhere, natively or through streaming.
That said, game subscriptions alone can’t sustain a larger ecosystem. Some won’t ever feel comfortable with the Game Pass approach, and there will always be desirable games that fall outside the service. To entice customers to keep buying on the Microsoft Store over Nintendo, PSN, or Steam, Xbox will likely promote its platform’s accessibility and flexibility over a wide range of devices. Spencer noted you’d eventually be able to play digital purchases via xCloud, which means if xCloud develops into a robust enough service, newcomers don’t feel the need to buy a $500 console or $1000 PC to the game. They play via streaming on their existing TVs, laptops, and mobile devices. There are already countless Windows PCs to play content, and for those that want a traditional console, I suspect Xbox could license multiple third party options, effectively mini PCs (already the practical form factor of a Series S or X) at different price points, some of which may be portable like the Steam Deck. Again, third party game revenue helps prop up any financial losses on future Xbox hardware (first or third party), along with the capital to invest in more Cloud Streaming improvements.
At its core, a new Xbox multiplatform approach emphasizes value (great games on Game Pass for a low entry price, playable hardware at different price points) and accessibility (many devices to play on, Xbox games on your preferred platform.) Steam might have variety, but it’s for a high end, technical audience. Nintendo and Sony have great exclusives but are mostly locked behind their consoles and higher prices. It’s a fresh approach that leaves the enthusiast console war behind to court gamers on every device imaginable.
Admittedly, while my predictions align well with Microsoft’s cloud-heavy “anyone, anywhere, on any device” philosophy, it’s still conjecture on my part that depends on multiple long term bets paying off. But it all starts with the messaging and marketing out of Redmond; whatever comes out of next week’s business update could set the tone for years to come.