Phil Spencer: Microsoft has no plans to abandon disk drive consoles yet, but it all depends on demand
The head of Microsoft's gaming division, Phil Spencer, gave an interview to journalist Steven Totilo (Phil Spencer). He spoke about the recent layoffs at the corporation, the growing popularity of cloud games and console strategy.
The main thing from the conversation
- Spencer admits that the global gaming market is barely growing, but he is confident in the business potential of Xbox.
- In his opinion, gaming companies are not doing enough to find a new audience. "Let's take the console as an example. There are 200 million households in the world where they play on consoles. This number has not changed in the last five to six years," Spencer said. He pointed out that Microsoft and other companies have found ways to get more money from one player, but they do not contribute to the long-term growth of the gaming market. For example, we are talking about raising the price tag of games to $70.
- Spencer believes that we need to come up with ways to bring games to those people who are not playing them right now. "It could be a new device, or a type of access to games, or a price category of games."
- Microsoft is developing cloud games for this purpose, and not unsuccessfully. Now a double-digit percentage of the total number of hours spent in Xbox games will be useful for the cloud.
- According to Spencer, the Xbox Cloud Gaming service is growing especially well in markets "that will never become console-based."
- During the conversation, Totilo recalled court documents on the deal with Activision Blizzard, from which it became known that Microsoft was considering releasing a "digital" version of the Xbox Series X console — it would retain performance, but lose the disk drive. Spencer did not comment directly on this information, but said that Microsoft is acting based on the interests of users.
- "We are working with physical media, but we do not need to develop the direction disproportionately to customer demand," Spencer said. "Our goal for Xbox development is to do what most users need. And now most of our users are buying games digitally." Nevertheless, Spencer stressed that disc abandonment is not part of Microsoft's strategy.
- Speaking about the dismissal of 1,900 people from the gaming division, Spencer explained that they are necessary for the further growth of the Xbox business. "I have obligations to the company, [...] and I have to provide us with the best conditions for long-term growth. Most of the efforts are aimed at creating great products that will exceed expectations and find millions of customers. But honestly, the cost of developing products includes the people who work on them," Spencer said. He also noted that after the purchase of Activision Blizzard, the staff of the gaming division grew by 15 thousand people.
Earlier, Microsoft announced that it was going to release four of its games on competitors' consoles (according to media reports, these will be Pentiment, Hi-Fi Rush, Sea of Thieves and Grounded). The corporation has also started working on a next-generation console, which will be the "biggest technical breakthrough."
