Microsoft’s Xbox business needs to grow. Sales of the company’s Xbox Series S and He admitted that in 2022, a dry year for Xbox games after Microsoft’s big Bethesda exclusive game. star field It was delayed.
An Xbox Game Pass slowdown could be why I’m hearing several Xbox exclusives are coming to the consoles Microsoft usually competes with. Sources familiar with Microsoft’s plans say so The edge that the company is preparing to release a select number of Xbox games on PS5 and Nintendo Switch. Weeks of rumors suggest that Hifi fever, sea of thievesand even Bethesda titles like star field and Indiana Jones could appear on platforms other than Xbox.
The first two games to appear on rival consoles are Hifi fever and Penitence, according to sources. Microsoft is also currently planning to launch sea of thieves on platforms other than Xbox later this year, with other first-party titles also being considered.
Releasing Xbox games on PlayStation or Nintendo Switch is a seismic shift in strategy, and not one that Microsoft has taken lightly. It will give Microsoft more reach for its first-party games and a chance to generate more gaming revenue, but it also comes with a lot of risks.
Microsoft’s overall gaming business just overtook Windows in terms of revenue, thanks to its acquisition of Activision Blizzard. That massive $68.7 billion acquisition will weigh on Microsoft’s mind, especially considering that Obligations is a great cross-platform game that generates key revenue on these platforms and on mobile devices. That slowdown in Game Pass will also be part of the reason why Microsoft is even considering more cross-platform games.
In May 2022, Microsoft had an ambitious goal of 100 million Xbox Game Pass subscribers by 2030. At the time, the service, which allows Xbox owners to subscribe to a library of games, had 25 million subscribers, up from 18 million in 2021. It looked like it was going to continue growing rapidly amid Microsoft’s device-agnostic focus on consoles, PCs and cloud gaming.
Then Xbox Game Pass started to stagnate. star field and red fallthat were going to be major Xbox exclusives, were delayed from a 2022 release to 2023, with star field A key holiday window is missing.
“It looks like we are likely to go through a gap of almost 16 months between major exclusive releases on our platform,” Microsoft Gaming CEO Phil Spencer said in an internal email to Xbox leaders in May 2022, revealed in it FTC v. Microsoft case. “This is truly a disastrous situation for us given everything we have invested in content across all the studios in our (Game Pass) content pool.”
In the months since, Microsoft has not provided any updates on subscriber numbers to investors. It’s been more than two years since the 25 million figure was announced alongside the company’s acquisition of Activision Blizzard, and some analysts estimate Microsoft has only about 33 million subscribers.
If accurate, that represents growth of about 33 percent in two years. microsoft targeted a 73 percent growth rate for Game Pass subscriptions for a single fiscal year ending in June 2022, but only managed 28 percent. The company then Xbox Game Pass growth fell as a target for Satya Nadella’s executive compensation last year, after first exceeding his ambitious internal Game Pass targets in 2020 and then missing compensation targets for two consecutive years.
Instead, Microsoft focused more on PC Game Pass growth last year and scaled back some of its Xbox Cloud Gaming plans. The combination of Xbox Series S, the effective $299 Game Pass console, and cloud gaming was supposed to drive a big chunk of the 100 million Game Pass member figure that leaked in FTC v. Microsoft materials, but sales of Microsoft’s latest consoles won’t get the company there alone.
Microsoft has been looking for other avenues for Xbox Game Pass or gaming revenue growth, particularly on mobile devices, a key reason behind its acquisition of Activision Blizzard. The publisher’s range includes mobile games such as Mobile Call of Duty, candy crushand Immortal Devil. A new Xbox mobile game store could be launched this year, and Microsoft is banking on the EU Digital Markets Act, which forces Apple and Google to change the way they distribute apps on mobile devices and ultimately open their platforms and stores to the competition.
But Apple’s surprising new plan to comply with the European Union’s latest technology regulations has left Microsoft and others frustrated. “Apple’s new policy is a step in the wrong direction,” Bond said in reaction to Apple’s proposals last month. Spencer had previously described the Xbox mobile store and the EU Digital Markets Act as a “huge opportunity” for Microsoft.
All of this means that adding a bunch of games to the Switch and PS5 won’t necessarily help Microsoft’s growing ambitions for Xbox. That’s why I suspect Microsoft might need to give more details about its future vision for the hardware.
Microsoft held an internal town hall for Xbox employees last week where Microsoft Gaming CEO Phil Spencer, head of Xbox game studios Matt Booty, and Xbox president Sarah Bond addressed employees. employees. shannon lyao first details reported from the city council.
While Xbox executives assured employees that Xbox hardware would continue, they didn’t directly address the elephant in the room: those persistent rumors about Xbox exclusives coming to Nintendo Switch and PS5.
Even rumors of the move shook Xbox fans with fear that Microsoft would eventually scrap the Xbox console hardware, render Xbox’s digital libraries useless, and simply release games on rival platforms. But after more than 20 years of Xbox hardware, it seems inconceivable that Microsoft would suddenly move away from the device ecosystem that powers its Xbox platform and its revenue. Instead, I suspect Microsoft will have a vision that will distract from a few select Xbox games heading to rival platforms.
There are rumors about an Xbox handheld, with Windows Center‘s Jez Corden claiming Earlier this month, “Xbox literally greenlit several new hardware projects in recent weeks.” Days later, Corden There was speculation about a possible Xbox handheld., and Spencer liked a post on X that described the handheld as “inevitable.” Microsoft has a habit of teasing future hardware: at E3 2016, announced Project Scorpiodescribing it as “the most powerful console ever created” before launching 18 months later as the Xbox One
A discless Xbox Series quickly ruled out the leak like old plans, so maybe that hardware has been cancelled.
Still, without some public commitment to future hardware, Microsoft could have a problem. By gradually opening Xbox games to Nintendo Switch and PS5, this also opens up questions about how many games will be cross-platform in the future. If you can play Xbox games anywhere, including PC, cloud, Nintendo Switch, and PS5, why would you want an Xbox? That’s the big question Microsoft must answer on Thursday.