Microsoft is preparing to take Xbox everywhere

Microsoft’s Xbox business needs to get bigger. Sales of the company’s Xbox Series S and He admitted that 2022 is a dry year for Xbox games after Microsoft’s big Bethesda exclusive Starfield was delayed.

A delay in Xbox Game Pass could be the reason I’m hearing of a number of Xbox exclusives coming to consoles that Microsoft usually competes with. This is what sources familiar with Microsoft’s plans say The edge that the company is getting ready to launch a select number of Xbox games on PS5 and Nintendo Switch. Weeks of rumors suggest so HiFi rush, Sea of ​​thievesand even Bethesda titles like Starfield And Indiana Jones may appear on non-Xbox platforms.

The first two games to be released on competing consoles are as well HiFi rush And Pentiment, sources said. Microsoft is also currently planning to launch Sea of ​​thieves later this year on non-Xbox platforms, with other first-party titles also being considered.

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Launching Xbox games on PlayStation or Nintendo Switch is a seismic shift in strategy, and not one that Microsoft will have taken lightly. It gives 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 passed Windows in terms of revenue, thanks to the acquisition of Activision Blizzard. That massive $68.7 billion acquisition will put Microsoft to the test, especially when you consider that Duty is a major multiplatform game that generates significant revenue on these platforms and mobile. That delay in Game Pass will also be part of the reason why Microsoft is even considering more multiplatform games.

In May 2022, Microsoft set 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 seemed that it would continue to grow rapidly amid Microsoft’s device-agnostic focus on consoles, PCs and cloud gaming.

Then Xbox Game Pass started to glitch. Starfield And Redfallthat were going to be major Xbox exclusives were pushed back from a 2022 release to 2023, with Starfield An important holiday window is missing.

“It feels like we will likely experience a gap of almost 16 months between major exclusive launches on our platform,” Microsoft Gaming CEO Phil Spencer said in an internal email to Xbox leaders in May 2022, revealed in the FTC v. Microsoft case. “This is really a disaster situation for us, given everything we have invested in the content of our studios [Game Pass] content fund.”

In the months since, Microsoft hasn’t provided any subscriber updates 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 that Microsoft only has around 33 million subscribers.

If correct, that is a 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 dropped Xbox Game Pass growth as a target for Satya Nadella’s compensation last year, after first exceeding ambitious internal Game Pass goals in 2020 and then failing to meet compensation targets two years in a row.

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Microsoft has instead focused more on PC Game Pass growth over the past year and has scaled back some of its Xbox Cloud Gaming subscriptions. The combination of Xbox Series S, the effective $299 Game Pass console and cloud gaming should power a large portion of the 100 million Game Pass members leaked in the US. FTC v. Microsoft materials, but sales of Microsoft’s latest consoles won’t get the company there alone.

Microsoft has been looking at other opportunities for Xbox Game Pass or gaming revenue growth, especially on mobile – a key reason behind the Activision Blizzard acquisition. The publisher’s lineup includes mobile games such as Call of Duty mobile, Candy CrushAnd Diablo Immortal. A new Xbox store for mobile games could be launched this year, with Microsoft relying on the EU’s Digital Markets Act and forcing Apple and Google to change the way they distribute apps on mobile devices, and ultimately their platforms and open stores to competition.

But Apple’s surprising new plan to comply with the European Union’s latest tech regulations has left Microsoft and others frustrated. “Apple’s new policy is a step in the wrong direction,” Bond said last month in response to Apple’s proposals. Spencer had previously described the Xbox mobile store and the EU’s 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 big ambitions for the Xbox. That’s why I suspect Microsoft may need to tease more of its future hardware vision.

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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 all addressed employees. Shannon Liao first reported details from the town hall.

While Xbox executives reassured their employees that the Xbox hardware would continue, they didn’t directly address the elephant in the room: the persistent rumors of Xbox exclusives coming to the Nintendo Switch and PS5.

Even the rumors of this move left Xbox fans concerned that Microsoft would eventually scrap Xbox console hardware, render Xbox digital libraries useless, and only publish games on competing platforms. But after more than two decades of Xbox hardware, it seems inconceivable that Microsoft would suddenly walk away from the device ecosystem that powers its Xbox platform and revenue. Instead, I suspect Microsoft will have a vision that distracts from some select Xbox games heading to competing platforms.

There are whispers of an Xbox handheld, with Windows Central‘S Jez Corden claims earlier this month that “Xbox has literally greenlit several new hardware projects in recent weeks.” Days later, Corden speculated about a possible Xbox handheld, and Spencer liked a post on X describing the handheld as “inevitable.” Microsoft has a habit of teasing future hardware: at E3 2016 it announced Project Scorpio and described it as “the most powerful console ever” before releasing it 18 months later as the Xbox One

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A discless Xbox Series X refresh and new Xbox controller leaked last year and they could still arrive, but Spencer The leak was resolved fairly quickly as old plans, so maybe that hardware was canceled.

Either way, without any public involvement in future hardware, Microsoft could be in trouble. Gradually opening up Xbox games to Nintendo Switch and PS5 also raises questions about how many games will be multiplatform in the future. If you can play Xbox games anywhere – including PC, the cloud, the Nintendo Switch and the PS5 – why would you want an Xbox? That is the big question that Microsoft must answer on Thursday.

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