The annual E3 extravaganza isn’t all about gaming, it’s all about console gaming. Yes, there’s a PC sideshow that’s gaining in popularity and publishers like Ubisoft, Square Enix and Bethesda host press conferences showcasing games that run on a variety of platforms, but the focus is mainly on consoles. Which makes it interesting that the executive vice-president of Gaming at Microsoft, Phil Spencer, choose an E3 interview with The Verge to sketch out Microsoft’s vision of a future for Xbox that isn’t about selling consoles.
“The business isn’t how many consoles you sell.”
When asked whether Microsoft’s next-gen console, codenamed Scarlett, is coming too close on the heels of the Xbox One X, Spencer told the interviewer to think about players instead of consoles.
I don’t need to sell any specific version of the console in order for us to reach our business goals. The business isn’t how many consoles you sell. The business is how many players are playing, the games that they buy, how they play.
Spencer’s remarkable comment is a variant on the theme he talked about throughout E3: Xbox is about bringing the games players want to play to the platforms players want to play them on. Put another way, Xbox isn’t a console division that offers a service like Game Pass, it’s a service division that also sells consoles.
Does this mean Microsoft is focused on xCloud, its upcoming game streaming service, becoming "the Netflix of gaming"? I don't think so. I think Microsoft's vision for Xbox is much more all-encompassing than that.
Game Pass, xCloud and the family of Xbox consoles are components that complement each other and work hand-in-hand to accomplish what I think Microsoft has in mind. Game Pass lies at the core because it’s where the games live. A subscription not only gives you access to over 250 console and more than 100 PC games, it lets you play Microsoft exclusives and some third-party games on the day they release.
xCloud is the delivery service that lets you play all those Game Pass games wherever you are. If you’re at home with a PC or console, you can play on those if you like. If a PC or console isn’t handy, you can play on a mobile device whether you're at home or away.
The Xbox console is a platform stack (millions of players are still using the Xbox 360) that gives console players a range of performance options. Scarlett will be able to stream games to a mobile device while you're at home while the Scarlett motherboards living in Microsoft’s Azure data centers will stream games through xCloud. The Xbox One X motherboard will handle xCloud streaming until Scarlett is ready.
Microsoft’s vision
Game players tend to spend most of their time playing on one platform and if similar platforms are offered by different platform holders, players tend to favor one over the others. Platform allegiance can be so strong that some players are dismissive or actively hostile toward those who favor something different. PC players turn their nose up at console players’ relatively limited hardware. Xbox and PlayStation adherents revel in “console wars”. Everybody dismisses mobile players as not being “real gamers”.
The universe of game players is too vast and too varied to be contained within platform boundaries. Platforms have distinctive demographic profiles, but no platform encompasses the game-player profile. Boys and girls, men and women of all ages play games. Everybody plays games.
Microsoft understands this. It isn’t looking at gaming in terms of platforms, it’s looking at gaming in terms of players and games. If you think like this, the first platform you’re going to look at is mobile.
Deloitte’s most recent Digital media trends survey analyzed game players in terms of platform dominance. A player was considered platform dominant if they spent more than 50% of their gaming time on one platform. Multiplatform players divided their time among platforms spending 50% or less of their time on any single one. This is what Deloitte found.
| Platform dominance | Percent of game players |
| Mobile | 39% |
| Console | 23% |
| Multiplatform | 23% |
| PC | 15% |
Almost 40% of the gaming population spends most of their time playing on a mobile device. No other platform comes close.
Not only is mobile the platform of choice for most players, more time is spent on mobile than any other platform.
Almost half the time spent playing games is spent on mobile devices. Multiplatform players spend more time on mobile than any other platform. Mobile-dominant players are more committed to their platform than any other group although the difference between mobile and PC is unlikely to be significant. Mobile is where it’s at.
Mobile not only has the numbers, it's the target platform when people talk about streaming PC and console games to you wherever you are. With all of that going for it, you might think focusing on mobile is the smart thing to do in the current climate. It’s not the smart move for the same reason it’s not smart to focus on console or PC. The universe of game players is too vast and too diverse to be contained within platform boundaries. Too many players are left out if you focus on any segment of the gaming population. Microsoft understands this.
Microsoft has a platform with Xbox but it doesn't need to focus on dominating the console space. It has a streaming service with xCloud but it doesn't need to focus on becoming the Netflix of video games. It has Game Pass and a growing family of in-house game developers but it doesn't have to be the dominant game publisher. Microsoft wants to have a substantial presence in all these arenas. It wants to serve your needs whoever you are, whatever you like to play, however you like to play it. To accomplish this, Microsoft needs to be there for you, it doesn't need to be the only one that's there for you.
Why is Microsoft focusing on all these things instead of zeroing in and dominating one of them? Because it can. Microsoft has a deep stack of Xbox consoles capped by the most powerful console currently available. It has the Windows operating system that utterly dominates PC gaming. It has a world-wide network of Azure data centers to host its streaming service. It has games galore with Game Pass which many have called the best deal in gaming. And it has deep pockets. Nobody else in gaming has the diverse set of assets that Microsoft can bring to the table. Microsoft’s vision is all-encompassing because it—and possibly it alone—has the capability to fulfill that vision.
