Microsoft is making big moves and Gamepass Just one piece of the puzzle. The subscription service has kept the Xbox Series X/S relevant despite a recent lack of conversation-stealing first-party exclusives, but the company appears to be eyeing the mobile space for its next big gaming push. While the PS5 is the console warrior to argue Call of Duty ExclusivityMicrosoft is positioning Apple and Google as its real rivals.
It could be a convenient pivot for unprecedented mid-antitrust scrutiny as it tries to get it $69 billion takeover of Activision Blizzard through regulators in the United States and abroad. But it’s a believable one when you consider Apple’s total revenue from gaming Both Microsoft and Nintendo were outsold last year Despite the fact that iPhone makers don’t actually make games. Here are nine interesting takeaways from recent earnings calls, regulatory filings and interviews that begin to fill in the picture of Xbox’s present and future.
Game Pass is growing a ton on PC
While Game Pass’s best library of games is on consoles, it’s actually the PC side of the service that’s building steam. Microsoft CEO Satya Nadella confirmed the company The most recent earnings call PC Game Pass subscribers are up 159 percent from a year ago. The PC version’s game library has certainly improved in recent months, but the larger install base is probably an even bigger factor. “We’re seeing incredible growth in PC which is really where we’re focusing,” Spencer said WSJ Tech Live.
Game Pass has reached its limit on consoles
Despite reaching 25 million subscribers overall, Game Pass’ overall growth is still far below Microsoft’s initial expectations. As Axios reportsThe company had targeted 73 percent growth for the year ending June 2022, and instead only reached 28 percent.
On the Xbox Series X/S, meanwhile, Spencer seems fairly confident that Game Pass will never exceed 15 percent of Microsoft’s total content and services revenue. “I don’t think it gets any bigger than that,” Spencer said on WSJ Tech Live. “At some point you’ve reached everyone on the console who wants to subscribe.”
Microsoft knows it’s overdue for a big first-party exclusive
Could be part of the reason behind Game Pass stalling on consoles Lack of major exclusives. Spencer recently admitted that they’ve been missing from the company’s lineup as a whole lately. “One thing we’ve heard loud and clear is that it’s been a long time since we’ve shipped the kind that people would say is a big first-party game,” he said. Same Brain Podcast. “We may have our excuses about Covid and other things but at the end of the day I know people invest in our platform and they want to have great games.”
At the same time, I suggested that the era of Covid-related game delays is over, at least for Microsoft first-party studios. In other words, don’t expect the 2022 Great Holiday drought to continue into next year. when Starfield And red fall Big releases like the first half of next year out for both reasons fable, Forza Motorsport 8, RecognizedAnd others are still waiting in the wings.
Rumored streaming device for TVs was slated (literally)
Project Keystone was supposed to be a dongle for TVs that would let you stream Game Pass in the living room without the need for an Xbox. It was rumored to be coming right around the corner, but Spencer confirmed that it’s actually been canceled in favor of more limited solutions from smart TV makers like Samsung. That keystone prototype He puts it on his shelf? Not going into production. “Will we do a streaming device at some point?” He said on WSJ Tech Live. “I doubt we will, but I think it’s a few years away.”
The company is serious about an Xbox Store on mobile
Microsoft has signaled its ambition to start competing in the smartphone space Earlier this year, but a recent regulatory filing in the UK laid out the plans more clearly. “[Buying Activision Blizzard] The addition of Activision Blizzard’s content will enhance Microsoft’s ability to create a next-generation game store that works across devices, including mobile,” the company said. wrote In October.
Spencer doubled down on that view on WSJ Tech Live, criticizing Apple and Google for taking less than 30 percent of in-app purchases on their platforms and arguing that the $69 billion acquisition is a play to make mobile more competitive rather than strangle it. console market. “We need to break that duopoly of only having two storefronts at major [mobile] platform,” he said. It’s unclear how the company plans to do that, but potential further acquisitions in the mobile space aren’t off the table.
The Xbox Series X and S consoles sold at a huge loss
While it’s well understood that console manufacturers often sell devices at a loss, especially at the start of a new release cycle, we never know how big those losses were. In no uncertain terms, Spencer recently beat Microsoft to battle with the Xbox Series X and S Between $100 and $200 on average.
It’s the company’s defense for charging the same 30 percent fee on Xbox that it complains about charging Apple and Google Mobile, where smartphones are sold at a profit. At the same time, it also made the Xbox Series S a huge success. The company announced during its recent earnings call that half of the $300 Xbox’s users are brand new to the ecosystem.
The price will increase in the future
Don’t expect that level of discount forever, though. While Spencer wasn’t specific, he hinted during WSJ Tech Live that Price increases are coming. “We retain the value on the console, we retain the value of the games for us and our subscriptions,” he said. “I don’t think we’re going to be able to do this forever, I think at some point we’re going to have to raise the price of some things.”
He didn’t say what those would be, but Game Pass and individual game prices seem like obvious bets. Subscription services have been across the board Recently increased their renewal costsAnd Spencer noted that the $60 price point, which Microsoft has retained halo-infinityOld and doesn’t reflect the rising cost of development or the extra time many players spend out of modern games.
Call of Duty Lives on Playstation
Microsoft has been Clearer than ever There are no plans to do so in recent weeks Call of Duty An Xbox exclusive. “It’s not a plan of, well, we’re going to bait and switch somebody where they have to play in the cloud or we’re going to pull out in two or three years. [Call of Duty]” Spencer told WSJ Tech Live. “As long as there’s a PlayStation to ship, our intention is to continue to ship. Call of Duty On PlayStation,” he said in the same vein. I liked it Minecraft Which is going to be supported on PlayStation, and said he wants to see too Call of Duty Turn on the switch in some form.
Don’t expect a Microsoft VR metaverse anytime soon
“Creating a metaverse for me that looks like a meeting room — I just found it’s not where I want to spend most of my time,” Spencer told WSJ Tech Live, despite his boss announcing a merger with Microsoft Meetings. Meta’s Horizons VR dystopia Just weeks ago. The veteran gaming executive said he thinks companies should work to perfect the 2D gaming metaverse before moving into virtual reality.