It’s become clear over the last couple of years that Microsoft’s priorities in the gaming market have shifted radically, and will continue to shift further still as time passes. No longer concerned with how many hardware units they sell, they are now much more focused on creating a larger ecosystem that attracts subscribers instead of hardware purchases- subscribers that they hope to keep around through services like Game Pass and xCloud.
As such, their priorities are largely different than traditional gaming companies like Nintendo and Sony, who are still focused first and foremost on selling consoles more than anything else. As per head of Xbox Phil Spencer, in fact, Nintendo and Sony are, because of that very reason, no longer Microsoft and Xbox’s main competition. They now view the likes of Amazon – who’re gearing up to enter the streaming space – and Google – who’ve already done so with Stadia – as their main competitors.
“When you talk about Nintendo and Sony, we have a ton of respect for them, but we see Amazon and Google as the main competitors going forward,” Spencer said while speaking with Protocol. “That’s not to disrespect Nintendo and Sony, but the traditional gaming companies are somewhat out of position. I guess they could try to re-create Azure, but we’ve invested tens of billions of dollars in cloud over the years.”
According to Spencer, competing with Nintendo and Sony over “format wars” makes no sense, when the likes of Google and Amazon are going for a much larger marketshare of potentially billions of gamers.
“I don’t want to be in a fight over format wars with those guys while Amazon and Google are focusing on how to get gaming to 7 billion people around the world,” he said. “Ultimately, that’s the goal.”
Such an outlook might have seemed a bit too out there about a decade ago, but in recent years, it’s become clear that Microsoft’s strategy is one that makes a lot of sense for them. Creating an ecosystem that doesn’t restrict is playerbase on the basis of hardware exclusivity means that Microsoft can target a much larger audience, and if they can keep delivering the goods with the likes of Game Pass and xCloud, while also offering new traditional consoles to those who still prefer that, they’ll be ensuring a successful future for themselves.