Microsoft may be facing a fight against a bigger titan than it has ever faced before in the gaming market.
In 2010, Nintendo’s late President Satoru Iwata told internal company executives that it wasn’t PlayStation or Xbox they needed to worry about- it was Apple that was the “enemy of the future“. This was back in an era when the iPhone and iPod Touch had seen a meteoric rise, and they were steadily beginning to encroach on Nintendo’s blue ocean audience, by offering a bevy of easily accessible and cheap entertainment options- including games.
Mr. Iwata ended up being extremely correct, because for the better part of the next decade, Nintendo would end up struggling as it sought to remake itself in a post-iPhone world. Eventually, the Switch would bring the company back to a position of strength, after Nintendo ended up imbibing the lessons of how entertainment is consumed in a post-smartphone and tablet world.
The reason I bring this all up is that the idea of a gaming company having to fight a war with a bigger than traditionally assumed foe is neither new nor alien. As the Nintendo anecdote illustrates, we have seen this happen before once. And now, I feel, we may be seeing Microsoft gearing up to do the same- not with Apple, whose influence on the core gaming market ended up ebbing eventually, but rather, Google, and others who would follow in their wake. Specifically, it seems like Microsoft is now prepared for a world in which gaming platforms and gaming hardware are no longer synonymous as they once were. A “platform” becomes nebulous, almost intangible, nothing more than your login ID to access your games library; games that you can then play anywhere.
That is the ultimate promise of Stadia, Google’s cloud streaming platform, and the promise of Microsoft with xCloud, after all: play anywhere. Don’t want to spend $500 on the newest top of the line console, or the new graphics card from Nvidia? You don’t have to, and you can still play the newest Assassin’s Creed.
Moving towards a play anywhere future is something Microsoft has already been doing for the last few years, long before xCloud was ever announced. From making their games available on PC, to their ambitious cross-buy program, to extending their games to Nintendo Switch, to making services like Xbox Live available across multiple hardware platforms, to cross-platform play, to, most recently, embracing multiple PC storefronts such as GOG Galaxy and Steam, in addition to their own, Microsoft doesn’t seem to care as much anymore whether or not you buy an Xbox- just that you buy their games, and that you use Xbox Live to login to play whatever games you do end up playing.
So yes, moving to a “post-console future” so to say is something Microsoft has been preparing for for quite a while now. To be very clear, this is not one of those articles that comes out every few years declaring the death of console gaming, at the hands of mobile, or social gaming, or now cloud gaming (the newest trend financial analysts have latched on to). I will state this in no uncertain terms: console gaming is not going anywhere. Even if cloud gaming takes off, consoles will continue to be a sizable and healthy market for years to come.
I am also not saying that Microsoft is preparing to stop making consoles. In fact, Microsoft and the charismatic Xbox boss Phil Spencer have gone out of their way to specify that Microsoft remains committed to making consoles, and that they don’t see cloud gaming ever displacing console gaming entirely (which is a very sensible stance to take). Microsoft will continue making consoles, in fact they reportedly have four of them in development right now. So this isn’t an article saying that either.
But Microsoft making their own hardware doesn’t mean they keep their software exclusive to it. They make Surfaces, which are among the best portable PCs on the market, and yet you can get Windows on any PC from Dell, HP, Asus, and so on. Microsoft makes Xbox, but Xbox Live, as well as their games, are available on non-Xbox hardware too- PC, iOS, Android, Nintendo Switch, and in the case of Minecraft, even PlayStation. Even when Microsoft used to make Windows Phone mobiles, software like Office was not exclusive to them, and they used to put out iOS and Android versions too.
So yes, Microsoft will continue to make consoles (like the upcoming Project Scarlett), and they will presumably be fantastic, like the Xbox One S and Xbox One X are. But at the same time, they won’t be the only way to play Xbox games. You can of course buy them to play Xbox games, especially if you are an enthusiast who values fidelity and instant response more than anything else.
But the console market does ultimately have a cap. We don’t know what that cap is, we know it’s more than a few hundred million units, but it exists. There are people out there who will never buy an Xbox or PlayStation or even a Switch, but these people do own a PC or a tablet or a phone or a TV, and those are people that Google is trying to reach with the Stadia, and that Microsoft is also fighting for with the xCloud.
Because, it comes down to something I have said before- Microsoft is a services company. Its aim is to get as many people in the Microsoft services ecosystem as possible. Xbox Live is a Microsoft service- to Microsoft, it doesn’t matter if you log in to Xbox Live from your Xbox One X, or a Windows PC, or your iPhone, or your Switch. Of course, they make the most money when you get an Xbox- but they will just as happily take the person who logged into Xbox Live because they played Minecraft on their iPhone, because even that is better than not having that person engage with Microsoft products or services at all.
That’s a larger battle. And sure, PlayStation will also want to fight that battle, and by priming services such as Remote Play and PlayStation Now, they too are preparing for that future and eventuality. But the company that most poses a threat to Microsoft in that field is Google- a company every bit as large as Microsoft, with people as talented as Microsoft’s own, a company that dominates the computing world thanks to Android and Chrome OS, a company that has beaten Microsoft’s multiple times before (in the mobile market, in the browser market). Microsoft is right to treat Google as the big competitor, and if they are smart, that is exactly what they are doing.
Google of course isn’t invincible. However, they are who Microsoft will undoubtedly have in mind as they prepare for their next ten years in the gaming industry. Sure, there is a new Xbox console coming next year, and I assume it will be great. But the reason we are getting The Master Chief Collection on PC, and that it is coming to Steam and not just the Windows Store, or the reason that Cuphead is on Switch, or that Xbox Live is on iOS and Android, the reason for all of that is that Microsoft is now prepared to fight for supremacy in the gaming market on a level they have never fought at before. Let’s just hope they don’t lose sight of the fact that, in the end, no matter the paradigm, good games come before all.
Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.