As we’re quickly getting close to the beginning of a new console generation, Microsoft is already getting ready for a world where consoles or powerful gaming PCs are no longer necessary to play the next big games. This seems to be the main message that the Redmond giant wanted to give to select journalists visiting the company’s gaming headquarters last week, as reported by Geekwire.
As you may know, Microsoft is reportedly working on two next-gen consoles to be released next year, and an official announcement could be made at E3 2019 according to recent report from Thurrott.com. Gaming consoles will probably remain the most affordable and efficient way to play demanding video games for quite some time, but Microsoft and probably many other tech giants are already looking at a market of 2 billion gamers market worldwide, according to the company’s estimations.
“We know we aren’t going to sell 2 billion consoles, and there are a lot of markets around the world where a console is not necessarily part of the lifestyle,” said Kareem Choudhry, corporate vice president of gaming cloud for Microsoft. Sony is now close to 100 million PlayStation 4 consoles sold since 2013, which is probably far more than Xbox One sales. Microsoft stopped reporting consoles sales years ago to focus on Xbox Live engagement, and probably for good reason: with razor-thin margins and consoles, the business of selling games and now subscription services is a much more profitable one.
“That is not where you make money,” Spencer said of consoles to Geekwire. “The business inside of games is really selling games, and selling access to games and content in means like that is the fundamental business. So if you open it up, the more often people can play, the more they’re enjoying the art form. It increases the size of the business.”
This is pretty much Microsoft and the Xbox team are now focused on bringing services like Xbox Game Pass to all platforms, including the Nintendo Switch. “We want to bring Game Pass to any device that somebody wants to play on,” Spencer said. “Not just because it’s our business, but really because the business model allows for people to consume and find games that they wouldn’t have played in any other space.”
It’s still not exactly clear how Microsoft intends to bring Xbox Game Pass to any device, but that’s where the company’s Project xCloud streaming platform will likely play a big part. Publics trials are still expected to begin later this year, but the Xbox team is still mum about pricing details or synergies with existing subscription services.
Microsoft isn’t the only company interested in creating a true Netflix of video games. Google, Apple, Amazon, and even the US carrier Verizon are all planning similar initiatives, but Xbox head Phil Spencer believes that Microsoft’s cloud expertise with Azure won’t be the company’s only advantage during that new platform war.
“This team has been in the video game business for some of them three decades. And we’ve been building games for many years,” Spencer said. “We’ve been partners to the video game companies for years and years. For many of our publishing partners, we’re one of their top global retail partners in them selling games. Video games is not a business that you come into quickly, and there is a form to building games. There are relationships that are built,” the exec continued.
It's good to see the Xbox team being confident about the future, but 2019 is already looking to be a very exciting year for the video games industry. After the groundbreaking progress we've made on crossplay multiplayer last year, it seems that platform holders are now preparing for a world where you can play your favorite games any time on any device. That doesn't necessarily mean the end of the console wars, but it seems more and more that the heart of the competition will soon shift to the subscription services space.