"We’ll definitely do more consoles in the future, and other devices." Xbox lead Phil Spencer says more consoles are coming after Xbox Series X|S.

It says a lot to me that the ad campaign is at all controversial. In a lot of ways I think some console gamers are more partially out of touch with reality. No one is selling that many consoles, yet gaming is the biggest entertainment industry with 3 billion+ consumers. There's no major projected growth in the console market period yet the gaming industry is on a steep upward trajectory. Put plainly, Xbox isn't targeting an ad telling people they engage with Xbox in a variety of ways at existing console users. They're trying to pull in non console gamers who the ENTIRE console market has been unable to sell a console to by telling them Xbox has expanded as a brand and ecosystem, and they are better able to accommodate and meet non console gamers where they are. Even then the idea that console gamers can be mad at the ability to access their library with cloud saves (in some cases at no extra cost like on PC; in others through a GPU sub for cloud) across platforms is ludicrous to me. The comments on the YouTube ad 1) show a fan base that is far too overly confused. In part I would say it's on Microsoft and Xbox to be doing a better job with clear marketing and messaging. However, it also 2) shows a really toxic and stubborn console market (at least in terms of the loudest vocal groups on social media). In a lot of ways I blame the console wars. A bid from both companies to boost gamers by turning them against each other. Overall how the market has chosen to compete and present itself, hasn't led to the best outcome in a lot of ways. It's all some really weird negative machine. When you look at headlines it's all "Xbox is killing themselves" or "Xbox doesn't know what an Xbox is" and so on. There's anger even on the journalistic side (well... quote un quote) and clear confusion on how to gauge success on any basis other than the traditional exclusives and console sales. But that's the thing. Exclusives historically haven't done much to grow the market as a whole (really just convince some tens of millions of gamers to change hands) and consoles never really sold that much. The reality is, no Xbox isn't losing gamers or sales by expanding with Cloud, PC, and soon to be mobile platforms for their ecosystem. The Xbox console active user base is higher than ever due to how sticky the Xbox One is and Series sales are doing about as well as Xbox always has. Xbox's expansion is bringing in new gamers who never would have bought a console otherwise. And it's working. They're reporting far more active users and engagement overall and pulling in more money as well.

In business speak it's very clear what is happening with Xbox. The Xbox console has largely reached maturity and isn't seeing major growth. Beyond that the entire console market has largely maturity and isn't seeing growth. And frankly it's not at a huge number. Xbox and Sony and Nintendo can report more monthly active users than and higher engagement than ever due to longer cross generational support and live service games. In such ways they are also making more money off each individual console gamer on their platform. However, they are still servicing the same consumer base as they did decades ago with ultimately marginal increases. Even the Nintendo Switch, the current most popular console, hasn't seen a skyrocketed user base. It's far greater than they've had before (though it's also hard to tell by just how much as they've essentially brought their DS and home console users to one device). The cold hard truth is that no console has surpassed the Ps2 in terms of lifetime sales. The PS2 only sold like 155 million units. That's kinda bad when you put it into perspective and even considering that there's more consoles now, so more spread out purchasing, sales should in theory be far far more than that for individual consoles with 8 year lifetimes after nearly 20 years. Yet somehow the PS4 sold less than 120 million and the Xbox One leas than 60 million... combined that's not even 200 million. In 8 years both consoles couldn't even crack a combined 200 million units sold. For whatever reason (I can speculate but it doesn't matter), home consoles were never able to take off. And they show no sign of doing so. In comparison, there's over a billion PC gamers. Active PC gamers. There's multiple billions of active mobile gamers. But I'm not even sure total active console gamers across all platforms is at 500 million.

Now none of this is to say the console market is at any risk to disappear in the future and there was an article about this a while ago on this site, but Xbox does need to be aware and avoid becoming a jack of all trades but no gamers platform of choice anywhere. They certainly need to invest equally across platforms. While Xbox console sales don't look that great on paper, it's active console user base is bringing in over 10 billion in revenue annually (that's a conservative estimate based on Xbox's avgerage of 15 billion prior to Zenimax). And there is still merit in marginally growing it. That's not money any sane business person would throw away, but no same business person would also solely focus their efforts on a single market in their wider industry when they aren't really growing there anymore. Xbox is expanding, not shrinking. This does put more pressure on them to not just have a large content library and wide breadth of developers, but have a lot of teams for each of their platforms and constantly do their best to innovate and stay (or become) a competitive option each market.

At this point I think Xbox should just break it down in a fireside chat of some sort. Gamers and journalists are painting whatever picture they want regardless of reality. Saying Xbox is going to keep making consoles or that they have more active console users or even that putting a game like Sea of Thieves on PlayStation increased console engagement on Xbox in interviews here or there isn't shifting the loudest vocal groups opinion and that's probably really hurting their expansion plans when Xbox gamers act like that online. Heck, when gaming journalists fuel that fear. If I were in Xbox marketing I'd do some fireside chat or ad where it's explained and clearly laid out like gamers are five. Part of the issue is in the shareholder earnings call and overall report which gamers still don't realize isn't to them or Xbox at all. Microsoft has always been massive and one of the biggest companies. They don't want to show any weakness and frankly, I don't think any console's would look particularly strong with raw numbers to Microsoft shareholders. For example Apple can report nearly 200m new iPhone units sold in a new model's first quarter. How would Microsoft look if (using the switch for example) they reported less than 160 million units sold in about 8 years? Shareholders were already calling for Microsoft to drop Xbox from its first launch. But Xbox just needs to find a way to tell it to the industry straight "We make over 10 billion off of Xbox console gamers. That's a lot of money. We like money, so we will never do anything to stop supporting those customers and we will always strive to have a competitive console that offers the best value to console gamers. However, the console market isn't projected to grow and looking at our competitors we don't see them growing either. The thing is like all for profit businesses we want more money. So we decided to massively expand what it means to game on Xbox and where that happens. We hope to reach new customers who never would have bought a console otherwise and to make more money than ever." just lay it out clear simple. Sometimes people need to hear the business no nonsense version.

What surprises me is all the angst over MS talking about people playing their games on other platforms. (Ad not even other consoles, at that. Just devices people already own.) What is the harm in convincing Samsung TV and Fire TV owners to try out the ecosystem at essentially zero cost? What is so freaking offensive about promoting cloud gaming?

If we are seeing big asian publishers struggling to make profits on Playstation's 60M boxes why be shocked that MS wants to reach a bigger community than than the 40-50M active XBOX players?

The ad campaign isn't targeted at console gamers anyway. If you have a console you already know about Game Pass and cloud gaming. It is targeted at potential, future console gamers. Much like the series S but this time to people who find even $299 a barrier to adoption. And the message is they already have access to the XBOX ecosystem. All they have to do is try it.

It doesn't take much analysis to see they are reaching out to phone and tablet gamers to convince them to try TV gaming, using cloud as a hook to get them to try games they can't get on mobile in the hope they consider a console next.

All the griping is uncalled for.

Lurking_Lurker_Lurks said:

It says a lot to me that the ad campaign is at all controversial. In a lot of ways I think some console gamers are more partially out of touch with reality. No one is selling that many consoles, yet gaming is the biggest entertainment industry with 3 billion+ consumers. There's no major projected growth in the console market period yet the gaming industry is on a steep upward trajectory. Put plainly, Xbox isn't targeting an ad telling people they engage with Xbox in a variety of ways at existing console users. They're trying to pull in non console gamers who the ENTIRE console market has been unable to sell a console to by telling them Xbox has expanded as a brand and ecosystem, and they are better able to accommodate and meet non console gamers where they are. Even then the idea that console gamers can be mad at the ability to access their library with cloud saves (in some cases at no extra cost like on PC; in others through a GPU sub for cloud) across platforms is ludicrous to me. The comments on the YouTube ad 1) show a fan base that is far too overly confused. In part I would say it's on Microsoft and Xbox to be doing a better job with clear marketing and messaging. However, it also 2) shows a really toxic and stubborn console market (at least in terms of the loudest vocal groups on social media). In a lot of ways I blame the console wars. A bid from both companies to boost gamers by turning them against each other. Overall how the market has chosen to compete and present itself, hasn't led to the best outcome in a lot of ways. It's all some really weird negative machine. When you look at headlines it's all "Xbox is killing themselves" or "Xbox doesn't know what an Xbox is" and so on. There's anger even on the journalistic side (well... quote un quote) and clear confusion on how to gauge success on any basis other than the traditional exclusives and console sales. But that's the thing. Exclusives historically haven't done much to grow the market as a whole (really just convince some tens of millions of gamers to change hands) and consoles never really sold that much. The reality is, no Xbox isn't losing gamers or sales by expanding with Cloud, PC, and soon to be mobile platforms for their ecosystem. The Xbox console active user base is higher than ever due to how sticky the Xbox One is and Series sales are doing about as well as Xbox always has. Xbox's expansion is bringing in new gamers who never would have bought a console otherwise. And it's working. They're reporting far more active users and engagement overall and pulling in more money as well.

In business speak it's very clear what is happening with Xbox. The Xbox console has largely reached maturity and isn't seeing major growth. Beyond that the entire console market has largely maturity and isn't seeing growth. And frankly it's not at a huge number. Xbox and Sony and Nintendo can report more monthly active users than and higher engagement than ever due to longer cross generational support and live service games. In such ways they are also making more money off each individual console gamer on their platform. However, they are still servicing the same consumer base as they did decades ago with ultimately marginal increases. Even the Nintendo Switch, the current most popular console, hasn't seen a skyrocketed user base. It's far greater than they've had before (though it's also hard to tell by just how much as they've essentially brought their DS and home console users to one device). The cold hard truth is that no console has surpassed the Ps2 in terms of lifetime sales. The PS2 only sold like 155 million units. That's kinda bad when you put it into perspective and even considering that there's more consoles now, so more spread out purchasing, sales should in theory be far far more than that for individual consoles with 8 year lifetimes after nearly 20 years. Yet somehow the PS4 sold less than 120 million and the Xbox One leas than 60 million... combined that's not even 200 million. In 8 years both consoles couldn't even crack a combined 200 million units sold. For whatever reason (I can speculate but it doesn't matter), home consoles were never able to take off. And they show no sign of doing so. In comparison, there's over a billion PC gamers. Active PC gamers. There's multiple billions of active mobile gamers. But I'm not even sure total active console gamers across all platforms is at 500 million.

Now none of this is to say the console market is at any risk to disappear in the future and there was an article about this a while ago on this site, but Xbox does need to be aware and avoid becoming a jack of all trades but no gamers platform of choice anywhere. They certainly need to invest equally across platforms. While Xbox console sales don't look that great on paper, it's active console user base is bringing in over 10 billion in revenue annually (that's a conservative estimate based on Xbox's avgerage of 15 billion prior to Zenimax). And there is still merit in marginally growing it. That's not money any sane business person would throw away, but no same business person would also solely focus their efforts on a single market in their wider industry when they aren't really growing there anymore. Xbox is expanding, not shrinking. This does put more pressure on them to not just have a large content library and wide breadth of developers, but have a lot of teams for each of their platforms and constantly do their best to innovate and stay (or become) a competitive option each market.

At this point I think Xbox should just break it down in a fireside chat of some sort. Gamers and journalists are painting whatever picture they want regardless of reality. Saying Xbox is going to keep making consoles or that they have more active console users or even that putting a game like Sea of Thieves on PlayStation increased console engagement on Xbox in interviews here or there isn't shifting the loudest vocal groups opinion and that's probably really hurting their expansion plans when Xbox gamers act like that online. Heck, when gaming journalists fuel that fear. If I were in Xbox marketing I'd do some fireside chat or ad where it's explained and clearly laid out like gamers are five. Part of the issue is in the shareholder earnings call and overall report which gamers still don't realize isn't to them or Xbox at all. Microsoft has always been massive and one of the biggest companies. They don't want to show any weakness and frankly, I don't think any console's would look particularly strong with raw numbers to Microsoft shareholders. For example Apple can report nearly 200m new iPhone units sold in a new model's first quarter. How would Microsoft look if (using the switch for example) they reported less than 160 million units sold in about 8 years? Shareholders were already calling for Microsoft to drop Xbox from its first launch. But Xbox just needs to find a way to tell it to the industry straight "We make over 10 billion off of Xbox console gamers. That's a lot of money. We like money, so we will never do anything to stop supporting those customers and we will always strive to have a competitive console that offers the best value to console gamers. However, the console market isn't projected to grow and looking at our competitors we don't see them growing either. The thing is like all for profit businesses we want more money. So we decided to massively expand what it means to game on Xbox and where that happens. We hope to reach new customers who never would have bought a console otherwise and to make more money than ever." just lay it out clear simple. Sometimes people need to hear the business no nonsense version.

I certainly did not expect an essay in our comments section, haha, but I did read all of this. I agree with a lot of what you said. Xbox's single biggest obstacle right now is messaging and open communication. Xbox as a platform is very healthy right now, but Microsoft as a company is struggling to align its legacy, hardcore community that made Xbox what it is today with the future of what Xbox can be down the road. It's obvious from an outside perspective that consoles can't thrive on their own anymore. Sony and (to a lesser extent) Nintendo both realize this, too, but Xbox is ahead of the curve and it's being punished by its fans because of that?

I'm optimistic about Xbox's future, but I don't think it's wrong to be cautious as a consumer, either. Xbox's lack of transparency in some areas is reason to doubt your investment. I've put so much of my money and time into the Xbox console, it's not unreasonable to question if Microsoft may abandon my investment in seek of larger profit margins in the future, just like Microsoft has abandoned so many other projects. Like most things, it's never black and white. Microsoft has to find the sweet spot between forging a new path for Xbox as an ecosystem rather than a console and bringing the millions of loyal Xbox fans that made the ecosystem a possibility in the first place with it. That means proving commitment to consoles and improving messaging across the board.

As an unrelated side note, console game exclusives are dumb. Broadly speaking.

fjtorres5591 said:

What surprises me is all the angst over MS talking about people playing their games on other platforms. (Ad not even other consoles, at that. Just devices people already own.) What is the harm in convincing Samsung TV and Fire TV owners to try out the ecosystem at essentially zero cost? What is so freaking offensive about promoting cloud gaming?

If we are seeing big asian publishers struggling to make profits on Playstation's 60M boxes why be shocked that MS wants to reach a bigger community than than the 40-50M active XBOX players?

The ad campaign isn't targeted at console gamers anyway. If you have a console you already know about Game Pass and cloud gaming. It is targeted at potential, future console gamers. Much like the series S but this time to people who find even $299 a barrier to adoption. And the message is they already have access to the XBOX ecosystem. All they have to do is try it.

It doesn't take much analysis to see they are reaching out to phone and tablet gamers to convince them to try TV gaming, using cloud as a hook to get them to try games they can't get on mobile in the hope they consider a console next.

All the griping is uncalled for.

I wouldn't say the griping is entirely uncalled for. Those who have spent years and/or thousands of dollars on the Xbox console platform have a right to be concerned for their investments. It's up to Xbox to prove it values its console players in addition to its attempts to bring in new audiences.

I agree that many people can be a lot more open minded about this, though.