Phil Spencer is talking again, and this time, Xbox fans might have something to be excited about for once.
In a new interview with Polygon, Phil revealed that he’s interested in bringing other storefronts to Xbox, in the same way that Windows is an open platform for multiple marketplaces. Phil’s interviewer, Polygon EIC Chris Plante, named Epic Games Store and itchio, but of course, there are other storefronts than that, such as Steam, and GOG.
Phil explains his openness stems from a change in how the video game business operates, on a fundamental level. In Phil’s words:
“Moore’s Law has slowed down. The price of the components of a console aren’t coming down as fast as they have in previous generations.”
Because of this change, game companies like Sony and Microsoft, who sell hardware at a loss, can’t afford to subsidize their consoles anymore. Nintendo technically operates on a similar business model, but because they use older, weaker components for their console, they do not sell their consoles at a loss, or at least the loss is comparatively low.
All three console companies have to reckon with the knowledge that the console business has been flat for a long time. This means, while the consoles continue to be a viable business, they are no longer really finding new buyers. It’s the same PlayStation, Xbox, and Nintendo fans buying consoles generation after generation. Younger gamers really are used to playing on smartphones and tablets now.
For Microsoft, the idea of subsidizing the console doesn’t make business sense anymore, and that’s why they’re looking at new ways of making money. That is the rationalize for bringing four of the games made by Microsoft owned studios to their rival platforms in the PlayStation 5 and Nintendo Switch.
Now that decision, of course, is a dangerous game, as it compromises their reputation with their loyal Xbox fans. But this new idea of Phil’s could win them back.
Phil leans on his comparison of Xbox’s business to PC gaming, saying:
“[Consider] our history as the Windows company. Nobody would blink twice if I said, ‘Hey, when you’re using a PC, you get to decide the type of experience you have [by picking where to buy games]. There’s real value in that.”
If Xbox was closer to a PC, that you could play the games you owned on Steam, Epic Game Store, or itchio, on an Xbox, that would be immediate added value to Xbox owners. Of course, they won’t have to rebuy those games, and playing on a console is so convenient.
There seem to be a hundred things that could get in the way of this idea. For example, on a technical level, how will these PC games run on a console OS? How do you convince multiple retailers to all play nice on your platform? And is this something which Xbox owners have to pay more for?
But it’s definitely exciting that Phil is even just talking about this. The idea could sink or swim, depending on how things play out. But even if Phil isn’t able to make it work, his openness means that he will try any other crazy ideas too. He was just talking about making an Xbox handheld, so who knows? Maybe he’ll find some new opportunity that we haven’t even thought about yet.
