Phil Spencer just revealed something about Microsoft’s business that a lot of people clearly didn’t believe could actually be true.
As reported on Windows Central, Phil made this statement about the Xbox console business:
“Right now, we have more Xbox console users than we’ve ever had in the history of Xbox. The impact of Game Pass because I watch that, and I love Game Pass. But we also want people to be able to buy games.
So I will go back and look. What has happened with our third-party game sales? We’re up double digits every year over the last five years on Xbox consoles.”
Phil didn’t give us any numbers here, and its possible that he actually isn’t in a position to share those numbers. It would not only give us a more solid basis to gauge that success compared to other generations of Xbox, as well as other console companies and game companies. It would also just make it sound more real.
But with that statement, Phil just completely destroys a lot of the popular narratives about Xbox and the Xbox business, that even the most addicted and connected of gamers believe.
Phil has revealed they now have the most number of Xbox console users in the history of the company, and that’s even more than when they ‘won’ the seventh generation with the Xbox 360. Even if Xbox Series X|S trails the PlayStation 5 and Nintendo Switch in market share, and even if most gamers don’t speak about the Xbox Series consoles with the same reverence and passion as the Xbox 360, Microsoft is actually having their greatest success with the Xbox now.
But that’s not all. Phil credits Xbox’s success to Game Pass. We have seen so many reports of lowering numbers on Game Pass. To be fair, that news can often come up without context, without an understanding that Microsoft sees those sub numbers rise and dip regularly, and what was bad news in a week doesn’t turn out to predict a trend when seen in a number of months, or even years.
And so we also have to talk about this market trend that all gamers know, but tend to forget. The entire gaming business grew during the peak of the lockdown/quarantine phase of the pandemic, and has then seen that business contract in the last two years after that.
One of the consequences of these events is that Microsoft, as well as Sony and perhaps Nintendo most of all, saw their businesses peak, to a degree that wasn’t possible before the pandemic. So when we see news of these companies dipping in sales, that has to be compared to the industry peak.
That’s an impossible standard to match, and it also creates a misleading picture that their business is now bad. As we now know, they’re still riding that success with the subscribers they still have.
And lastly is the thing that everyone also thought was the reason Game Pass was bad. As it turns out, sales of third party games on Xbox are up over the last five years. Perhaps the truth is Game Pass introduced gamers to new games that they are now willing to buy, because they came up on rotation on Game Pass.
This certainly doesn’t change everything we know about Microsoft. No one will defend Microsoft, or Sony, Embracer, EA, Epic, etc, for the massive layoffs that happened on their watch. But Phil’s revelations should give gamers pause if they should believe everything they read on the internet without question.
