For much of this console cycle, Microsoft has watched as its Xbox One has been handily outsold by Sony's PlayStation 4. While the PS4 has already been bought well over 40 million times, Microsoft has long since stopped even issuing hardware sales figures. After botched messaging at the outset around DRM and always-on policies (which Sony PR quickly capitalized on), it became clear that Microsoft would need to alter its strategy and mindset. In an interview with Australian outlet Stevivor, Xbox head Phil Spencer candidly acknowledged that the team led by Don Mattrick at the time was shooting for 200 million units sold. The problem, Spencer admitted, is that Microsoft for the longest time viewed Xbox as a trojan horse to get into and dominate people's living rooms instead of treating games as the focal point.
"The goal that the team had was to figure out how could we sell 200 million game consoles," he said. "We've never seen a console sell that many units. The biggest individual console, the PS2, did 120 million or something like that. The approach the team took was people are moving to OTT Video Services [over-the-top, like Netflix and Stan] and television's getting disrupted - and if we could build a console that could be at the center of this transition and really embrace not only people playing video games, but also people with the changing habits in television, you really take the console market and the gaming market and you expand it potentially."
He continued, "... I've been on the Xbox since we launched the original Xbox. I've played video games my whole life. I still play video games all the time. That's what I do. When we came in after two-and-a-half years ago and started running the Xbox program, I centred us back on not trying to become something other than a game console. You don't earn the right to be relevant in other categories of usage for the console until you've earned the gaming right, so let's go make sure that's what we deliver."
"The idea that video games are a category that Microsoft should go be in a whole number level, full support, it only happened a number of years ago"
One of the first things Spencer did was to unbundle the Kinect from Xbox One. A number of people simply didn't use it, so why force it on consumers? More recently, Spencer has pushed initiatives like the indie movement with ID@Xbox, the Xbox Game Preview program and the Xbox Play Anywhere label that gives consumers dual ownership of titles across Xbox and Windows 10. He noted that these are all signs of an internal shift at Microsoft and how it perceives video games as a business unto its own that's worth investing in.
"I think that this has been a transformation in the company as well," Spencer said. "The idea that video games are a category that Microsoft should go be in a whole number level, full support, it only happened a number of years ago. We started Xbox because we were worried about the living room; Xbox became 'how do you shore up computing in the living room?' The people who were building it were clearly building for a video game console, but I'd say the company's focus was a little more broad than that.
"Today, if you sit down with Satya Nadella, the CEO, Amy Hood, the CFO of the company, they will talk about gaming as a core capability of Microsoft, not gaming as a bridge to somethings else, but gaming into itself. It's not just Microsoft, you see Google investing time in gaming, you see Facebook buying Oculus, you see Amazon buying Twitch, you see multi-billion dollar transactions going on at the gaming space, not so you can go be something else, but because gaming is a very high engagement, high monetization use on any electronic device that you see."