Microsoft recently revealed its final hardware specifications for Project Scorpio, and most analysts are optimistic about the console's market performance later this year, but what does the Xbox team have planned beyond Scorpio? And will Microsoft even remain focused on consoles as it pushes Xbox Live and Windows 10?
Phil Spencer, the head of Xbox, is adamant that his company remains invested in the console space. In a wide-ranging interview with Gamasutra, he said, "I'm a strong believer in console. And what that appliance means in my family room, under my TV. Like I think...I log in with a controller, it kind of has power options and auto-update options that just feel a lot more like my cable box than it does my laptop. I'm not saying one is better than the other, but that space of a console, you just turn it on and it's always ready and it's really purpose-built to go do one thing first, which is play games. Yes, people can do other things on it, but it's purpose-built for that. I'm a believer in that.
"And I've said, and this is actually true, the planning for what happens after Scorpio in the console space is already underway. You have to think about it that way. Like, what is the next thing? We -- I -- remain committed to the console space. We think it's critically important."
While the previous console generation lasted an unusually long eight years, there will be only four years between Scorpio and Xbox One, and the rapid iteration we've seen in the console space lately (Xbox One S, PS4 Pro) is not something that necessarily can continue.
"It's possible console generations slow down. Because I don't want to falsely put out a console that doesn't have a real selling proposition relative to the thing that's already in the market," Spencer noted. "I've said this before, that with the launch of this generation, I thought we struggled a little bit. Because a late-gen 360 game looked pretty good. So when an early-gen game from this generation came out, if you weren't in the industry, and you looked at late-gen 360 game to early-gen Xbox One game -- and I'd say the same thing for the other platforms -- you couldn't make the same statement you made on original Xbox to 360, where the screen went from 4:3 interlaced to all of a sudden you're sitting there at 720p HD. Like, it was just obvious."
The business of the console space also makes it difficult for platform holders to sell new hardware frequently, because the machines are usually loss leaders. "In terms of where the console space goes, there's some things about how the console business runs, in terms of you don't make any money on the hardware, it's making money on the games, making money on the service. So if you're in a situation where you're subsidizing the hardware, a faster refresh of the hardware really hurts you," Spencer continued.
"Because obviously, any subsidy of the hardware is kind of played out over, somebody is going to buy games, they're going to subscribe to Live, they might go subscribe to Game Pass and other things. And that's how you kind of run a business around the console space. So I don't think you'll see console move. Unless the prices of the consoles themselves change to where they're not a subsidized piece of hardware but rather something that's profitable, like other consumer electronic devices, I don't think you're going to see a constant iteration in the console space."
Elsewhere in the interview, Spencer also touched on his team's approach to VR, refuting the notion that Microsoft isn't that interested or doesn't know what it's doing. "In terms of hardware, we will talk more about it. There is a plan. I'll say that. This is not a we don't know what we're doing; it's more that we aren't saying yet," he said. "I think it's an immersive experience. I do not like that people are having to say, which of these VR verticals do I go pick right now, as a developer? Because I don't think any of them are really big enough yet to support a single experience. So you can see what we've done on console where we've said hey, go unlock your console and become a developer and go build a console game. You don't need to sign any kind of exclusivity deal with us in order to go unlock our console and go party on it. And build games.
"So we're going to...my approach is to try and take a more open and inclusive approach to VR. The problem is the other people who are creating closed ecosystems are probably not going to like that. They're probably not going to want to play."
The full interview has much more on Scorpio, PC, preserving classic games and other topics.