The internet is abuzz with what Microsoft & Xbox may be planning for its future.
Earlier in January, reputable insider “Nate the Hate” mentioned on one of his podcasts that an Xbox-exclusive title that had been “met with high critical acclaim” would make its way to the Nintendo Switch during the 2024 calendar year; many online would infer that this could be Tango Gameworks’ critically-acclaimed Xbox & PC hit Hi-Fi Rush. It seemed that this rumour largely came and went without much controversy, probably since Hi-Fi Rush is a game smaller in scope compared to Xbox’s other 2023 blockbuster games such as Starfield or Forza Motorsport, and could also benefit financially by expanding its audience to other platforms. A few days later, Jeff Grubb of Giant Bomb heard from his sources that Rare’s live-service game Sea of Thieves would also make its way to non-Xbox consoles, to which Stephen Totilo, formerly of Axios and now runs the ‘Game File’ newsletter, corroborated. This also did not cause any shockwaves considering Sea of Thieves first released in 2018, and the game’s age and community-focused nature could also do with a new wave of new players from other gaming platforms.
But over the last week, new rumours started to brew that got the Xbox community in a tizzy. An article by video game website XboxEra details, based on sources, how Microsoft could also be planning to launch one of their biggest first-party exclusives from 2023, Bethesda Games Studio’s Starfield, to PlayStation 5 following the release of their “Shattered Space” expansion on Xbox consoles and PC sometime in 2024. Additionally, Microsoft made “additional investment” into PlayStation 5 dev kits, further lending credence to this rumour. On the same day, tech website ‘The Verge’ received a tip from their source that MachineGames’s ‘Indiana Jones and the Great Circle’, which had its official announcement last month at during Microsoft’s Developer_Direct last month, is a possible candidate to release on Sony’s console after a short exclusivity window on Xbox and PC, which is rumoured to be slated for December of 2024, and other Microsoft first-party titles that could also make its way to competitors consoles. Last but certainly not least, Giant Bomb’s Jeff Grubb also threw in Gears of War as a possible contender of IP to join other non-Xbox consoles; this would probably be the biggest shock to the Xbox faithful, considering that this franchise has been exclusive to Microsoft consoles for almost two decades.
With these rumours brewing since Sunday, there was no response from Microsoft on what was really going on internally, until they finally acknowledged in a tweet:
“We’re listening and we hear you. We’ve been planning a business update event for next week, where we look forward to sharing more details with you about our vision for the future of Xbox. Stay tuned.”
Phil Spencer
While it’s all good that they will respond to the hubbub on the internet on the state of Xbox, more rumours and misinformation could only percolate, and the Xbox contingent will only grow more anxious as to what the long-term future of Xbox will become. Has their two-decade investment to the Xbox platform all been in vain? Will PlayStation just become the default gaming console going forward if Microsoft just transfers their exclusives to their platform? Will Microsoft go the way of Sega a la the Dreamcast – and if so, does that risk creating a duopoly in the console games industry including Sony and Nintendo? We will have to extrapolate the possibilities once Microsoft responds some time next week. But in order to set the scene, we also have to understand the history of the Xbox brand, and the choices made over the last two decades that have got them to where they are now.
Microsoft’s Foray into Console Gaming
While Microsoft had long been a proponent of video games on Windows machines (see Bill Gates lauding Doom as part of a Windows 95 press conference in 1995), the console gaming market was booming in the 1990s beginning with the SNES-Sega Genesis console war beginning that decade, then transitioning into the stratospheric rise of the first Sony PlayStation console ending that decade. With Bill Gates fearing that the PlayStation could drive Windows-based PCs out of the market, he decided that Microsoft should create its own console to compete with Sony in the home-console gaming industry. As Sony had released the PlayStation 2 in North America in the fall of 2000, it expectedly dominated in sales and had an almost-complete stranglehold with consumers, to the point where its only competitor at the time during the new console generation, the Sega Dreamcast, failed to meet its already lowered sales expectations and drove Sega to stop developing gaming consoles for the first time in almost two decades, transitioning to a third-party publishing role. By this point, Bill Gates had already announced the Xbox console at the Game Developers Conference in March 2000, and was in the process of courting game publishers and developers to strengthen the console’s library of games especially during the important launch period, most notably with the acquisition of Bungie whose next project at the time, Halo: Combat Evolved, switched from being a PC and Mac game to an Xbox launch exclusive game.
The launch window for Xbox had an impressive start of exclusive titles, with the aforementioned “Halo: Combat Evolved”, “Project Gotham Racing” from Bizarre Creations, “Dead or Alive 3” from Team Ninja and “Oddworld: Munch’s Oddysee” from Oddworld Inhabitants. Plus, in the aftermath of Dreamcast’s demise, the Xbox bolstered its exclusives library by announcing an unprecedented partnership with Sega at the 2001 Tokyo Games Show to publish 11 games on the Xbox console, including “Jet Set Radio Future”, “Panzer Dragoon Orta” and “Sega GT”, which would released over the lifespan of the console. And the critically-acclaimed games kept coming from Microsoft studios such as Fable and Ninja Garden in 2004 developed by Lionhead and Team Ninja respectively, and Turn 10 would develop the Gran Turismo competitor for Xbox with Forza Motorsport in 2005. Third-party publishers would also get on-board with developing timed-exclusives for the Xbox, such as Ubisoft Montreal with their critically-acclaimed timed-exclusive stealth action game “Splinter Cell” in 2002 (kickstarting an impressive franchise), and Bioware would develop the sprawling role-playing game set in the Star Wars universe with Knights of the Old Republic in 2003. Of course, Xbox Live would also forever change the way online gaming would be established on gaming consoles, and games such as Project Gotham Racing 2, MechAssault and Halo 2 would utilize Xbox Live’s platform to further engage players via the multiplayer experience on Xbox.
Arguably, the biggest success in terms of Xbox’s exclusives line-up at the time came during the Xbox 360 era, which also happened to be Microsoft’s highest-selling console to date. During its console launch, the Xbox 360 carried many great console exclusive games such as Call of Duty 2, Kameo: Elements of Power, Condemned: Criminal Origins and Project Gotham Racing 3. Throughout the console’s life, the 360 also launched the Gears of War and Viva Piñata franchises, brought many successful sequels for Halo and Forza, and snagged third-party timed exclusives such as Bioshock and Mass Effect that are looked back as classics. Not to mention, Xbox’s Summer of Arcade popularized smaller, independent games to the mainstream such as Braid, Castle Crashers, Shadow Complex and Limbo. Combined with timed-exclusive DLC packs for the Call of Duty franchise, the Xbox was leading the way for the majority of the console generation as PlayStation was catching up after its initial stumbles. And, just as Xbox Live pioneered online gaming on the original Xbox, further improvements to the service during the 360 generation meant that games such as Halo 3, Call of Duty 4: Modern Warfare and Grand Theft Auto IV were most popular on Xbox, despite the fee to pay online compared to Sony’s PSN service on PlayStation 3.
How Xbox Lost its Lead
While it is hard to pinpoint exactly where Xbox lost its way that would get them into their current predicament today, my theory is that the story for their downfall in Xbox console sales would start around 2009. One of Microsoft’s biggest console competitors at the time, Nintendo, was experiencing humungous success with their Wii console, which was credited for being able to expand their audience (dubbed ‘casual gamers’) on top of their traditional gaming faithful thanks to their motion-sensing capabilities with their controllers. Though it is pure speculation, Don Mattrick – at the time the senior vice president for Xbox 360 and PC gaming for Microsoft – may have been inspired by the success Nintendo was having with its technology, and was envisioning its own device for the console that would also incorporate motion-sensing as part of gameplay. This project would be codenamed “Project Natal”, and its “controller-free” gameplay potential was demonstrated on stage at Microsoft’s E3 Press Conference with a few technical demos – the famous of them being Lionhead Studio’s “Project Milo”. For additional context, other Xbox-exclusive games presented during this press conference included: Crackdown 2, Halo 3: ODST (plus the announcement of Halo: Reach), Forza Motorsport 3, Banjo-Kazooie: Nuts & Bolts, Alan Wake (a console-timed exclusive for more than a decade) and Left 4 Dead 2 (still a console-exclusive to this day).
At next year’s E3, Microsoft would formally announce that “Project Natal” would be launched as a device called “Kinect” for that Fall. While Xbox exclusives like Fable 3 and Halo: Reach was announced along with a 30-day timed exclusivity for Call of Duty DLC packs, the bulk of the conference was dedicated to Kinect games such as Kinect Adventures, Kinect Sports, Kinectimals and a demo of the next Forza utilizing the Kinect functionality – a clear change in strategy from Xbox to years prior. For contrast, Sony’s press conference that same day advertised an impressive line-up of exclusives, such as Killzone 3, LittleBigPlanet 2, Infamous 2, Gran Turismo 5 and the surprise announcement of a Twisted Metal reboot (plus, Gabe Newell also came on stage to announce Portal 2 for the PlayStation 3 with PS3-exclusive features from Steam such as updates and community-support, which was a big deal at the time). For the next few years, while Xbox was downplaying it’s Xbox games catalog – especially its exclusives besides it’s trifecta of Halo, Gears and Forza – in favour of pushing its Kinect device and its associated software, PlayStation was steadily building back its gaming exclusives following the lackluster launch of the PlayStation 3 (though it should be noted that Sony was also dipping it’s toes in the motion-control game with it’s PlayStation Move device, but they intelligently did not forget the core line-up of games during this timeframe). As a result, despite Xbox having the early lead during the console generation, PlayStation 3 was creeping back to be almost on-level with the 360 in sales.
But arguably the biggest blow to Xbox’s exclusive games library was accelerated by the PR disaster that was the E3 2013 Microsoft press-conference. By this point, a new dawn of consoles was on the horizon, with both the PlayStation 4 and Xbox One having been announced by the beginning of E3.
Trying to Play-Catch Up in the “Game Pass” Era
With Xbox One sales far behind PlayStation 4 during the start of the generation,
The Nature of Console-Game Exclusivity
Exclusive games for console games are a way for manufacturers to bring players into buying their hardware, as well as to partake in their online ecosystems in the modern era. Since that rivalry between Nintendo and Sega in the late-1980s with the SNES and Genesis/Master System respectively, each generation of consoles seems to have a “war” between two, and sometimes more console players. In the traditional sense, with the four battles over four generations between Microsoft’s Xbox consoles and Sony’s PlayStation consoles, it is generally regarded that Sony has won every generation in terms of consoles sold (the PlayStation 3 versus Xbox 360 was incredibly close though, as the 360 launched earlier and had the lead in units sold for a very long time until the last few years). Since the disastrous launch of the Xbox One, Microsoft no longer reports
Even in the current era, Microsoft is no stranger to releasing some games from its first-party studios to other platforms.
What is the Right Call for Microsoft?
My assumption would be that Microsoft would undertake a hybrid of the two schools-of-thought when it comes to exclusivity. In other words, for Microsoft to appear to stay in the game as a first-party hardware manufacturer and games publisher, they could opt to make their first-party software lineup timed-exclusives on Xbox hardware and PC, with the added benefit of Game Pass’s subscription pricing for access to these games. Then, once the exclusivity window expires, Microsoft can allow other platforms to make their games available playable on their consoles for full-price as a way to maximize revenue (if players were willing to wait and want to pay the amount). On top of this, Microsoft could experiment with this strategy on a case-by-case basis with only a few of their games at a time so as to not give away their “crown jewels” to other platforms.
