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🤯 Future of Xbox Predictions
What to Know. On Thursday, Microsoft will talk about its “vision for the future of Xbox", in response to rumors that the company planned to release its first party titles on rival platforms, rumors which prompted hysteria from the Xbox community about the direction of the brand. In last week’s Early Access, I did my best to explain why exclusivity (of any kind) is bad for gamers and the gaming community, and told you to adopt a “wait and see” approach to these specific rumors about Microsoft.
Why is this Happening. Even with a surge in revenue from the Activision deal, Microsoft (like the rest of the industry) is facing economic pressures. Game Pass growth has clearly been sluggish. Microsoft dropped Game Pass growth as a target for Satya Nadella’s executive compensation last year. And it has not provided any update on subscriber numbers to investors since announcing the service had 25 million subscribers in May 2022 (some analysts estimate the service is only at around 33 million subscribers now). The company feels like it needs to pivot.
The Future of Xbox. While no firm conclusions can be drawn until after Microsoft’s laid out its plans for the Xbox brand, I think there are some pretty solid predictions we can make on what will be announced:
Xbox Everywhere. Microsoft will talk about its ambitious vision to bring Xbox everywhere., something the company has publicly discussed before. Last December, Microsoft’s CFO said that “our mission is to bring our first-party experiences [and] our subscription services to every screen that can play games." When asked for comment, Phil Spencer threw cold water on the idea that that meant Microsoft wanted to put Game Pass on PlayStation or Nintendo - saying that “it’s not in our plans.” But the sentiment from Microsoft’s CFO remains true - Xbox needs to be more than just a plastic box, and Microsoft has a utopian vision for a more open way to play games.
Multiplatform Releases. The kernel of truth to all of the rumors is that Microsoft is, in fact, debating whether it should publish its first-party games on rival platforms. There are upsides to doing this, but Microsoft is also aware of the acute risks to the Xbox brand such a seismic move might present. Expect for Microsoft to implement this change gradually - with a focus on select AA titles after a period of exclusivity on Xbox (Hi-Fi Rush, Pentiment) and live-service titles that need large communities to flourish (Sea of Thieves). Microsoft could also do this for select AAA titles. But, crucially: (1) don’t expect for every AAA title to go multiplatform (Microsoft will still want certain titles to remain exclusive in perpetuity to bolster its brand); and (2) don’t expect for any AAA title to go multiplatform soon (Microsoft will want to measure the impact of bringing select AA titles to other platforms before making a shift company-wide).
Hardware Commitment. Even the possibility that Xbox’s first-party titles could be published elsewhere has prompted hysteria that Microsoft is aiming to shutter its hardware line. And so Microsoft will double down on its commitment to making Xbox hardware on Thursday, and to bolster its credibility, it might tease its mid-generation updates to the Xbox Series X|S. Xbox is a core part of Microsoft’s business - the gaming division now contributes more to Microsoft’s bottom-line than Windows does - and Xbox hardware isn’t going anywhere. We already know that Microsoft is planning to release its next-gen console in 2028.
More Devices. Microsoft is not content pursuing the same strategy as Sony or Nintendo, where exclusive software and console hardware support each other in a virtuous circle. Xbox’s long term vision is to become an “immersive game and app platform” and to sever the brands link to specific devices to become a true “Netflix for gamers.” Consistent with this, expect for Microsoft to hint at new partnerships (it’s been almost two years since Samsung and Microsoft partnered to bring the Xbox App to Samsung televisions), to tease new devices capable of playing Xbox games (like the rumored handheld), and perhaps even announce its own mobile app store (Apple’s decision to impose a punitive “Core Technology Fee” is a significant hurdle to this, however).
More Games. Xbox has made significant investments in its first-party studios, and its development pipeline (both short and long-term) is impressive: Avowed, Indiana Jones and the Great Circle, The Elder Scrolls 6, etc. Expect for Xbox to highlight those investments, to make crystal clear that the future of Xbox is strong, and to pledge that further investments are on their way.
There are big questions Microsoft needs to answer on Thursday. Why should consumers want to own an Xbox? What does it mean to own an Xbox? And how is Microsoft innovating and investing in its Xbox ecosystem in a way that matches gamers commitment they’re making to the brand?
🔥 Quick Hits
Sony Earnings. Sony’s gaming division reported another record quarter in terms of revenue to close out 2023, but the company is looking to improve profitability with a forecasted decline in PlayStation 5 hardware sales and a relatively dry year for PlayStation first-party in 2024. One way that it plans to do so is by pursuing a more “aggressive” PC release strategy. In a Q&A session, PlayStation chairman Hiroki Totoki said the company needs to be releasing more first-party titles “multi-platform” (he quickly clarified that he meant PC): “In the past, we wanted to popularize consoles, and a first-party title’s main purpose was to make the console popular . . . This is true, but there’s a synergy to it" and "a first-party [game] can be grown with multi-platform” to bolster revenue.
Industry Layoffs. Rebekah Valentine at IGN has a phenomenal report about the layoffs plaguing the gaming industry. After speaking to over 40 developers, she writes that “while the details in each story vary, almost all of them painted a picture of the games industry as an increasingly volatile environment fraught with high costs, growing risks, and increasing volatility.”
Helldivers 2. Helldivers 2 is another surprise hit of 2024, and it is now the most successful game PlayStation has every cross-published to PC platforms (by far). Despite its launch woes, the game achieved a higher peak concurrent player count than either God of War or Horizon Zero Dawn, or any other Steam game published by PlayStation studios, shortly after launch. And yesterday, the game had an incredible peak concurrent player count of 203,644.
Skull and Bones. Ubisoft co-founder and CEO Yves Guillemot defended the $70 price tag for Skull and Bones, calling the game “fully fledged” and describing it as a “really full, triple . . . quadruple-A game, that will deliver in the long run.”
Disney + Epic Games. The Walt Disney Company made a $1.5 billion investment to acquire an equity stake in Epic Games. Disney said they want to create an “all-new games and entertainment universe” connected to Fortnite, which will “offer a multitude of opportunities for consumers to play, watch, shop and engage with content, characters and stories from Disney, Pixar, Marvel, Star Wars, Avatar and more.” The platform will launch “soon(ish)” and let users create their own Disney experiences and share that content with each other.
👀 Game Dev Moves
This week’s highlighted job opportunities in game dev:
Respawn Entertainment is hiring a Senior User Interface Artist (Star Wars FPS) in Los Angeles, CA (Hybrid)
Blizzard Entertainment is hiring a Lead Game Designer | Diablo IV in Irvine, CA (On-site)
That’s No Moon is hiring a Narrative Gameplay Animator (Project Hire) in Los Angeles, CA (unknown)
🕹 Upcoming Games
New game releases for the week ahead - February 19 to 25.
qomp [PS5, XSX, PS4, SWITCH, PC] - February 20
Last Epoch [PC] - February 21
Terminator: Dark Fate - Defiance [PC] - February 21
Inkulinati [PS5, XSX, PS4, XBO, SWITCH, PC] - February 22
Pacific Drive [PS5, PC] - February 22
Sons of the Forest [PC] - February 22
View all of the upcoming video game release dates (including DLC) for PS5, Xbox Series X, PC, Nintendo Switch, and more, over on VSG’s release calendar.
That’s all for this week. Early Access will be back in your inbox next Wednesday.
Thanks for reading,
Josh
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