Microsoft Gambles on Multiplatform Future for Xbox

Microsoft stunned the gaming world this week with rumours that it plans to release select Xbox exclusives on rival PlayStation and Nintendo consoles. Headlining this seismic strategy shift are tentpole titles like Hi-Fi Rush, Pentiment, and the swashbuckling multiplayer epic, Sea of Thieves.

Industry insiders say Microsoft hopes to announce details around these multiplatform releases as early as this week. But why tamper with a successful Xbox formula that has kept gamers hooked for over 20 years?

Simply put – Microsoft needs to get bigger in gaming. Fast.

Despite critical acclaim for the Xbox Series X/S, sales continue to lag behind Sony’s PlayStation 5. And after impressive early growth, subscriptions to Microsoft’s Netflix-style Game Pass service have slowed over the past year.

This double whammy coincides with Microsoft’s massive $68.7 billion acquisition of Activision Blizzard, which regulators across the globe are scrutinizing closely for anti-competitive concerns. Landing blockbuster cross-platform titles like Call of Duty on PlayStation and Nintendo hardware could ease some of that pressure.

Of course, launching first-party games outside the Xbox ecosystem is not without risks either. It begs the question – if marquee titles like Starfield release everywhere, then what’s the incentive to buy Xbox hardware at all?

To offset potential backlash from its loyal user base, industry watchers speculate Microsoft has new Xbox hardware aces up its sleeve.

A Handheld Future for Xbox?

Rumblings of an Xbox handheld gaming device have grown louder in recent months. Several tech reports stoked rumours in June 2022, claiming Microsoft ordered two new Xbox models over the next two years. One he suspects could be a portable.

xbox literally greenlit several new hardware projects in the past couple of weeks

— Jez (@JezCorden) February 1, 2024

Notable Xbox figures are also fuelling handheld hype. Head of Xbox Phil Spencer made headlines for “liking” speculation around an Xbox handheld on social media. While WindowsCentral’s Jez Corden insisted Xbox greenlit “several new hardware projects” beyond the Series X/S.

A handheld would align with Microsoft’s goal of reaching gamers everywhere – whether on console, PC or mobile devices via cloud streaming. And let’s not forget that Xbox architect Seamus Blackley recently said he regrets not pushing a portable Xbox back in the early 2000’s.

If Microsoft revived that vision now, it may convince sceptics that Xbox hardware still factors prominently in the company’s gaming roadmap.

The Netflix of Gaming Stumbles

Let’s rewind to early 2022 though. Microsoft was riding high off soaring Game Pass subscriptions and boundless ambition.

During an internal all-hands in January, gaming chief Phil Spencer confidently proclaimed that Microsoft is “building the Netflix of games” with Game Pass. At the time, the service boasted 25 million subscribers and seemed poised for exponential growth.

Fast forward one year and that rosy outlook faded fast. The delay of tentpole games like Starfield sapped momentum. While some estimates indicate paltry subscriber gains up to around 33 million.

It’s clear Microsoft needs to urgently kickstart new avenues of growth for Game Pass. And opening the gates to millions of PlayStation and Nintendo gamers could help big time.

Especially with Sony doubling down on rival service PlayStation Plus. And Nintendo expanding its library with cult classics like Goldeneye 007. The battle to be the “Netflix of Gaming” just intensified.

The Mobile Gaming Gold Rush

Another major driving force behind Microsoft’s strategic shift is mobile gaming. Revenue from smartphone titles now eclipses PC and console combined.

Little wonder Xbox is gearing up to launch its own mobile gaming store this year. One that may also feature PlayStation and Nintendo titles if regulatory changes in Europe bear fruit.

Microsoft’s pending Activision Blizzard takeover also brings mobile heavyweights like Call of Duty Mobile, Candy Crush and Hearthstone into the fold. Prime content for an Xbox gaming store not bound to Windows.

Expanding Xbox game availability across all major platforms plays directly into Microsoft’s “players first” ethos as well. Allowing Game Pass subscribers the flexibility to enjoy marquee games on any device.

It’s a calculated gamble nonetheless. Once gamers get their Elder Scrolls 6 fix on a PlayStation 5, will they stay loyal to Xbox long term?

That’s why Microsoft needs to emphasize platforms like Game Pass and xCloud in its marketing, not Xbox hardware alone. The company’s gaming future likely depends on selling versatile gaming experiences that extend far beyond the console in your living room.

The Road Ahead

Clearly the days of limiting major releases to a single family of devices are coming to a close for Microsoft. Embracing a platform-agnostic future for Xbox is crucial to compete in a fragmented media landscape dominated by mobile.

And efforts like xCloud game streaming aim to make the concept of gaming hardware irrelevant altogether anyway.

But Microsoft must tiptoe carefully to avoid alienating its core Xbox fanbase in the process. New product announcements set for later this week should shed more light on the company’s grand unification plans.

Because at the end of the day, evolving Xbox from a console brand into a platform that spans all devices may determine whether Microsoft thrives or dies in its quest to be the “Netflix of gaming.”