Is Xbox Successful Right Now? Phil Spencer Shares His Thoughts

They are making more money than previously.

So as a company yes. And that’s all they will care about.

As consumers, I think the jury is still out there. Yes game pass is still good value, but its cost is rising. We are still waiting on the pipeline of games they keep telling us are coming. Then there’s the whole mixed messaging.

MS have fingers in a lot of pies but none are currently running optimally.

@PsBoxSwitchOwner "MS have fingers in a lot of pies but none are currently running optimally."

Exactly. They must have acquired a lot of talent now. Maybe not try and build a better version of franchises like Halo, Gears, Forza Horizon etc and let the studios pitch interesting projects themselves. Take risks and they will probably create a new instant classic at some point in time.

"He actually pointed to the idea of a $1,000 console as being something that Xbox needs to avoid if the company wants to reach new players"

A dig at the Pro or not, the PS5 Pro does point towards an uncomfortable reality where the next generation of consoles are likely to launch at least as expensive and possibly more so. We've never had a generation where 4 years in, the hardware costs more than at launch.

Looking at the likelihood Xbox and PS sticking with AMD, their CPU's have made massive gains due to the addition of 3D V-cache, so how they go about trying to incorporate that into an SOC and keeping cooling and costs under control will be a huge challenge

This bloke talks so much bs it’s unbelievable. He skirts around direct questions and never really answers anything. He should be a politician, he’d fit right in with those ****s

There’s a typo in the quote. It’s written as “The Xbox business has never been more healthy” when it should read ‘The Microsoft Gaming business has never been more healthy’

However, he also warned of the need to remain "creative and adaptive" in order to achieve continued success.

I agree with this in theory; Xbox can clearly no longer compete with PlayStation purely on sales of its own hardware and only selling first-party games on said hardware. However, I do hope that all the other initiatives - Game Pass, Cloud, first-party games on rival platforms, etc - continue to keep the Xbox business "healthy", because if they don't pan out either then I do wonder sometimes about how much longer Microsoft will be willing to pump money into the Xbox brand/ecosystem.

Great for the company, awful if you are an Xbox fan.

My platform of choice has had to be relegated to backwards compatibility and what's left of my gamepass sub because I have no faith in the direction they are going right now.

@carlos82 I don’t think either MS nor Sony want £700 ‘standard’ consoles. Because it just won’t work out for them.

There’s a difference between producing upto 100m of a standard console and 5-10m pro version for enthusiasts.

Consoles are generally loss leaders to get people into the ecosystem and buy software and services.

World reasons aside (inflation wars etc) I believe both will want to be under £600 and probably closer to £550.

As long as Xbox makes money for Microsoft then that that is all they care about - as do most businesses - but I can’t truly see a future where Xbox will exist long term and is heading down the route of becoming Microsoft gaming now.

He actually pointed to the idea of a $1,000 console as being something that Xbox needs to avoid if the company wants to reach new players.

So, £999.99 console incoming then..!

As I pointed out to a (particularly rude!) person the other day, if you hold the PS5 Pro with stand and disc-drive as the benchmark at £820, and then expect Microsoft to beat the specs and quality that the Pro offers (which it will), then you can expect the NeXtBoX to also come in at a premium price. Microsoft will only swallow so much in terms of losses per console, particularly with games selling the majority of copies on the PlayStation, and so whilst I truly believe that keeping the cost of the NeXtBoX below £1000 will be something Microsoft aim for, I don't think it will be by much. I find it difficult to believe that they can offer something that beats the Pro in all departments, but that also costs less than the Pro does...

@PsBoxSwitchOwner they certainly won't want them to be that much but will they be able to get down to those prices? As I said, the RRP of their current consoles is higher than at launch 4 years ago, when normally this price would have reduced significantly by now

I disagree, @PsBoxSwitchOwner. The NeXtBoX will undoubtedly exceed the specs and capabilities of the Pro (just as the PS5 and the Series X were superior to the PS4 pro and the One X), and that will not come cheap.

Plus, as you say, it's more about the software sales than the consoles, but the vast majority of games (upward of 75%) sell on the PlayStation, so it's not like Microsoft can expect to reap the rewards of software sales either, which tends to suggest they won't want to be making much of a loss on the console sales either...

They're making more money than ever before and will be the #1 gaming brand in revenue very shortly. What the players think means nothing and people can complain all they want but in the end, M$ makes the money and laughs all the way to the bank. Business is about making money, not appeasing the hardcore.

@Fiendish-Beaver again. Sony are making a profit on the pro.

In general neither Sony nor MS make money on a console (especially at start of generation)

There’s a big difference to sourcing 5million parts to potentially 100million. Cost of manufacturing drops too and all kinds.

Casuals/families etcwon’t stomach £1000 consoles.

I honestly don't see the industry as healthy as he claims it is, considering the numerous layoffs, studio closures, and various negative reports...

All they need to do is make great first party exclusives and they can claw market share back, just as PS3 did back in the day. Sadly, more recent releases have been poorly optimised, buggy and disappointing. I'm speaking as an OG Xbox owner who kind of wishes he went to PlayStation 4 when I had the chance, but now I keep my Series X largely just for my library...

Lies of P yet again, if the business was so healthy we wouldn’t have seen studio closures, price increases across everything but specially Game Pass, tiering for the service which decreased the value of standard Game Pass, the porting of several games to more successful platforms and even announcing them as the next big thing.

Maybe all this has made their profit margins to increase by 1% and that’s good news for them even though they decimated the entire division, we can expect this amazing strategy to be followed in the upcoming years.

@Fiendish-Beaver it depends. Sony and MS have always sold consoles at a loss to increase the user base and got the return from charging a percentage per sale on their platform.

With the PS5 pro Sony didn't take as much of a loss when it came to selling the console as the price was closer to gaming laptop with similar specs. Don't get me wrong, it's still a good deal compared to a pc but it's not as good compared to previous consoles.

This move makes sense since they don't have any competition on the Pro console market and since they didn't get the expected return on some (if not most) of their PS5 first party titles.

MS on the other hand would have a very good reason to knock the price down next gen. If they release a cheaper console with similar specs it's very likely to outsell Sony.

If that's going to be their strategy (which was during the 360 generation when the Xbox was considerably cheeper at release) they would also have the resources to do it. But judging by how they managed the brand this generation I doubt they have a plan for next month.

Can't wait for NeXtBoX to be revealed as largest technical leap for a console ever at $399..
I don't want to be rude, but $1000 is just a number attached to a type of paper bill. What matters is what does that combination get you on the market at that point in time. Prices have been going up on everything and with purchasing power as it is, it gets you about the same amount of products $500 would get you 7 years ago.
I understand mind barriers and sticker shock, but realistically we are all getting shaken every week when we see re-revised prices of groceries. It's time to stop focusing on the number, and start focusing on the relative (maintained?) quality of life.

I've seen reports that Sony is selling the Pro with a profit, @Donutsquad00. I agree that it sounds like a great strategy sounds to undercut Sony, but I'm not certain that Microsoft are in the consoles business for the long-haul. I think it was all about Game Pass, but that was meant to hit 100 million subscribers by 2030, yet it has either plateaued at between 30 and 35 million, or, according to some reports, is actually falling. With that in mind, I think the money men at Microsoft have shifted the strategy to releasing software on the PlayStation with the likely intent (or simply consequence) that Microsoft will move out of the console business and into being a fully first-party publisher.

As for what their plans are, I agree, Microsoft are changing them on a whim, but I think that whim is taking them where ever the money is, and I think that will lead them out of the console business after the release of the NeXtBoX...

Oh, I agree, @PsBoxSwitchOwner, I don't think that casuals will stomach £1000, but I also think that the NeXtBoX will not be meant for casuals. It will be aimed at the likes of you and I. For the casuals, the Series consoles will continue to be made.

The point is, the Pro is marginally better than the base console and the Series X. It is not a huge leap by any stretch. It simply does everything a bit better. It stands to reason that the NeXtBoX will be better than the Pro, which is the way of things, and indeed, it will probably be quite a bit better than the Pro, which is also the way of things. That will not come cheap. Yes, the Pro may well be selling at a profit. Indeed, I've read that it's a decent profit at that, but once you factor in all the Pro beating technologies, it also stands to reason that the NeXtBoX will at the very least cost the same as a kitted out Pro (£820) but most likely still more than that. With the way the Xbox has sold this generation, and with the likely migration of gamers from the Xbox to the PlayStation due to the way Xbox is being run, I just cannot see Microsoft selling at a considerable loss. After all, at just £10 loss, ten million consoles sold becomes a loss of £100,000,000. £100 loss would be a billion! I just cannot see them doing that, not when I also think they want to move out of the console market anyway as I don't think they see that as the future for Microsoft...

Candy Crush Saga and CoD mobile are making them truckloads of cash and we're getting closer to day 1 games on Playstation, Indy's Playstation release date revealed before the game is even out torpedoing their own console sales, therefore "Xbox" has never been doing better.

I've turned on Phil after being a huge fan. For whatever he used to be, he's a corporate stooge now.

@PsBoxSwitchOwner “Gamepass is still good value, but it’s cost is rising”

Maybe officially it is but all someone has to do is google “Xbox Gamepass cd key” and u can still get one month subs of GP for dirt cheap from any of the different grey market CD Key sites…I’ve only payed $7 a month so far for Ultimate since the price increase (used to be $5) from sites like Eneba and Gamivo and I can’t imagine there’s many people who aren’t doing the same

Mincing through the politician speak it sounds like "We really have no idea what we're doing or where we're going but we're confident it'll all just kind of work out if we keep trying everything"

@PsBoxSwitchOwner cost is rising like literally any sub service out there? In the last year or two all my subs got pricer. I have video streaming subscription that is right now more expensive than GP.
And we all know the ways to buy GP for less: digital code sales, GP core conversions and such. Those are all legit ways to buy GP for less.

I do agree they need to finally deliver good games. Thats the only problem. 2022 was an empty year and last year I personally only enjoyed hifi-rush. This is where I stand with many commenters - they need to fix the games pipeline and quality and seems like its finally happening: Age of mythology and COD been a blast so far and Indy looks promising. As well as doom.

@Fiendish-Beaver man no offence but this is beyond the fandoyism. First of all, PS5 PRO is definitely NOT sold at a loss. This is a device where sony makes a good margin. Secondy, you think MS cant deliver a console in 2026-2027 that is better than ps5 PRO in 2024 and we learned recently that PS5 PRO was mostly done when ps5 lunched. Thirdly, well people are not fond of 700-800 console already and there is a chance that even ps6 can start at like 599 as its sold at a loss which is not the case with PRO

@Millionski yes subs are rising elsewhere. But this is an Xbox site so I’m going to talk about Xbox raising prices…

@Fiendish-Beaver Sony selling the PS5 Pro with profit is pretty much imposible. Consoles take a very long time to develop before they hit the shops and Sony stated recently that it took almost 10 years for the PS5 pro. That process involves paying for research, engineering, testing different types of hardware, manufacturing, creating dev kits, advertising etc. Console manufacturing is very different to phones or laptops where a company like Dell or HP will take last years laptop, put a newer graphics card and sell is as a brand new laptop.

I'm not a PC expert but I think you would struggle to make a PC with a similar spec for £700 and for Sony to make a profit they would have to cover all those costs, which are probably in the hundreds of millions, and then make some money on top of it.

As for Xbox staying in the hardware business, I think they kind of have to. And I think they know this very well.

Videogame sales are mostly on consoles, with PC not even coming close when it comes to sales. A few titles sell well on PC but the high majority are massively pirated and not really worth the bother if PC were the main platform. It's also due to the high effort of optimising a game for so many different types of hardware. And I'm not just pulling this out of my a**e I've worked in game dev for over 10 years.

Currently, both Sony and Ms take 20% of all the sales on their platform. I think MS have changed it recently to 15% but might have been just a rumour. MS are now after the acquisitions one, if not the biggest games publisher in the world. If they were to pull out from the hardware market it will give Sony monopoly over the console space which will most likely result in them putting the fees up. Ms need the hardware business to regulate the market and ultimately their investment which is why it makes sense for them to release a handheld and get in Nintendo's territory too.

I think they'll either be around for a very long time or implode by the end of this generation

Seems like Microsoft Gaming Division is still making money, Xbox on the other hand is fu*ked

To my understanding the Xbox brand makes a ridiculous amount of money. (Probably more than Sony and Nintendo combined) However, the Xbox console is a bit of a flop. Which is too bad because imo the Xbox Series (both X and S) is an excellent machine.

Think about it:

Say the ABK deal was blocked... Would Indiana Jones and Doom the Dark Ages have been Xbox/PC exclusives?

Maybe.

Would Tango Gameworks have been dissolved? Maybe.

Would Xbox have more budget to put into Game Pass and internal game production without a massive ABK deal going through?

Possibly.

All of this makes me think that we're living in the dark timeline. Should Sony/FTC have won their fight to block the deal? Maybe.

So healthy money wise but in other areas of morals or talent or survival of studios asking for things, trying to stay afloat, meet the Gamepass standards it couldn't be further from the truth as some can't meet their standards or studios ask for things they can't have and get shut down or don't make enough money for them? It's money or they are dead, ignored, survival means nothing. I get studios have to be shut for various reasons they can't just build up and up forever but some of the reasons for doing so are pretty ridiculous.

Just say it Phil Xbox/Microsoft is doing great with money via the many all over the place 'successful' strategies but otherwise it's just a load of mixed ideas that also are confusing, stupid and just insanely weird for any drop of money and studios/deals go why should we bother with Xbox/PC at all if the sales/tools/saying one thing then another isn't trust worthy enough.

I'm not against more platforms getting games, Sega did it Saturn/PC/Coleco Chameleon or otherwise.

I'll use any platform but I haven't cared for a single game on Series X because of the games being eh, the progression systems suck, the variety is there but the impact of anything in them is so unappealing, the deals are fine but I can get the games elsewhere if I was desperate enough which I'm not because none of them are appealing, older, earlier, other platforms and really just don't trust Xbox enough. I'm only getting OG/360/older Xbox One releases that's it. Besides blu-ray app/YT use in there.

That's without getting into barely many Indies due to them being nostalgia/heavily inspired and very boring, with only a few actually standing out the rest are repetitive safe garbage. Their skills differ sure I understand that but some really do try and the rest really really don't. Those that don't, don't deserve respect they want to prototype more do it, not do the bare minimum or copy cat competition so weakly it's a forgettable game among a sea of forgettable games.

No rules say a company can't put a web browser, office suite let alone their games on any platform they want.

But at the same time the strategy is really obvious for money and shooting a shot all over the place and really tiring let alone studios have no idea what safety or survival they have so unless the funding is enough, "TALENT" either, the 'flexibility' is to be believed even if creative projects or uncreative but money making works and people go to Gamepass, buy on any platform, give money any way they want or stick to games enough for money to flow it's fine because money is the answer in the end.

The rest is just all over the place and obvious it's money first then trustworthy.

@Fiendish-Beaver
Which begs the question, why are Microsoft even bothering with a next generation Xbox console.
There really seems little point in the design and manufacturing set up investment and that’s before getting the thing into shops and some PR.

The only reason I can give is that 50% of GP subs are on Xbox consoles and if they lose those subs then even GP would be on the chopping block to go.

I have to say, this comment section is a good read. Lots of good info 👏

@PsBoxSwitchOwner people don’t understand that manufacturing has costs. And the people that work for these companies want more compensation just like you and I. Also add to the fact that semiconductor production is more expensive in China and Taiwan as they both have a monopoly on it (the fault of the west).

@Donutsquad00 Sorry, but I gotta respectfully disagree with you there. There’s no way Xbox ever outsells PlayStation, unless hell freezes over and pigs fly en masse. The only time in history Xbox was able to do so was with early years of 360, with a very strong lineup of exclusives, something that will never be repeated. The only major USP Xbox has now is Game Pass, which has been around since 2017 and clearly has not been enough to turn the tide. Microsoft tried targeting cost-conscious consumers with XSS too, that wasn’t enough to turn the tide either.

The only way Xbox can conceivably grow marketshare is by scrapping the multiplatform push to PlayStation (which is never going to happen while Satya Nadella is CEO) or if they no longer play by the rules of the console market and so enable the nextbox to run Steam games and have full PC functionality.

Companies like Microsoft are just looking for continued profit growth. They want to out due themselves every year

I'm not sure that you have read any of my comments, @Millionski, or you meant to reply to someone else.

First off, I said the Pro is being sold at a profit. Indeed, I've seen it reported that it is a pretty decent profit.

Secondly, I have said multiple times that the NeXtBoX will be superior in specs and performance to the Pro. That is the way of things (which is exactly the phrasing I used above). Every single generation starts with a console that is better than the best offered in the previous generation. Even the much maligned Series S is better than the Xbox One X and the PS4 Pro.

However, I do not believe that the NeXtBoX, which I believe will arrive in 2026, or the PS6, which will come in 2027/8, will come in at less than the cost of the Pro, or if it is less, it won't be by much. Yes, I accept that the Pro is being sold at a profit, but if you improve on each of the components, you cannot expect those components to cost less than the components in the Pro. That being the case, unless the Pro is being sold at a ridiculous profit (which it isn't, I mean, just try building a PC with the same specs as the Pro, and you'll see how expensive those components are), then it figures that the NeXtBoX and the PS6 will cost more to manufacture than the Pro, and that cost will be passed on to the consumer. What I think will be the case with the next generation is that it will not be aimed at the casual gamer. It will be aimed at the hardcore gamer, because only they will be willing to cough up the cost of the console. I think the perfectly capable Series consoles and the PS5 will continue to be made well into the next generation.

@OldGamer999 in a nutshell if business decided to continue pushing hardware that means either they are profitable enough with current sales (people buying games and GP thru xbox store and remember MS takes 100% rveenues since its their platform) to justify investing into next gen hardware OR they are biting the bullet in hopes of future potential/growth. They said multiple times that growth is on PC/cloud. So it should mean the first reason: that these "low" sales are enough for them. Also, big audience is still on last gen but they continue spending $ for GP and xbox store so MS keep generating revenues from 10+ year old machines.

I wonder what the cut-off point is with sales where they stop developing new consoles. My speculation it is actually low, because well decisions to develop next gen are done roughly during mid gen (as it takes years to develop new hardware). so basically, that implies 30M of series is already enough to keep going.

@Fiendish-Beaver we can only speculate but given the backlash to PS5 PRO pricing, there is a potential for ps6 and nextbox to be 599-649. They can cut 2tb as well.

the math I have is lets say production costs for PRO is 500 and they earn 200 on top. New gen has always been (I agree that might change) sold at a loss. so even if ps6 costs 700, they can afford up to 100 loss. here is the 599-649.

Again its my speculation and you might be right but I really think that $800-1k for base model consoles wont fly.

Speaking of spiking console costs, the chump tarrifs plan, assuming it gets fully implemented, will artificially spike costs of ALL IMPORTS, everything from Apples 🍏 to Xbox components 🎮. #wetoldyou 🌊

@OldGamer999 They are bothering because, just like when the Sony PS3 was losing 'Billions' Sony still kept going because they knew there is Billions to be made from gaming despite setbacks.
A multi Trillion dollar company like Microsoft who are fully established in the gaming industry will never ieave it for that exact same reason.

@Rog-X
Do you wish like me Microsoft now they have many studios would have taken the fight more to Sony.
For me I think they should do all devices apart from other consoles and kept those exclusives for Xbox consoles only, game pass and other devices but not Sony or Nintendo consoles.

Sony have faulted a bit and I think Xbox could have taken advantage of this and taken the home console fight to them.

If they start to aggressively promote Xbox consoles and the exclusive games and gamepass linked to Xbox consoles with some amazing advertising etc, they can make inroads.

I would have preferred that.