What helped them "win" (at least in terms of popular perception anyways) with the 360 was a very aggressive push on games. Exclusive games. High-quality games. Games you couldn't get on PlayStation. Games that had content you got early on Xbox. Etc. It really, really improved their standing despite being absolutely dead-last the gen before.
Well, these exclusive games happened because PS3 was released almost 2 years later and was very difficult to develop for, so some devs only made the Xbox version at launch because PS3 still wasn't ready, or at least their engine still didn't support well.
Also, even if launch aligned PS3 sold faster than 360, since it started later during some time had a worse start and the marketshare was split. Also, the AAA budgets had increased a lot vs previous gen. So many AAA games that until then were exclusive went multi because devs needed extra revenue.
PS3 also had many other issues as being too expensive etc, all of which benefited Xbox. Also, the early exclusives for PS3 did suck and MS was lucky with the early exclusives they signed/got.
Later PS3 started to fix their issues and made a comeback that ended outselling the 360. I think that if 360 did a good job in the first half was in a part thanks to a good job in MS side, but specially due to the PS failures.
And Sony did learn from these failures, fixed them and didn't repeat them again with PS4 and PS5. They are killing it since then, performing better than ever. To fight the Sony of the PS5, stronger than ever, has nothing to do with the messy Sony of the PS3.
And ironically, the same happened to help the PS3 claw its way back from failure. A focus on producing good, high-quality, blockbuster first-party games, trying to make each one feel like an event not to be missed. Uncharted, inFamous, The Last of Us, God of War 3. Games that were unique and couldn't be found elsewhere like LittleBigPlanet. Games that covered staples that families and teens loved like Ratchet & Clank, Resistance, Sly Cooper. This, and their increased efforts to minimize the difficulty for third parties to develop for their platform, are what allowed them their massive comeback at the end of the gen.
Are games the SOLE factor? No. Are they one very important factor, and an investment that will require time and patience? Yes.
Sounds to me like the MS shareholders or Satya do not have said patience, however, which would mean that even with Phil gone, things are unlikely to change, sadly. There needs to be a whole culture shift at Microsoft in terms of how they view that division if they ever want it to return to its peak.
In the case of the PS3 comeback there were more factors in the comeback, like reducing costs to reduce price and improving things like their PSN/online to basically (almost) match what Xbox had.
But yes, the main reason of the comeback I think it was the release of many quality exclusives. I also remember Journey.
I agree, AAA games and to build teams require time and patience, many years. And MS is having patience with their gaming division, they have been over 20 years generating loses and still investing dozens of billions on it.
EDIT: I'm also not at all sure why Phil seems to think that people need to trade in their PlayStations or sell them and get an Xbox to improve their market share.
He didn't say that. He said that some people (fans) talk as if they would release some quality games the console wars would radically change and then they'd be the ones dominating. He -being realistic and honest- thinks it wouldn't be the case and that in any case their goal isn't to sell more consoles than their competition.
This isn't an all-or-nothing market, and many people will own a second or even third (or fourth now, with the Steam Deck) console for gaming, so long as there are games they're interested in. Games that make them feel like the purchase is worth it. Just giving up and trying to pivot the entire industry to something else (whether the industry likes it or not) in order to try to get in on the ground floor there and corner that market early just reeks of both arrogance and a lack of confidence in existing product, and that they think the sole way to further push that and prop it up is via buying out huge chunks of the industry to force their vision is rather telling.
He didn't give up, he only has been honest admitting that their direct competition dominates them and that to release some great games won't dramatically turn tables making them the ones dominating or that would make them sell their PS5 because this is not how things work.
He also never said people only owns a single console, in fact he mentioned things he's enjoying now he mentioned to play certain game that I don't remember in the Steamdeck.
Bear in mind, Activision themselves have admitted they'd NEVER consider Day-and-Date on streaming services. Never. It would cannibalize their sales, and make no business sense. Take-Two have come out with that same stance as well. Makes no sense for them. With some of the biggest publishers pushing back on this, it hurts their "future of gaming" narrative. And they NEED that now. NO faith in the Xbox brand as-is. That's why they're so all-in on GP. But GP isn't expanding as they'd hoped. So what are they doing? Buying entire publishers, including the biggest third-party in gaming, and trying to force them into this service. FORCE the future they NEED for their brand now.
This entire situation is just so short-sighted and sad.
To include AAA games day one on a subscription doesn't make finantial sense. It's a finantial suicide for the platform holder that pays the games included there to the publishers.
MS never publicly admitted but this is why MS does it, because they wanted to highly grow in the game subs because nobody else has the money to do it without going bankrupt. They wanted to grow it to the point it of becoming the Netflix/Spotify of gaming to the point it would kill the business of selling games and most rival game subs.
But guess what, this isn't happening. They realized that only a portion of their fans are the ones paying for the game sub, and got stuck at around 25M. Not even acquiring Bethesda and announcing that they were going to acquire ABK did help them go beyond that.
Meanwhile their direct competitor, who has over twice the market share, MAU, console sales also have around twice the game subs, and without needing to put there their games day one. Basically because they have a way wider catalog of great games, specially legacy ones. And because they started to build their game subs and cloud gaming before than, so not only have more games there, but also a bigger userbase even before starting this gen.
I think their 'day one on GP' strategy, focusing on GP and their nonsensical GP ambitions is their biggest mistake. I think they focus on game subs because they saw that can't compete selling consoles or games, so could try here to see if they get lucky and get their Netflix/Spotify, and also because in terms of marketing/PR the Xbox cloud gaming helps them to crosspromote it with Azure.
MS have to focus on games console gamers like.
