I do not see much point in dwelling on how we got here, because I think it is quite obvious to us all what’s gone wrong. All of Spencer’s big bets — the pivot to subscriptions, the variable hardware SKUs, the spending spree of studio acquisitions — were contingent on Xbox not just being, to borrow the Xbox tagline, ‘the best place to play’, but the best place to play the best games.
If there’s one lesson we can take from the Spencer era it’s that you can enact all the disruptive change you like, but you cannot disprove this industry’s oldest truth: great games sell consoles. A hundred billion dollars later, Xbox still doesn’t have them — if anything I would argue its firstparty output has got worse since the shopping spree began — and its struggles are, as such, no surprise at all.
Now that all his big bets have failed, Spencer is turning to corrective measures — short-term fixes that might juice the numbers in the next couple of P&Ls, but seem destined to further weaken the Xbox ecosystem down the line. Bringing the likes of the Epic Game Store and Itch.io to Xbox consoles would confuse the value proposition, give users more ways to give money to people that aren’t Microsoft, and do nothing to transform Xbox’s fortunes.
I would love to have my Itch library on a console, don’t get me wrong, but if Spencer thinks that’s going to move the needle in any meaningful way then I have some magic beans to sell him. And if he thinks that this is a two-way street — the first step on a journey that ends with Game Pass on PS5, Switch and Steam — then he has truly lost the plot.
Taking former exclusives to rival platforms is yet more short-term thinking. Sure, it may pump the numbers a bit, but each new port is one less reason for a potential new customer to buy an Xbox, and one more reason for Xbox owners to switch sides and abandon the platform for good. Once again I cannot see a way in which this ends with Xbox, as we know it today at least, getting stronger.
To be clear, I feel bad for Spencer. He seems a decent sort. I think he’s come into this with the best of intentions, and in a parallel universe where every horse he backed romped home, he would be credited with transforming, and perhaps even saving, the game industry. In another, where instead of spending $70bn on Activision Blizzard he spent it on 230-odd games with the same budget as Spider-Man 2, perhaps Xbox is flying.
But in our world he has spent ten years and gargantuan amounts of money taking Xbox from third place to third place, and that is not the market’s fault. If the writing isn’t on the wall for Xbox as a whole, then it certainly could be for him.
Phil Spencer, long cast as Xbox’s saviour, may be remembered as the man who killed it