Phil Spencer, the chief of Microsoft’s Xbox unit, wants to untether his team’s green-hued brand from the video-gaming console that shares its name.
Phil Spencer, the chief of Microsoft’s Xbox unit, wants to untether his team’s green-hued brand from the video-gaming console that shares its name. At a media event last week, Spencer, a 27-year Microsoft veteran, echoed the Redmond company’s new cross-device focus with a pledge that his team was focused on video-gamers, regardless of whether they’re on a console or personal computer.
In an interview, he expanded on his vision for Microsoft’s gaming franchise and its role in the industry.
Q: You paint a pretty negative picture of the industry habit of making a new console every five to eight years that makes all your old games obsolete. Are we heading toward that same cycle again?
A: We’re not. And I think actually if you look at what Sony’s doing in bringing VR (virtual reality) into the middle of their generation, they’re trying to create a platform on top of their platform.
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Today, you see innovation happening so fast in other device categories that I think consoles should evolve. What other consumer-electronics device, aside from maybe your TV, do you have in your house that you buy and you expect it to last for 10 years? Your phone? What’s the half-life like now, 2½ years before somebody buys a new one? PC upgrade cycle is similar. Tablet, same thing.
There is a certain liberation and innovation that can happen there. The iPad games I bought five years ago still play on the iPad I have now. And I think that’s part of the commitment that we need to make to our (console) customers.
Q: Microsoft’s PC push has a big engineering component, linking Windows and Xbox. But what does the non-engineering push look like? What are Microsoft’s studios doing?
A: What’s worth calling out is our first-party creative capability. We know we have to go make the market. What does it mean to start “Quantum Break” on one screen and continue on another screen, and jump back and forth.
Most of the console (developers) will wait to see how our jump lands, and that makes complete sense from their business perspective. We talk to them about what our plans are and what we’re doing with “Quantum Break” and what we’re doing with “Forza.”
Q: If you’re thinking about gamers as a group across device types, what do you think about mobile?
A: We have work as a company to do in mobile. Nobody could look at Microsoft and not see that.
With the Xbox brand, the gamer that we have gaming with us and the content that we have, the closest adjacency I see is PC desktop.
When we go and talk to our customers about where else they play, and what games they play, the logical extension of us today is from television to expanding to television and PC. In the long run, we want Xbox Live to be anywhere somebody wants to play.
I don’t know that I’m going to be driving 4K (resolution) “Forza” on my phone any time soon, but our long-term strategy definitely will include mobile, tablet, touch, phone.
Q: So mobile’s not the immediate priority if you’re moving to adjacent markets.
A: Obviously we have “Minecraft.” It’s huge in mobile.
And I love the fact that mobile brings in more and more gamers. Actually when I flew down here, the lady next to me was playing “Candy Crush” kind of the whole time. And she didn’t consider herself a gamer, yet she played games for two hours on a flight down.
It is critical for us as a company that we’re strong in mobile, and (in) gaming, we’ve gotta be there.
Q: Setting aside augmented reality and HoloLens, how do you characterize your work in virtual reality?
A: We want to make sure Windows 10 is absolutely the best platform for VR development. For the devices that are being created, Oculus, HTC with Valve, we want to make sure those devices seamlessly plug into Windows, instantly light up and are usable. We are the foundational platform.
We have “Minecraft” that we are out there showing people, which is our first-party property.
Experiences are still what we need in VR. Maybe “Minecraft” will be it. We’ll see, but we don’t yet have the thing that everybody who puts on goggles and grabs a controller and says, “Wow, I can’t live without doing this.”
Q: Video gaming seems like the rare area of consumer technology where Microsoft missed out on because of a lack of focus on the PC. What happened?
A: It’s maybe not our proudest moment. There was a strategy, that this was at a time when PC retail was going away. Sony was making progress, as was Nintendo, in the family room with consoles, and we were figuring out how do we make sure the family room isn’t lost to Microsoft. And the answer was we need to create a gaming console.
The company’s muscle was put behind making sure that Xbox gaming was successful, and I’m proud of where we are, what, 15 years later. But we didn’t have dual focus on also keeping PC gaming.
It’s not that we completely forgot about it. But you saw people like Valve step into a vacuum and create Steam. And I’m grateful to them. Valve was there with their store to really keep the fire burning.
Now I’m in the Windows division. I happen to be the head of Xbox. I believe that having a strong gaming ecosystem on Windows that Microsoft is a participant, and diligent shepherd as the platform owner, is important.
Q: Microsoft switched the key metric for Xbox from console sales to Xbox Live monthly active users. If widgets sold isn’t the metric, what else is in your top five in evaluating the health of the business?
A: Engaged developers is something I look at.
The diversity of what people are doing on our platform. If we have 48 million monthly active users and they’re all playing one game, that doesn’t really feel like a very healthy ecosystem. So the fact that today I see a lot of diversity in what people are doing and where they’re spending their time is a real health.
I look at geography, where we’re strong, areas where we can improve. I look at demographic data, young, old, male, female. We still have a lot of work to do, but I think we’d surprise a lot of people on the breadth that we have there. Things like “Minecraft” obviously help incredibly.
But that’s a focus for us, how do we make sure we’ve got content that’s relevant to everybody in the household.