The launch of the new series of Xbox consoles is actually unlike any other console launch in the industry’s history, mostly because the new Microsoft machines are so alike the old ones.
In February, I wrote that the Xbox Series consoles will be more like iPhones, how the new machines are basically quality of life upgrades and not a brand new experience, and that comparison has held. Anyone lucky enough to purchase the fast-selling Series X or S consoles will see that the user experience is almost exactly the same as the old Xbox. Like upgrading to a new iPhone, there’s no need to keep the older machine around when the new one is the same thing and more. Then, when Microsoft announced console prices, the company also announced a payment plan for the new consoles, again much like how one would pay off a new smartphone.
This all-access payment plan strategy worked for T-Mobile, which very nearly abandoned the mobile phone market before initiating a dramatic turnaround in 2012, eventually growing large enough to buy Sprint and become a major player. So it’s no surprise that Microsoft wanted to hire Sarah Bond, who held a variety of senior roles at T-Mobile and helped increase its subscriber base by the tens of millions. Now, as corporate vice president of gaming ecosystem at Microsoft, she sees much overlap and many key differences.
Bond said T-Mobile’s “equipment installment plan” dramatically opened doors for the telecommunications company, and hopes for similar growth in the console space once price barriers are reduced. By opening more doors into the Xbox ecosystem, the company can better capitalize on its player base through its subscription services.
Xbox currently offers an “All-Access” package that includes a subscription to its online services, as well as the popular Xbox Game Pass, the Netflix-like service that provides a buffet of titles for download as long as the subscription lasts. That’s the similarity to the cellphone plan, but it’s not exactly similar.
“The biggest difference now is that we’re running a platform,” Bond tells The Washington Post. “So everything we do, we put the player at the center, but we also want to make sure that we’re creating more opportunity for our developers to be successful. … The way we approached it was really fundamentally different by connecting our subscription to our store so they’re completely linked. If you compare us to Netflix, if you want to buy a show off Netflix, how do you do it?”
Part of running a subscriber-based service is not just building an audience of millions, but keeping them subscribed. Bond says that’s why Xbox is offering a multiplatform strategy, as well as making two different versions of the new Xbox. Microsoft announced that Xbox Game Pass had passed 15 million subscribers in September, and that number is expected to grow as more people eventually get a hold of the new Xbox consoles, or get wind of the Xbox Game Pass streaming service for Android phones, where users can play almost the same library of games streamed via a phone app.
“Content, community and cloud are going to be the three things that come together in the next generation,” Bond said. “When you look at a player’s behavior, people want to be able to play their games anywhere they want, and you want to be able to play with friends in the way that they want.”
Xbox CEO Phil Spencer has said that in the long term, he expects the smaller, $300 Series S machine to outperform its bigger, $500 Series X sibling. For now, early adopters seemed to have taken to the more powerful machine anyway. This doesn’t surprise Bond, who saw similar behavior with smartphones.
“When we launched the iPhone at T-Mobile with the equipment installment plan, many of our customers at the time were subprime, and we were anticipating that people were going to go for the smaller iPhone,” Bond said. “What we actually saw was that people shifted almost immediately to the biggest iPhone they could get because it was suddenly affordable. It’s quite obvious to us now, but at the time we were stunned!”
Moving beyond the console space makes sense when you look at trends. Currently the largest console platform customer base is the PlayStation 4 with more than 100 million users. However, there are more than 3 billion gamers on the planet, and Microsoft hopes to expand its player base by drawing some of those billions into its ecosystem.
“We look at that and wonder, why is that and how can we make the console experience easier to get into, or how can you extend it like what we’ve done with xCloud [the former name of the Xbox Game Pass streaming service],” Bond said. “When you look at what we’ve done with Game Pass, we’re making it easy for you to get into the ecosystem and start playing.”