In this week’s DF Direct Weekly, the Digital Foundry Team shares their thoughts on the Xbox business update podcast and attempts to fathom strategy from the PlayStation team in the wake of some ominous announcements that resulted in a 10 percentage point dip in Sony’s share price. The bottom line looks stark and very straightforward: the audience for PlayStation and Xbox consoles is not increasing gen-on-gen, while the costs of making games to service that audience is increasing dramatically. Something has to change.
Let’s deal with the Xbox business update first. My take on this is that Phil Spencer and his team really want to take a multi-platform strategy forward, and it’s the obvious, logical solution to addressing the problem of the limit in total addressable audience. Not only that, with its ownership of Minecraft and now Activision-Blizzard-King, it’s already one of the largest multi-platform publishers in the market. I can well imagine that the likes of Satya Nadella can’t quite fathom why Microsoft is limiting its audience in the name of a legacy console model that seemingly isn’t working for Xbox any more.
However, the pitfalls are obvious. Why buy an Xbox console if you can buy a PlayStation and get access to the next games from both platform holders? This concept of exclusivity as ‘specialness’ clearly resounds with the console audience, and I would imagine that the Xbox team spent a great deal of time honing its message for the business update because if the rumours were left unchecked, we could have been looking at another PR disaster on the level of the Xbox One debacle from 2013. On a more practical level, Microsoft does need to continue to make its consoles attractive, even in the wake of its ‘every screen is an Xbox’ messaging. A mechanism to make console sales attractive is required because – in the face of a less than stellar response from Game Pass PC – a home platform is required on which to focus its drive for subscriptions.
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