Xbox has been turning a lot of heads by announcing new subscription services like Game Pass and putting its first-party games on other platforms. Some might see this as a detriment to Microsoft's console business, but Xbox boss Phil Spencer says the business isn't even in hardware.
"The business is selling software and services. The business is not how many consoles you sell," Spencer says in an interview with Kotaku. "The consoles are not where the profit in this side of the business is made, which is where the whole: 'Who's selling more consoes' at any one time as the kind of root good of who is doing well in the business is just not true."
Xbox seems to be taking a software approach, especially in the last few years, as it pushes its services like Game Pass and Xbox Live as its primary products. First-party Xbox Studio games are available on Game Pass day one, and smaller Xbox exclusives like Cuphead were released on the Nintendo Switch along with Xbox Live support. Microsoft is also acquiring many more studios to help support both of those software services.
But that doesn't mean Microsoft is abandoning its Xbox console anytime soon, or that it will become a developer-only studio that releases its games on the PS4. At E3 2019 Spencer announced Project Scarlett, the next-gen Xbox console. And later in the interview Spencer reiterates the value of having a native platform for its services.
"So, today, people are saying: 'Are you going third party?' Whatever that means. But the idea that we are a platform company continues to be true, and we think about how that platform infrastructure could grow. And we think having the world's most powerful console, having a great Xbox in the home, is a critical component of that."
It seems that Spencer is saying that Xbox can now be considered a network of platforms that range from physical hardware consoles, to services available on PC. And with xCloud that network will grow to include mobile devices as well. But all the games and subscriptions will still be considered part of an Xbox platform.
We'll have to see how far this network will extend when Scarlett comes out in holiday 2020. For more news, check out our Microsoft E3 recap.