With the launch of the Xbox Series X this holiday — Microsoft’s fourth major console launch over two decades — Xbox head Phil Spencer and his team are taking a very different approach to ushering in a new generation of game devices. Unlike the more traditional hard breaks between previous Xbox generations, where customers bought a new console and a rash of new games to play on it, Microsoft’s next generational jump will be soft. There’s the promise of backward compatibility with three previous Xbox consoles, 100-plus titles playable on day one to Xbox Game Pass subscribers, and the option to play Xbox games old and new from the cloud on phones and tablets.
Even the games coming to Xbox Series X from Microsoft’s internal game studios will also be on the Xbox One for the next “couple years,” Spencer has said. It’s a very different strategy from the more traditional path chosen by Xbox’s chief rival, PlayStation. “And I think multiple strategies can succeed,” Spencer said.
We’ll get a more in-depth look at Microsoft’s strategy this week with a new Xbox Series X Game Showcase on Thursday, July 23, when the company will focus on the most important component of any platform: the games.
In an interview with Polygon, Spencer said Microsoft is focused on providing players with choice, and following an upgrade model similar to the ones for PCs, phones, and televisions — upgrades that console owners are comfortable with.
“I think the fundamental difference is that we’re trying to grow an Xbox ecosystem,” Spencer said. “We’re trying to build that around the player and give the player choice. If they choose to play on their television on a console, we want to have absolutely the best console experience. And I think we have that.”
Not every family will be in a financial position to spend or want to spend hundreds of dollars on a new console this year, Spencer said.
“I think what you see is us challenging some of what I will say are the financial tropes or financial historicals of the console business,” Spencer said. “Because I don’t think everybody should have to go buy a new collection of games when they buy a new console. I just fundamentally don’t believe that. I think you should have games that look great on that new console. But you shouldn’t have to go buy all-new games to go play on that console. I think if I make a purchase on Xbox One — I believed this even in the 360 days, even though we didn’t do it at the launch of Xbox One — it should continue to work as I move up in the hardware [cycle].”
The Xbox Series X will also launch with a major investment in game studios from Microsoft. Over the past two years, the company has added Ninja Theory, Obsidian Entertainment, Undead Labs, InXile Entertainment, and others to its internal stable. It spun up a new studio, The Initiative, to create something still unannounced. It also has the likes of Rare, 343 Industries, and Turn 10 Studios developing original and franchise games for Xbox and PC. The result of that growth is “the most diverse collection of first-party games that we’ve ever had,” Spencer said.
“I honestly think we’re in the best launch lineup position that we’ve ever been on Xbox,” Spencer said. “When I think about the strength and depth of the games that people are going to be able to play day one on Xbox Series X — not only because of [backward compatibility] — and the way that Game Pass really allows the total cost of ownership of our console, I think is a real strength.
“But you know, we also have Halo. The last time we had Halo at the launch of a console was 2001. And we feel really good about Halo. It’ll be a big part in the [Xbox Series X Game Showcase on July 23].”
Spencer didn’t offer much in the way of details on the next Halo game — it’s said to be a major focus of Microsoft’s game showcase this week — but he did offer an intriguing hint about Halo Infinite’s “structure” and some lessons learned from Halo: The Master Chief Collection, the six-game compilation that’s still rolling out new games on PC.
“There’s been a ton of learning in the studio around what does it mean to actually have a collection, the kind of totality of the Halo lore and stories and experience inside of one Halo world, one Halo UI, and platform,” Spencer said. “As 343 has gone through this journey, they’ve seen some of the benefits of not requiring that our customers make a decision between ‘Do I want to play this one or that one?’ I feel like in a way, the games almost compete with each other. You see that with some of the annualized franchises that are out there — which, clearly, Halo’s not annualized — but you see that where you spend a lot of energy actually trying to move the customers who are already playing your game to a new version of your game. I think as gaming has evolved, there’s a view of ‘our customers are our customers and we should respect them where they are.’ It’s similar to our Xbox message, and I think you’ll see that in terms of the way Infinite is talked about — even the structure of what the game is itself.”
Beyond Halo — and presumably more Gears, more Forza, and more Minecraft — Xbox Game Studios head Matt Booty told Polygon that games from studios like Double Fine, Obsidian, and Compulsion Games will bring a diverse slate of ideas to Xbox’s first-party lineup. Booty said Microsoft looked to three things when deciding which teams to acquire to bolster Xbox Game Studios: “People — people that we knew and we’ve worked with before; teams — teams that have stuck together, and have been through some good times and some adverse times; and then, ideas, in terms of a steady flow of new things that we could bring to our players.”
What’s more, those games should represent not just a diversity of ideas, but the diversity of creators and a diversity of the audience that plays games, Booty said.
“We are also always on the lookout to try to build relationships with studios that are founded and run by people that are different than what we’ve had in the industry for the last couple of decades,” Booty said. “I’m very proud of the fact that Minecraft is run by a woman, Helen Chiang. My particular leadership team of looking across the studios has got people like Bonnie Ross. It’s got Shannon Loftis, running Age of Empires. You know Ninja Theory, founded by Nina [Kristensen]. ...
“Obviously, there’s more that we can do. I think you’ll see some of the titles that we’ve got in our showcase coming up hopefully represent work that we’re trying to do there to bring in different groups and really represent them with respect. And I think it’s important that we do that, because that’s how people will come into the industry, right? People that have maybe felt that the game industry is closed and not for them, they need to see themselves in the content, because that telegraphs that, ‘Look, this is a place for you. We want your ideas. We want your voice. Come join us in making these games and not just playing them.’”
Even for a veteran studio like Banjo-Kazooie and Sea of Thieves developer Rare, the driving force is new ideas. Rare’s next game, Everwild, will build on ideas and development experiences the studio learned during the creation of Sea of Thieves, a game that launched still in development on Xbox One and Windows PC, and has since found a larger audience with Game Pass subscribers and players on Steam.
“I think we’re definitely idea-first,” Rare studio head Craig Duncan told Polygon. “We will bet and incubate and nurture the idea we think is great, and then we’ll assume that all the business side of it will figure itself out as we go.
“I remember our first thousand players sailing in Sea of Thieves. Then that became 100,000. Then it became millions. Then it became a monthly update [for] 12 months. Sea of Thieves organically grew with our players, and I think that suits Rare as a model — particularly if you’re making a game where players have to get can imprint themselves onto it.”
Sea of Thieves’ “very open development model” philosophy and an ever-evolving cooperative world is something that seems will carry over to Everwild, which Duncan described as “very unique.”
“We learned a lot from Sea of Thieves,” Duncan said. “At its heart, we love the idea of Sea of Thieves [and] players creating stories together. I think with Everwild, Louise [O’Connor] and her leadership team are really passionate about giving players a world that they can just lose themselves in — you know, a lot of nature feels magical. So the notion of, ‘What does it mean to nurture a world? What does it mean to be in nature?’ Part of the reason we haven’t talked a lot about Everwild is because we’re still feeling a lot of these things out. We’re still playing around with gameplay ideas. We’ll have plenty to say in the future on that, but ... we have an idea we feel really passionate about, and we think there’s something special. I have a team of people that wake up every morning with the desire to make this game that they’re really, really passionate about.”
Microsoft hasn’t said much about what’s coming from The Initiative, the studio it established in Santa Monica, California — not far from Treyarch, Naughty Dog, Sony Santa Monica, Electronic Arts in LA, and others — in 2018. But Xbox Game Studios head Matt Booty said, “I think people are going to be pretty excited when we start to talk about what’s going on there.”
“We’ve got things like Halo and Minecraft and Forza, Gears of War, Age of Empires, Flight Sim,” Booty explained. “In many cases, these are franchises that are a decade or more established, which is fantastic. A big franchise like that comes with its own things that you can do. There’s a lot of room within a big world to innovate on its own. But it’s a separate thing when you think about how you manage that production. And then we’ve got some of the studios that we’ve acquired that came with their own culture. And when we think about — how are we going to keep ourselves from sitting still, and how are we going to kind of mix things up a little bit?
“We had a unique opportunity with The Initiative that Darrell Gallagher, who’s obviously had a lot of success in the industry [at Crystal Dynamics, Square Enix, and Activision], became available. And we thought, where can we build the studio, which we haven’t done in a while? And how would this work? [...] And what does it mean to build a studio in a location that we really haven’t had a presence? I think you’ve seen some of the hires that Darrell’s made, where there’s just a lot of activity in that area where we can hire really great talent. We decided, let’s try something new. We’ve got these big franchises. They sort of have their own way of doing something. We acquired some studios that came with their own culture. How do we start something from ground zero?”
One important factor that will affect Xbox Game Studios’ lineup on Xbox Series X and other platforms is Game Pass, the subscription-based, all-you-can-play service that boasts more than 10 million subscribers. Spencer said Game Pass was built on a plan to “give us a larger creative canvas to build on,” where not every game’s success is measured by how many units it sells.
“We now have a platform that can really support us taking more creative risk,” Spencer said. “I think absolutely there’s an opportunity for us to do that with more franchises, whether it’s ... kind of spinoff genres, or even revisiting things like Flight Sim, and bringing those back. They’re actually part of the same lens for us of, ‘What is it in our portfolio that we have? And what ideas would we either like to go back and revisit, or experiment with more?’
“Game Pass really helps us do that, because you can look at something like [Gears Tactics], and say, ‘Hey, could we make a turn-based strategy game out of Gears? What does the success metric look like for that?’ Your normal process [is] some business people would go off and use Excel and tell you what the average selling number is for a PC turn-based strategy game. You say, ‘OK, and we want to bring that to console.’ So you kind of add those two numbers up and you evaluate it. But now we can say, ‘Well, wait a minute, we have over 10 million subscribers in the subscription. How many of those people will play and get retained and be a part of the subscription?’ It really creates a different way for us to evaluate what games we go off and build, and allows us to do some things that, frankly, we wouldn’t go do if we were just driven by the retail dynamics of the industry.”
That change in evaluation, combined with Xbox games being available on PC, as well as on phones and tablets though Project xCloud, offers Microsoft much more leeway going into a new generation of consoles.
“I don’t think we want a portfolio of any one kind of game,” Spencer said. “We want a breadth of offerings in the portfolio, which is why we’ve been investing in such a diverse slate of games and studios over the last couple of years. And one thing I really noticed on the [July] 23rd show, as I’ve been sitting back and watching the narrative unfold, is it’s got to be the most diverse collection of first-party games that we’ve ever had, when I look at art style and size — I mean from some big, big, big teams and big, bombastic overtures to smaller, more bite-sized things — and I think that’s our strength.”