Microsoft: Xbox Consoles Have Become the Cornerstone And The Foundation of Our Strategy Going Forward

Aernout van de Velde
xbox consoles stuart consoles

For years, many have been talking about the end of game console cycles, but according to Microsoft, Xbox consoles have actually become the foundation and cornerstone of its strategy going forward.

Will this console generation be the last console cycle as we come to know it? This is the question that many have been asking for quite some time now. Many expected the last-gen consoles to be the last true console cycle, especially with Microsoft heavily investing in the cloud and its game subscription service, Xbox Game Pass. These expectations proved to be wrong when Microsoft announced the Xbox Series X. Will Microsoft release another console after this generation? This remains speculation for now, but at this year’s Barclays 2020 Global Technology, Media and Telecommunications Conference, Microsoft might have provided about what’s to come.

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When asked about consoles in the future, Xbox Chief Financial Officer Tim Stuart said that physical Xbox consoles have become really important for Microsoft’s business model, with the console having become a piece of the puzzle of the company's strategy.

“I think over the 20 years that I've been here we've sort of said this is the last console generation for a while”, the Xbox CFO said. “But really, what it turns into is the console becomes the cornerstone and the foundation of our strategy. The console has a world where 3,000 games work on the console. And to Catherine's point, you can lift and shift those teams into xCloud. You can stream them out of the gate.”

“You can put them in our Azure data centers, reach 90% of the world's gamers with the geo footprint we have because of that strengthened console. Having that content pipeline, which I know we'll talk about in a second, having games built, having the community of players there. That console piece of the business is so important to have out of the gate, which we're very, very excited about.”

The Xbox executive acknowledged that this generation is different compared to previous generations, which reflects in the way Microsoft approaches its console exclusives.

“But yes, it's a very different cycle. One of the things I'd highlight here, too, but some of the differences is when this time around, we think about console as a piece of the puzzle as opposed to the puzzle. We're not doing things like making Halo Infinite exclusive to the next-gen consoles, but doing things like making our controllers exclusive to these generational consoles, which really puts the user at the center.”

He continued, “we think about an ecosystem, not unlike Netflix talks about subscribers or Facebook talks about monthly active users. We think about that ecosystem and that community of users, of which console is important, but growth at Microsoft and growth in this category is all about PC. It's all about mobile. It's all about geo expansion.”

“How do you get in Africa and India? How do you create new business models? Console helps us establish that and console is so important for us to win in, but that really creates that foundation of where we're going.”

Stuart’s answer is quite lengthy, but interesting nonetheless and might provide a hint as to how Microsoft sees the future of consoles.

Do you expect another Xbox console down the road? How long will this generation last? Hit the comments down below.

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