by Toon_Medic
On February 15, 2024, CEO of XBOX Phil Spencer went on a podcast and announced to the world that they were going to experiment with a multi-platform strategy, in which they would put “just four games” onto other competing platforms like Sony and Nintendo. Being in third place in console sales, XBOX wanted their games to reach as many people as possible, and breaking away from exclusivity gave them that opportunity.
This strategy divided the community. Many gamers, including the media, believed that this strategy would give a financial boost to developers and help the games succeed by reaching as many players as possible. This strategy also poured fuel on the fire that is the console war. Hardcore PlayStation fans were revealing in the fact that XBOX games were coming to their platform. Hardcore XBOX fans were yelling and screaming all over social media about how terrible a decision it was to go multi-platform, with many either moving on to PC or switching their energy toward PlayStation. For better or worse, that was the move that XBOX decided to make. I will argue each point and show that not only was it a poor decision by XBOX, but if they continued down that path, it would have had a negative impact on the gaming industry.
How the Multi-Platform Strategy Damaged the XBOX Brand
Going multi-platform is a great strategy if you are in the business of making money. Putting your games on as many devices as possible will provide more opportunity for revenue, and that is an undisputed fact. Capcom, EA, and Sega are just a few examples of companies that thrive on having their games on every platform. Microsoft is another company that is in the business of making money…a lot of money. With Sony leading by a large margin in the console market, and with Nintendo dominating the handheld market, Microsoft found themselves in the middle, looking for a path that would help them succeed. So, they decided to go a third route in which they would provide great services like XBOX Game Pass, cloud gaming, and XBOX Play Anywhere. Lastly, they would put their first-party games on the other competing platforms, the PlayStation 5 and the Nintendo Switch.
By putting their games on competing platforms, they gave gamers the opportunity to ask the question: why get an XBOX? The PS5 version of Indiana Jones and the Great Circle was announced during the Gamescom Opening Night Live showcase by Geoff Keighley, and that became the headline all over social media instead of it coming to the XBOX Series consoles. Flagship games like Halo, Gears, Fable, and Forza are announced for XBOX, and instead of excitement for them to come to the Series X/S consoles, the excitement is aimed at them coming to PlayStation and PC. Why is this a bad thing? Isn’t it the ultimate goal for these companies to make the most money possible? By being everywhere, these games have the chance to make the most money possible—a winning formula for XBOX, right? Well, not when it comes to brand identity. When you are a first-party company like XBOX, Sony, and Nintendo, not only do you have to make great games that gamers want to play, but you also must convince gamers to buy your console and invest in your ecosystem. The strength of your brand allows you to have a core foundation for financial growth. When XBOX went with a multi-platform strategy, they abandoned the brand by giving gamers the freedom to disassociate themselves with the XBOX brand altogether.
A perfect example is the marketing for the upcoming game Fable. PlayStation does not have an XBOX logo anywhere in the gameplay teaser; you will only see “Wishlist Now for PS5.” Gamers don’t have to even think about XBOX when their games come to the platform of their choice. Not only that, but Phil Spencer also admitted during the ABK case that Sony takes the money they make from sales of XBOX games on their platform to money hat games. To make matters worse, XBOX came out with the infamous “This is an XBOX” and “No console, no problem” marketing blitz, giving gamers even less of a reason to invest in the XBOX console. At this point, it is safe to say that XBOX has put itself into a corner from which it is going to be very difficult to escape. In this economy, if gamers do not need to spend more money than they have to, they simply won’t. A multi-platform strategy only works when each company buys into it. If money was the goal, then why isn’t Mario on PlayStation? Why isn’t Spider-Man on XBOX? Both Sony and Nintendo understand that brand identity is important for long-term success, and it is a committed effort that takes confidence in your product and services, as well as a focus on brand loyalty from your consumer base.
I believe that with the nearly $70 billion purchase of ABK, the new strategy quickly became an aggressive focus on the return on investment (ROI). I believe that Phil Spencer knew that purchasing ABK was too good to give up but did not expect that Amy Hood and Satya Nadella would demand an ROI at an unreasonable pace—which could only occur if you doubled down on being a third-party publisher and put your games everywhere.
The Multi-Platform Strategy and its Casualties
If XBOX wants to dig themselves into a hole that they can’t get out of, how can that possibly hurt the industry, you may ask? Well, when it comes to gaming consoles, you have Sony, XBOX, and Nintendo. Sony and XBOX have similar high-end consoles, and Nintendo has a console/handheld hybrid. If XBOX continues with a multi-platform strategy, their console sales will continue to drop, making it very difficult to continue to invest in new hardware. The path of a multi-platform strategy leads to full third-party publishing. XBOX will become the next SEGA, which was at one point on top of the world in terms of the console market. This would lead to just two companies in the market: Sony and Nintendo. Sony, being the market leader, would no longer have to compete, leading to fewer games per year, as well as potentially higher prices for games and services.
The solution? Exclusivity. Exclusivity solves several problems: it helps build up the brand by making games that gamers want to play and making them come to your ecosystem to play them. Exclusivity is not about taking away games from gamers; it’s about bringing gamers to your ecosystem. With Game Pass, cloud, and PC, XBOX has access to billions of players, even with an exclusive strategy. Exclusivity leads to competition. Competition is excellent for gamers. Competition is where the real value is for gamers, and in this economy, value is more important now than ever—and that is what will heal the industry.
My Advice for the Success of XBOX
The new CEO of XBOX, Asha Sharma, has made a huge splash in the first 100 days in her new role, with many XBOX fans feeling a new surge of energy in the brand. One of the first things Asha did was remove the “This is an XBOX” marketing campaign. She announced that XBOX was going to focus on the console, announced Project Helix, dropped the price of Game Pass to $22.99 after removing day-one Call of Duty from the service, and most importantly, brought exclusives back. In the next 100 days, there will be a reset. As of this writing, there is buzz in the industry that XBOX will be shutting down some smaller studios. The reason why I am writing this piece is because this is not what I wanted to see happen.
My advice for XBOX would be to keep these companies that they are thinking of closing and instead give them realistic budgets for the type of games they are creating. At the end of the day, games are art, and if you want to be in the business of making art, you cannot expect every game to appeal to every gamer. Next, I would immediately drop the price of the Series X/S consoles and provide bundles which include their top games, including Gears of War: E-Day, Forza 6, and Fable. Next, drop the price of Game Pass again by removing Fortnite. Gamers who play Fortnite mainly focus their time and money on the free-to-play ecosystem; they are not going to play any of the other games on Game Pass, which is the whole point of the service. Next, I would release the next-gen XBOX only when it is possible to do so at an affordable price. If you have to delay Helix so that it is affordable, then do it. You can also consider bringing back the XBOX All Access program if you want to release Helix with Game Pass Ultimate at an affordable price for consumers. With the release of Project Helix, I would get rid of charging to play games online and go all-in on the idea of a PC/console hybrid. Finally, expand upon that exclusive strategy that you brought back.
One of the best things Asha Sharma has done was to create XBOX Player Voice. Many people in the media would advise Asha not to listen to the crazy fans. To be fair, you must be a little bit crazy to continue to be an XBOX fan with the poor decisions they have made over the years. Partnering with the community is easier said than done because it will come with a lot of criticism with every move made, but I think that Asha Sharma is more than willing and able to accept that challenge
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