“That’s not the feedback we’re getting right now,” Spencer said in an interview with Bloomberg News shortly after the company hosted its annual Xbox Games Showcase on Sunday in Los Angeles. “Right now, we’re pretty set on the hardware we have.”
At the event, the company announced a new version of its current Xbox Series S with improved storage. It also addressed shortages of the console’s higher-powered cousin, the Series X, saying it had “significantly increased” supplies.
Video game console makers typically release major upgrades about three years into a gaming machines’ life. The Xbox Series S and X, were released in 2020 as part of the ninth generation of video game consoles. They compete against Sony Group Corp.’s PlayStation 5.
Today, the rate at which console developers are able to capitalise on improvements in hardware is slower, allowing for more incremental advancements, than leaps in technology. For example, 8K technology is not as in-demand as 4K, because some consumers can’t tell the difference and cutting-edge hardware is expensive.
Spencer said the Xbox console is in “third place” behind Nintendo’s Switch and Sony’s PlayStation. Microsoft has increasingly diversified its game delivery strategy, making titles available through its PC gaming app and Game Pass subscription service.
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Spencer says his goal is for the players’ wishes to help him determine product development. For example, Xbox didn’t see a need to release products tied to nonfungible tokens or blockchain gaming, trends viewed with skepticism in the gaming community. “We didn’t go off and start building a bunch of NFT games or blockchain games,” Spencer said. “I just want to make sure that the games are led by the experience that the player feels and nothing else.”
Xbox has faced scrutiny from fans skeptical of the company’s ability to successfully develop games in house. In May, its subsidiary Arkane released Redfall, a critically-panned first-person shooter game that suffered development challenges. Spencer had said he was “disappointed” in the release. On Sunday, Xbox showcased 13 new games from its own studios, spending 40 minutes alone on Starfield, which is being developed by its Bethesda Softworks division.
Spencer says his team has not stepped in to interfere with Starfield’s development and trusts the studio, which is behind the critically-acclaimed Elder Scrolls games. He would prefer to help studios “realize their vision” than “come into a team and tell them how to make their game better.”
Microsoft is trying execute its potentially biggest gaming deal yet, a $69 billion acquisition of Activision Blizzard Inc. The UK’s Competition and Markets Authority has blocked the deal over concerns about potential dominance in the cloud gaming market and the US Federal Trade Commission has sued to stop it. Microsoft is appealing the UK decision.
Spencer declined to comment on whether the company would pull its business out of the UK as a result of the ruling there. “We would love to find a solution,” he said.
Microsoft has made several deals to provide content and services to cloud gaming providers, including competitor Nvidia Corp. On Sunday, at the games showcase, Microsoft said it would make some of its PC Game Pass titles available on Nvidia’s rival GeForce Now subscription service.
Spencer said cloud gaming is not a separate market from consoles. He said he considers it “additive.”
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