Microsoft may leave the Video Game Hardware business...or not

Stream of consciousness thoughts here: Microsoft's Gaming Division is laying the groundwork to absolutely leave the home video game console market. They likely will not leave it in a fantastic implosion like Sega did in 2001, but they are clearly spooling down. First, I will take my own experience: I owned an Xbox One for about…8 months in 2018 to 2019. I bought it off my friend just to play Halo 5: Guardians and Halo: ODST, and then never turned it back on. When it was time for me to move from Texas to Illinois, I sold it without a second thought. To note, Halo 5 is a pretty not great Halo game, but that’s a different matter for a different day. I am aware that both the Xbox Series X and Series S exist, but never in my mind has it passed by for me to buy either of them. Why should I? Xbox Game Pass exists and once a year I pay all of $10 (or now, $15) for a month, try out one game, and immediately unsubscribe from it. It’s a very cheap, and likely to Microsoft, completely unsustainable way to do business in terms of buying and trying video games. Microsoft has also stopped being so close to the chest about console exclusives for a while now. If you want an Xbox exclusive to play on your PS5 or PC, just wait a couple of months and it will be there as an option for you. Do not get me wrong, I am no Sony or Nintendo “fanboi”. I have a PS5, but it sits there and collects its decent share of dust for months at a time. The Switch does get regular play though, phenomenal piece of outdated hardware that it is.

Briefly, I think this has a lot to do with the Activision/Blizzard and Microsoft deal. MS Gaming Division spent well over $70 BILLION dollars on this merger deal. That’s also not including overhead costs like lawyers’ fees, flights to international courts, etc. For a company valued at $3 Trillion, you would think that would be a drop in the bucket. It sort of is, in the grand scheme of things? It’s 3% of the entire company’s evaluation. Well, to be extremely reductive, spending 3% of the largest company in the world’s valuation on “the Call of Duty people” probably did not make a lot of certain executives happy. They have the panopticon on them, now. With that merger came the layoffs (1900 people, or more) and some studio closures (Arkane Austion, Tango games very briefly, etc), because apparently they need to save money? That’s bullshit, but it’s another topic for another day.

Slightly more importantly to this whole thought, no one in large quantities is buying their present console, the Xbox Series X/S. The PS5 is outselling them by an order of 2 to 1. The Nintendo Switch is in its own galaxy outselling them 5 to 1. Microsoft’s console gaming division simply “exists” and more and more people are deciding that the hardware isn’t worth the cost. I recall hearing several Youtubers back in the day saying that “console gaming is over” and “The PS4 will be the last console” since around 2012 or so. I never believed any of that because the general gaming populace does want a video game console underneath their TV to put some form of media into to turn on and play. Obviously, the Nintendo Switch proves this in spades, and it being completely portable helps that immensely. There are not a lot of fundamental, under the hood differences between a PS5 and XBXSX, so the question always becomes “which one will have the most diverse and interesting games for it”? There aren’t a lot, do be sure. The list of PS5 exclusive games is anemic (the entire list of 20 or less games is here: https://en.wikipedia.org/wiki/Category:PlayStation_5-only_games), but the ecosystem to play them is more sound. There is no “Game Pass” equivalent on Sony’s side. If you want to play a Sony PlayStation 5 game, you buy it on their console, or wait one to two years for it to maybe get a PC release. Waiting one to two years is not an option for people that want to play a certain game, like Final Fantasy 7: Rebirth, for example. So, they pay $500 and away they go. It’s a tall order, but if even if you do have a gaming PC it’s the quickest and most accessible option to play those games. Vice versa, if you have a gaming PC, you are sort of burning cash buying an Xbox Series X. The games typically release day of date for the console and PC, so just most are just getting it there.

Microsoft is not a stupid company, mind you reader. They are perfectly aware of this. They have a new marketing campaign saying, “Your smartphone is an Xbox” and “Your PC is an Xbox”. It’s…something. To me, it feels like they are softening the blow for when they finally announce they will no longer release a home console. I think they have one more in them. Maybe. Hell, there is a real possibility that Microsoft will release a portable gaming device like a Switch or Steam Deck. Phil Spencer has spent month on Twitter hinting at it. Is that their future? Eh, even in that end I am skeptical. Microsoft has a scarred and awful history releasing portable devices to mass market appeal (Zune, Windows Phone, presently the Surface, etc). I think they just want to be a publisher and to just simply leave gaming hardware because it’s way too expensive and way too finicky. One bad event in 2013 for the Xbox One basically torpedoed the “brand” forever and they are still trying to recover from it, weirdly. They are the most faceless of faceless corporations, and they just want to make money. They is no money in constantly coming in a distant third place.