Microsoft’s plan to win the console war: Make everything an Xbox
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“This is an Xbox” declares Microsoft’s (NASDAQ:MSFT) latest ad campaign as it showcases a variety of devices running Xbox games, its latest effort to declare that every screen is now an Xbox.
The tech giant has been trying to expand Xbox to multiple devices for over five years now, as it positions the Xbox brand as a platform to play games anywhere instead of just an Xbox console.
“Whether you have an Xbox console, play on PC, with Samsung Smart TVs, handhelds, mobile phones, Amazon Fire TV, or a Meta Quest headset with Game Pass Ultimate, you can play with Xbox,” the company said in a statement.
“Should Microsoft expand its partnerships to include Chromecast, Roku, Apple TV, and other television operating systems, it should expand its addressable market to over 1 billion households from fewer than 300 million now,” said Wedbush analyst Michael Pachter.
“I think this is highly likely to occur, and expect Microsoft to expand its subscriber base to 200 million within 10 years,” said Pachter.
Can Xbox Catch Up?
Microsoft’s (MSFT) latest Xbox Series S and X consoles still lag Sony (SONY) and Nintendo (OTCPK:NTDOF) in sales numbers.
The company’s much hyped Xbox Game Pass Subscription service has a target of 100 million subscribers by 2030, but it last announced numbers in 2022 when the service hit 25 million users.
According to an IGN report, Game Pass had 33 million subscribers at the end of 2023, representing growth of 13%, down from 15% in 2022.
Mobile Dreams
A big part of Microsoft’s (MSFT) “Xbox everywhere” strategy is a mobile Xbox store. The company has been hinting at a “next-generation” for years, with its acquisition of $68.7 billion acquisition of Activision Blizzard only adding fuel to the fire.
Activision Blizzard library consists of mobile heavy hitters like Candy Crush and Call of Duty, which could help the company draw away users from Apple (AAPL) App Store and Google’s (GOOG) (GOOGL) Play Store.
But the company’s efforts seem to have been stymied by the dominant app stores’ policies, on pause until regulatory cases involving the two stores work their way through courts in various countries.
No More Exclusives?
Microsoft (MSFT) has also released some of its games on Sony’s (SONY) PlayStation and Nintendo’s (OTCPK:NTDOF) Switch consoles, a rather controversial move for diehard Xbox fans.
Console makers often release games exclusive to their platforms to entice consumers to choose their devices.
In an interview with Bloomberg, Xbox chief and self-declared gamer Phil Spencer said that he was pleased with the results. “I do not see sort of red lines in our portfolio that say ‘thou must not,'” he said.
“To reach new players, we need to be creative and adaptive of new business models, new devices, new ways of access. We’re not going to grow the market with $1,000 consoles,” Spencer said.