Microsoft Corporation no longer sees the cleavage between games on the Xbox One and those on the PC. That’s the lofty rhetoric of Phil Spencer, the head of the firm’s Xbox segment, and the man in charge of pulling it back from the brink of complete failure. The idea could change the nature of the Xbox One VS PS4 battle for good.
The Xbox One will soon get its own install of Windows 10, and Mr. Spencer is selling the move as a unifying force for gaming. In a recent interview with Polygon Mr. Spencer said “Windows itself will be a critical component to the success I think we can realize of Xbox itself — and gaming will be a critical component of the success of Windows.”
Xbox One VS PS4 gets weird
Sony Corp (ADR) is, if Schiller’s idea pervades Microsoft, now competing with both Windows 10 and Xbox One in the Xbox One battle. That would, with 45m copies of Windows 10 now running, put Microsoft way ahead of Sony’s paltry 24m PS4 sales. It’s clear to any gamer following the Xbox One VS PS4 contest that that comparison doesn’t make any sense.
It appears, however, that Microsoft will try to blur the lines between gaming on the Xbox One and Windows 10 in the coming months. The firm already has a cross-play feature that allows users to play Xbox One games on their PC, and it’s dead set on bringing mods, long a PC-only feature, to consoles with the launch of Fallout 4 later this year.
Mr. Spencer says that he has a say in the way that Windows works and that gaming at Microsoft is becoming a more unified whole. That may sound good to some gamers, but it’s not the kind of thing that will keep everyone happy.
Microsoft connects its worst products
Schiller’s idea of, to borrow a phrase from the 1957 Treaty of Rome, and “ever closer union” between the Xbox One and Windows 10 may seem like a nightmare to those with shares.
The firm has performed poorly in the run up to the release of Windows 10 because there’s little chance of a real profit from it, though there is some dissent on Wall Street about whether that’s true.
Heather Bellini of Goldman Sachs is one of the most vocal critics of Microsoft’s Windows 10 tactics. In an April report she said shares in Staya Nadella’s firm would fall to $38 within twelve months as Window 10 fails to bring the sales that traders are looking for.
Walter Pritchard of Citigroup said earlier this year that success in Windows 10 could lead Microsoft to focus on products that were bad for the firm, like Surface and Windows Phone. He didn’t include Xbox in his outlook for the firm, but we all know how investors feel about that lossy business.
Many on Wall Street already dislike the idea that Windows 10 might succeed and define Microsoft . If, in Spencer’s words, the Xbox becomes a “critical component of the success of Windows” that feeling is likely to strengthen. The Xbox One VS PS4 battle is the last thing on the minds of traders.
Xbox One VS PS4 is all that matters
Despite Spencer’s focus on the PC, gamers that care about the Xbox One VS PS4 dynamic aren’t going to be swayed one way or the other by his insistence that there’s little difference between the PC and the Xbox One. There really is a difference. If there weren’t Microsoft wouldn’t be able to sell its consoles at all.
Gaming costs much less on the PC compared to the Xbox One and PS4, and there’s a much wider range of titles available to choose from. Those who love the coming backward compatibility of the Xbox One should look into Windows, which runs just about any PC game from the last 30 years.
There’s very clear reasons why Microsoft doesn’t want the Xbox One to become closer to the PC. PC gaming, though it used to be a draw for the firm, makes very little money, and it’s not likely to start doing so any time soon.
On the other hand, Windows 10 is looking a lot more like the Xbox One. The platform is much more about tracking users and keeping them in a closed box than any other OS from Redmond. The firm might wish it could charge users a monthly fee to go online, as it does with the Xbox One. That idea probably didn’t pass the focus group stage.
Spencer’s job is to improve the Xbox One VS PS4 sales numbers. It seems he’s made the contrast between the two a little bit kinder, despite the snowball effect clear in Sony’s recent content deals, but his recent link between Xbox One and Windows 10 is a sales pitch for the former, rather than a true change in strategy at Microsoft.
Counting gaming at Microsoft
Microsoft makes very little money from PC gaming. The firm doesn’t control who published for windows, and it’s not able to garner a cash stream from sales of games on the platform. This is very different in the Xbox One VS PS4 sphere. Both Sony and Microsoft collect royalties for simply letting third parties publish on their systems.
If Microsoft really wanted to make the Xbox One and Windows 10 the same, it could allow users to install a full copy of the OS on their console, download Steam, and start playing in the same way they do on the PC.
Mr. Spencer isn’t going to let that happen, because hardware sales, and Xbox software royalties, would simply plummet. He doesn’t want the PC and the Xbox One to get closer, he wants more people to buy the Xbox One. That’s the key metric by which his performance at Microsoft will be judged.
That doesn’t mean the move is bad for gamers. Some prefer to stick to console rather than PC because of ease of use and embroil themselves in the Xbox One VS PS4 console war.
Those with an Xbox One, or those planning to buy one, can only gain from the new features that Mr. Spencer has brought to the platform, and they’re likely to love the coming together of Xbox and windows 10.
It might even improve the Xbox One VS PS4 ratio that has hounded Microsoft since the awful launch of its console in 2013.
That doesn’t mean that Wall Street is going to be happy with the business. Many research houses are now turning against Windows 10, and urging a focus on cloud software. It seems that more and more of Microsoft’s public face is becoming a liability in the market’s eyes, and Phil Spencer is going to have a hard time fixing that.