Ahead of the launch of its Series X console, the Microsoft-owned gaming giant is planning to go bigger, as the tussle for market supremacy moves beyond the hardware and into the world of streaming; the competition is changing too.
Gaming is changing radically, incorporating ideas like cloud computing (and its oft-ignored but crucially important cousin edge computing) and a streaming package paid for with a subscription, rather than one-off purchases. The latter of these is already operational, with Xbox Game Pass a subscription to a range of games accessible on Xbox One and Windows 10 machines.
It reflects a significant shift away from what had traditionally been a hardware arms race, struck through with the frisson of publisher relationships. In an in-depth piece from Polygon, which you can read here, these issues are dissected in a fascinating read.
The topline is, simply, that gaming’s deep and shifting currents are less about what people play than how they play.
Despite the many players who have had a multi-decade relationship with the brand, for many younger players – influenced by the platform agnostic Fortnite or Player Unknown Battlegrounds – mobility is key. They’re just as, if not more likely to pick up a mobile as they are a controller. It’s the insight undergirding big bets elsewhere: just look to Jeffrey Katzenberg’s Quibi.
However, it gets a little more complicated. Younger generations rarely rule the roost, but they do rule their mobiles. Just under a quarter of all people who play games do so on consoles, according to GWI. That’s still a huge number, as according to the same research, 86% of internet users play games.
Xbox boss, Phil Spencer agrees, telling a gaming podcast how the console would remain “the best way for me to play on my television, to download and play on a native device. But sometimes I’m not in front of my television ... and that’s our bet on the cloud.” It’s also a bet on people unable to buy an Xbox, but could afford a subscription to its games. Or the investment is time: you want to play FIFA every now and then, but not enough to have a three-figure console on your shelf.
That headroom question looms large, and Microsoft’s big cloud computing business puts it in a strong position with pedigree in gaming, too. It’s this pedigree, and marquee brands like Halo that deploy a network effect, bringing people in, especially for multiplayer experiences.
However, very little of this is tried and tested. Cloud computing requires expensive amounts of power, and if it does indeed take off, it will mean that Microsoft is shouldering big costs too.
What it means, at the level beyond Microsoft’s internal machinations, is that the opportunities for getting involved will only expand. As Spencer has noted, “our view is that there’s not one business model to rule them all”. At an industry level, things are going to be different, and it should be welcomed, the industry ought to “embrace monetization dexterity.”
Sourced from Polygon, WARC