While on stage at the Barclays Global Technology, Media, and Telecommunications Conference in San Francisco this week, Xbox’s Phil Spencer talked more about Microsoft’s Project xCloud, its new initiative that will combine subscription-based Game Pass with xCloud, and how that will help it reach users on “over a billion Android phones.”
The move comes in the wake of his continued success following his promotion to the Head of Xbox and the division making more than $10 billion in revenue for the first time during the fiscal year for 2018. Spencer said (via CNBC) that since the revenue for gaming has increased, CFO Amy Hood has told him that he’s “made the spreadsheet” and that “she’s going to pay attention.”
“We’ve acquired and started seven new first-party studios in the last year. We obviously don’t do that without tremendous support from [CEO Satya Nadella] and Amy,” he said.
“We understand content is a critical component of what we’re trying to go build and the support from the company has been tremendous.”
Microsoft’s focus going forward is going to be on cloud-based gaming, with Project xCloud’s focus being “first on Android phones because there’s over a billion Android phones on the planet and it’s a place that the content that we’ve natively built up over the past decades on our platform hasn’t been able to reach.”
“We’ll have multiple business models that will work with streaming, but the connection of streaming with the subscription model makes a ton of sense,” Spencer explained, citing music and video streaming as examples. “So you can look at Project xCloud and you can look at something like Game Pass, and you can see there’s natural synergies.”
Talking about what will set Microsoft’s subscription service apart from its competitors, Spencer said, “it’s all about how we reach 2 billion gamers. If you build the market around a couple hundred million people that are going to own a game console or a high-end gaming PC, then your business model diversity can actually narrow because your customers are narrow.”
“But when you think about reaching a customer with this content where their only computer device could be an Android phone, you think about, well, what are all the ways that that person pays for content if they do at all today?”
The intention with Project xCloud is to eventually bring Game Pass to every device, Spencer added.
Last year, Spencer announced his intention to invest in studios to make more first-party games.
At E3 this year, it was revealed that the company had formed a new studio in Santa Monica called The Initiative and bought four studios; Ninja Theory (Hellblade, DmC), PlayGround Games (Forza Horizon), Undead Labs (State of Decay), and Compulsion Games (We Happy Few).
Shabana is a freelance writer who enjoys JRPGs, wine, and not finishing games. Follow her on Twitter and Instagram.