Microsoft's Phil Spencer candidly admits the company lost the console wars to competitors
Microsoft "lost the worst generation to lose" with Xbox One, says Spencer.
Microsoft's Phil Spencer seems a bit down-trodden when talking about the performance of Xbox.
Speaking with Kinda Funny Games, Spencer said that while the company isn't in the business of "out-consoling Sony or out-consoling Nintendo," there isn't really a solution or win for the company.
Because of this, and languishing in third place, Microsoft decided instead of fighting a console war, it would instead focus on the cloud and subscription services like Game Pass with its new generation of consoles.
"The truth of the matter is, when you're third place in the console marketplace and the top two players are as strong as they are and have in certain cases a very discrete focus on doing deals and other things that kind of make being Xbox hard for us as a team – that's on us, not on anybody else," said Spencer.
While Microsoft is focused on creating great gaming experiences for Xbox users, Spencer said the company's aware it cannot win against Nintendo or Sony with conventional console strategies.
"I see it out there. I see commentary that if you just build great games, everything would turn around," he said. "It's just not true that if we go off and build great games, suddenly you're going to see console share shift in some dramatic way. We lost the worst generation to lose in the Xbox One generation, where everybody built their digital library of games.
"This idea that if we just focused more on great games on our console, that somehow we're going to win the console race, I think doesn't relate to the reality of most people."
While the console is the core of the Xbox segment of the company, Spencer said that sometimes its competitors make it hard on the console team as a whole.
"We're not in the business of out-consoling Sony or out-consoling Nintendo. There isn't really a great solution or win for us.
"But I know some people want to hold us up as being a better green version of what the blue guys do, and I'm just going to say there's not a win for Xbox in staying in the wake of somebody else. We have to go off and do our own thing with Game Pass, with the stuff we do with Xcloud, and the way we build our games."
All that said, Spencer does seem optimistic regarding devices that consumers can use to play purchased games across various devices such as consoles, PC, and handhelds like Steam Deck. While that's wonderful, Spencer said to not expect Microsoft to forgo the console market to focus entirely on steaming.
This is especially true since 90% of those who buy consoles are in the camp they prefer, whether that be Nintendo, PlayStation, or Xbox; plus, it is not cost-effective for consumers to purchase a console that will not allow them to carry older games forward to the newer generation.
"This is the first generation where the big games they're playing are games that were available last-gen when you think about Fortnite, Roblox and Minecraft," said Spencer. "The continuity from generation to generation is so strong.
"I see a lot of pundits out there that want to go back to a time when we all had cartridges and discs, and every new generation was a clean slate, and you could switch the whole console share.
"That's just not the world that we are in today. There is no world where Starfield is an 11 out of 10 and people are selling their PS5s. That's not going to happen."