Xbox, Gaming Anywhere, and the Death of the Hardware

In August 2024, some top technology and business publications, including Bloomberg and The Verge, published a series of articles querying the direction of Xbox and Microsoft’s wider gaming strategy.

The pieces claimed that Xbox owners were somewhat confused over the gaming giant’s strategy, especially in the wake of Microsoft’s takeover of gaming publisher Activision-Blizzard, which, at around $70 billion, was the biggest acquisition in tech history. 

That takeover deal was, of course, hugely important, and not just for the astronomic sum of money involved. It was subject to intense antitrust scrutiny, which threatened the deal at one point. Effectively, Microsoft had to promise that its ownership of Activision would not cause it to covet its new toys.

In short, it had to promise that titles like Call of Duty would never become Xbox exclusives. Yet, the wider strategy has also suggested that Xbox and Microsoft are prioritizing intellectual property over hardware. 

Gaming anywhere has been Xbox boss’s motto

In essence, Game Pass and similar subscription services are more important than console sales. A good thing, too, when you learn that PlayStation 5 is reportedly outselling Xbox by 5 to 1. However, none of this should really be surprising.

Microsoft’s Head of Gaming, Phil Spencer, has teased this strategy for numerous years. He has talked about the concept of “Xbox everywhere,” which proudly means gaming anywhere, a phrase that suggests hardware is going to become less important. 

None of this should sound like it is far-fetched. If we look at other areas of entertainment, we know that there are different expectations. You expect to be able to access your Netflix account wherever you go without needing to lug your television set with you.

Casino gamers know their account follows them, allowing them to play games as diverse as live dealer baccarat to classic slots on any device with an internet connection. In short, movies, television, and casino gaming aren’t device-centric, so why should video gaming?

That said, if you listen to Spencer, he does talk a lot about wanting this to be the direction of travel. Part of Bloomberg’s reporting looked at how Xbox had made some of its previous console exclusives available on PlayStation, including HiFi Rush and Sea of Thieves.

Others, like the upcoming Indiana Jones and the Great Circle, will be timed exclusives, meaning they will initially be on Xbox but later available on PlayStation. 

The confusion mentioned by Bloomberg and The Verge is based on the fact the strategy seems to take a scatter-gunned approach.

Bethesda, which Microgaming acquired in 2020 for $7 billion, will release the aforementioned Indiana Jones as a timed exclusive; Starfield is exclusive to Xbox and PC, whereas Doom: The Dark Ages will be available on all platforms simultaneously. One studio, three different approaches to availability for top-tier games. 

The end of the console could be sooner than we think

For gamers, the idea that there would soon be no such thing as console exclusives is alluring. But is it truly feasible?

We mentioned comparisons with streaming services and casino gaming previously in terms of accessing anywhere on any device, but it remains the case that streaming platforms do have exclusivity: Star Wars Andor or Marvel Loki aren’t going to suddenly pop up on Netflix, for instance.

So while Phil Spencer does tend to promote a utopian future of gaming access, economic realities will also dictate his strategies. Xbox will need something to persuade gamers to continue to subscribe to Game Pass, and that means offering something that rivals don’t. Economics, not philanthropic philosophy, will dictate where we go. 

All of this, however, does start to point to a future without physical consoles. Some have suggested that the next iteration of the Xbox might be more like a USB stick than a large piece of hardware.

There are technical challenges, of course, as a console comes with powerful dedicated hardware—custom processors, GPUs, memory, and storage—designed specifically to deliver high-performance gaming experiences.

Yet, all of those elements could feasibly be added to support high-performance cloud gaming without a console, especially when you consider who Xbox’s parent company is. 

All of these things will happen gradually, if at all. But you can sense the change in the air, even if Xbox’s approach to it is somewhat uncoordinated. Gaming ecosystems are becoming broader, blurring the boundaries between the necessities of hardware, software, and intellectual property.

Gaming companies need to make money, so their moves to roll out better access will be selfish, but they will also be reactionary to realities like flagging console sales and the growing ubiquity of cloud gaming, so the market might just sort itself out in favor of gamers.