MICROSOFT NEEDS EXCLUSIVES MORE THAN EVER.
“I run firstparty studios, so I’m all about exclusives,” Spencer says. “When we talk to people, that exclusive content is the number one reason that gamers buy a given console, so I’m going to stay extremely focused on bringing great exclusive content to the box. It’s critical.”
Despite this, information is bafflingly scarce. 343 Industries’ new Halo will doubtless form the backbone of Xbox One’s Q4 lineup, and Insomniac’s open-world shooter Sunset Overdrive is also expected this year. Those aside, little is known about Microsoft’s plans, and Spencer won’t talk specifics. He’s teasing a big release from a “wonderful” Japanese studio – his choice of adjective sparking speculation that Platinum Games is the developer in question – but until Microsoft shows its hand at E3, it’s hard to see where the next big thing is coming from. Halo defined the first Xbox, and Gears Of War did likewise for 360. New games in both those series are coming, the latter in development at Black Tusk Studios after Microsoft bought the IP from Epic Games, but new consoles are rarely sold on sequels alone. Spencer says E3 will be “great… a real moment for us in this generation”. In the meantime, he has little choice but to talk up Titanfall. “That’s a definitive experience for us. Cloud-powered, multiplayer, it looks beautiful, it plays beautifully: all the things that have been [attractive] about an Xbox [One] game, it embodies a lot of them.”
Yet these days, a console’s software lineup is about more than big-budget blockbusters. While Microsoft’s lack of a plan for indie games at Xbox One’s launch is perhaps the most confusing of its litany of oversights, it has belatedly got things back on track with ID@XBox, an indie self-publishing programme whose first 25 games were unveiled last month. “We’ve been inundated with applications,” Harrison says. “Two- hundred-and-fifty developers already have devkits and are building games for Xbox One; that is more than the entire independent developer count on 360 throughout its entire lifetime. To have that many developers, and that much interest, is really healthy for players, and it’s also super-healthy for the game industry. It’s a better on-ramp for developers to get into our space.”
That ramp, though, is not without its bumps. Chief among them is Microsoft’s notorious parity clause, which forbids developers from releasing their games anywhere else before they’re available on Xbox. Not having an equivalent is why Sony was able to show off such a spread of indie games at E3 last year: many of them either already have, or will, hit Steam before launching on PS4. The parity demand is a policy that served Microsoft well in the early days of Xbox Live Arcade, when competition was scant, but these days Microsoft needs indies much more than indies need Microsoft. Small studios have plenty of options elsewhere, not least a rival platform holder that is willing to handle the port work for them. Barely a month goes by without another announcement of a coveted indie title heading to PlayStation, and independent studios have played a vital role in fleshing out PS4’s release schedule. A Microsoft rep told us earlier this year that the parity clause was up for discussion on a caseby-case basis, while the GDC rumour mill had it that it will soon be discarded. That would have been unthinkable from Microsoft in the 360 generation, but the position of strength it enjoyed is gone. It would be no surprise to see that outmoded policy thrown on the bonfire with all the others. And the longer it stays in place, the greater the opportunity for Sony to further increase its standing. On the eve of GDC, Sony’s VP of publisher and developer relations, Adam Boyes, tweeted a picture of a mocked-up presentation slide titled “Platforms that you are not allowed to release a game on prior to releasing it on PlayStation platforms”. Below it was a blank list of bullet points. A cheap shot, perhaps, but Sony reaps the mindshare rewards with every blow it lands, and Microsoft keeps leaving its guard down. Harrison says he laughed at Boyes’ tweet, but it was a timely reminder that exclusive and indie games, improved dev tools and user interfaces, and even revised policies will only take Xbox One so far. Its biggest problem remains Sony, which offers the more powerful box at a more attractive price, and has a better
standing among developers and players alike. The hubris that gave rise to PlayStation 3 has gone, as are many of the execs associated with it.
It may help Microsoft that many of the faces associated with Xbox One’s bungled beginnings are also now gone. Don Mattrick, former president of Microsoft’s Interactive Entertainment Business (the division responsible for Xbox), quit to go work at Zynga. CEO Steve Ballmer has retired. And on the eve of GDC, chief product officer Marc Whitten left to take up the same position at wireless audio leader Sonos. Microsoft has a new CEO, Satya Nadella, and IEB has a new president in former Nokia CEO Stephen Elop, but Molyneux believes that the most significant departure of them all will be Whitten’s.
“He was very influential,” Molyneux explains. “Perhaps more than you realise, because he was in charge of all of the software – the operating system side. A lot of the things Phil Spencer’s group wanted to do, quite often they didn’t happen because they weren’t implemented on the operating system side. Him leaving softens quite a few lines.”
It leaves Harrison and Spencer as the public faces of Xbox, and being able to put two execs with extensive experience of the game industry in front of press, players and creators will surely help with image repair. Epic CEO Tim Sweeney says the two Phils “have done a great job of opening up to the community and talking as real human beings about Microsoft’s plans, and that’s a really welcome change from what was previously a very PR-driven company. I’m very hopeful Microsoft is getting through this long winter of mismanagement. It came from the top, despite the best efforts of the guys in the trenches, and I’m hopeful they’ll do a lot of good things.”
Yet even those management changes have brought on bad headlines. When he was in the running for the CEO gig, Elop was reported to be considering selling off the Xbox business, something investors and analysts have long called for. In his first memo to staff after taking up the CEO role, Nadella spoke of a “software-powered world” and a “mobile- and cloud-first world”, which on the face of it doesn’t seem to leave much room for Xbox. The financial press believes Nadella will seek to sell the division, or spin it out into a separate company for which he would not be ultimately responsible.
“You’ve never heard that from us,” Spencer says. “Xbox is maybe the most relevant brand that Microsoft has with consumers today. We’re going to maintain our consumer focus. We’re spending a ton of money, bringing in Nokia [with] 30,000 people joining the company to go build consumer phones. Consumer is part of what this company is. You think about the Xbox brand and all the equity around it, people lining up at midnight outside of Game to go get the console – how many Microsoft products have that? It’s an asset that’s extremely valuable, and since our future ambition is to grow our consumer relevance, Xbox has to be at the centre of that. When I have discussions with Satya, or Stephen, or [EVP of operating systems] Terry Myerson, it is more about how we make this brand, this product and this proposition more relevant to our customers, and not at all in the opposite direction.” These words are encouraging. Xbox One’s troubled start had many causes, but none would have been quite so disastrous had Microsoft’s messaging not also been so incredibly misguided. The common perception created was of a box built not to serve players or developers, but Microsoft’s business goals. With the suits who defined those goals now gone; a management team in place focused not on the needs of those selling the box but on the people working and playing on it; patches to solve many of its teething troubles; and the worst of the PR nightmare now hopefully behind it, Xbox One is in its best position since May 2013 and its disastrous unveiling. Microsoft should also be able take heart in Sony’s experience with PlayStation 3, which began with $599 and Giant Enemy Crabs and ended with The Last Of Us, PlayStation Plus and eventually even better sales than Xbox 360. Whether or not Nadella and Elop give Harrison and Spencer enough time to see things through is another matter.
“TWO-HUNDRED-AND-FIFTY DEVS ALREADY HAVE DEV KITS AND ARE BUILDING GAMES FOR XBOX ONE”