Thrifty Microsoft swops tuxedoes for sweatpants to launch Xbox products
Microsoft, gearing up for its biggest year of launches for Xbox products and services in the middle of a global pandemic and economic recession, will replace its plan for a splashy public game-conference event with a monthly series of online showcases.
The virtual events start on May 7 with a look at third-party games planned for its new console, called Xbox Series X. In June, the company will highlight the Xbox platform and services, and July’s session is intended to cover games produced by Microsoft’s own 15 game studios, including the next iteration of its biggest franchise, Halo.
The company, based in Redmond, Washington, planned initially to unveil many details of the new products in June at the E3 (Electronic Entertainment Expo) conference, which has now been cancelled.
Gaming audiences “love the authenticity of us showing up in our sweatpants here in our home office and talking about what we are doing”, Xbox chief Phil Spencer said in an interview. This also seemed like a good time to eschew the typically flashy, celebrity-studded events the video-game industry is known for, he said.
“We can all look at the unemployment numbers right now. We can also understand we’re in video games, while we have frontline medical workers out there that are keeping people alive.” Microsoft is set to release the new console for the holiday season, and is planning its first game-streaming service, called xCloud, for later in 2020.
Shifting events online and toning them down are not the only changes possible because of the Covid-19 virus that has disrupted workplaces and production schedules, as well as the global economy. While CFO Amy Hood said last week the console launch was “on track” and device manufacturing in China was returning to normal, there might be delays in some outside developers’ games for the new device, Spencer said.
Microsoft has taken steps to make it easier for third-party game developers to work from home. For instance, Microsoft gives these teams specialised development kits that let them simulate the environment of the unreleased next-generation console so that they can build games for it. Normally those kits are closely guarded and have to stay in the office, but now the company is letting them be used from developers’ homes.
A lot depends on how far along games were in development when their studios were forced into remote work. Programming and some other tasks can be done from home offices, while complicated motion-capture of animation used for games is harder to do on the computing rigs most people keep at home. “That’s just not happening right now,” Spencer said.
“In terms of timelines, we’re finding now that game production is in some ways more challenging than hardware production,” he said. “You have one hardware timeline and then you’ve got all these games.”
Already some developers have announced delays for games intended to arrive this spring. Microsoft shifted Minecraft Dungeons to May from April, and CD Projekt Red moved a game to September from April. Some games for Sony’s PlayStation, including
and have also been pushed back. Because Microsoft now sells a video-game subscription called Game Pass, which gives customers access to more than 100 titles, Spencer said there is less concern about what will be ready when the new console goes on sale. He is confident there will be enough new games ready when the Xbox hits the market.
“I feel good about the line-up that’s there, but I’ve also said I am not going to hold the launch of the console for any one game or any collection of games,” he said. So far, the coronavirus pandemic has mostly been positive for Microsoft’s video-game sales, as stuck-at-home gamers of all ages turn to their consoles for entertainment and social engagement. Last week, Microsoft said Game Pass topped 10-million customers.
But the longer-term economic effects and rising unemployment will probably affect how many people can afford to pay hundreds of dollars for a new machine later in 2020.
“Families will be making different trade-offs around where their dollars are spent,” Spencer said. Microsoft has not yet disclosed the price of the new console. Spencer said the company could weather economic fluctuations if Xbox gamers kept playing, regardless of device.
A few years ago, Microsoft began seeking ways, such as Game Pass, to generate revenue in a continuous stream that is less dependent on a new console purchase.
Microsoft games run on Xbox and personal computers. New xCloud streaming service will add the ability to play its games on phones and tablets. “There’s not a lot to rely on,” he said. “Our teams and our customers are dealing with a once-in-a-lifetime moment.”