Microsoft Opens Up Some Xbox Games as Rival PS5 Hits Record Sales

New Microsoft Gaming Strategy

The gaming industry has been undergoing some important changes in recent years. The significance of hardware has been diminishing, console-exclusive titles have been fewer and cloud-reliance has been growing. Furthermore, the rise of Fortnite and Roblox underscores the popularity of online and mobile games.

Microsoft has been adjusting its gaming business to focus not so much on hardware, but more on content and a unified experience across multiple platforms. The blockbuster $69 billion acquisition of Activision-Blizzard, the publisher of marquee franchises like Call of Duty and Warcraft, is an accelerant. Moreover, its Xbox series X&S is outsold by Sony's PlayStation 5 console, which shipped a record of 8.2 million units in the last quarter, according to this week's results.

Given the deeper IP catalogue from the Activsion deal, the lagging console sales and the broader industry transition, it makes sense for the tech giant to lean more on content and making Xbox a far-reaching gaming ecosystem, instead of a mere console. Microsoft will still rely on hardware as an integral part of this future and Xbox President Sarah Bond said that the firm is "invested" in building next-gen device and delivering "the largest technical leap ever seen in a hardware generation". However, Thursday's business update confirmed the strategic shift towards content and gaming everywhere. ^[1]

CEO of the gaming division Phil Spencer announced that the firm will now offer four Xbox-exclusive games to other consoles. He did not name which these games are, but said that they are titles that are over a year old. This is a somewhat conservative approach, as a more radical offering could ire customers and undermine the platform, but marks a watershed moment that underlines Microsoft's new approach.

Furthermore, the tech behemoth is putting increasing emphasis on Game Pass, the online subscription service that allows users to download and play games across multiple devices. Executives said that the service has grown to 34 million members. They added that all new games will now be available on Game Pass on day one, starting with Diablo IV, harnessing the power of the Activision-Blizzard buyout.

Overall, Microsoft has been lagging behind its main rival Sony in the gaming wars and something had to change. The acquisition of Activision has the potential to shape the market and Micorsoft is already laying a vision of the future. Greater emphasis on software and opening it titles to competitors, along with a play-everywhere push appear to be key pillars of the new strategy. The shift is not without risk and remains to be seen if it will work.