Xbox boss Phil Spencer recently talked about where he thinks Microsoft will take gaming in the future, beyond the next-gen Xbox Series X, specifically when it comes to business models, monetisation, and cloud streaming services.
Spencer joined Insomniac Games CEO Ted Price for an hour-long episode of the AIAS Game Maker’s Notebook podcast to discuss “what lies ahead for Xbox and Project xCloud, thoughts on monetization,” among other topics.
One major topic centred around whether he thinks the industry will move from console wars to cloud wars in the future. “I hope not,” was his immediate reply. “I think I’m going to have a game console plugged into my television for the next decade plus,” he added. “I think the best way for me to play on my television is going to be having a device that downloads the games I want to play, but sometimes I’m not going to be in front of my television, sometimes I’m not in front of a device that has a native capability to play. That’s our bet on cloud.”
Microsoft, Google, PlayStation, Nvidia, and the rest of the competitors moving towards game streaming services still have a lot to learn when it comes to monetisation and input, according to Spencer. But his hope is that it will encourage game developers to be more creative with their games in the future.
“Once you get through the pragmatics of making [a game] playable on [multiple screen sizes] then you get to the promise,” Spencer said. “You start talking about ‘well wait a minute, now if my game isn’t just dependent on this one piece of hardware that someone maybe bought five years ago in the home, but actually something that a large cloud provider is updating on the back end and is scalable, then what can I do with our games?’. That is a very cool future up and down. How do we scale the cloud computer to the creative experience that somebody wants to deliver?”
Spencer also thinks that rather than having one machine that plays games, in the future, we’ll have multiple devices in the home that we play games on. He looks at how he can listen to music and watch TV on a number of devices these days, whereas in the past it was just one. This is why Spencer thinks you’ll have many game-playing machines under your TV and across multiple rooms going forward.
“One of the things that’s always bummed me out about consoles is I usually have one TV in my house that a console is plugged into… The idea that I can’t go to any TV in my house and sit down and play the games I wanna go play – we should have that ability.”
That is, apparently, what Spencer is already seeing people do with the Microsoft xCloud preview. “The number of people that send me pictures of their Android tablets that they’ve mounted in certain places and have certain controls set up,” he said. “People going out and buying specific devices so they can use remote play, or different streaming scenarios from their console to different screens. I think we’re early on in that journey. It’s gonna be fun.”
Another important part of that journey for Spencer is coming up with new business models. “Our point of view, as Xbox and Microsoft, is that there’s not one business model to rule them all. We actually think it’s healthy not only for our industry from a monetisation standpoint, but also from a creative standpoint, if multiple business models will work,” Spencer said. “I think for us as an industry we should embrace monetisation dexterity because I think it leads to the best creativity.”
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Thinking on how business models need to diversify in the future, Spencer explained that he recently went to Africa, where they have a business model based on earning credit. His example was that you watch an advert on a bus or taxi, and that earns you five minutes of time on the internet, which he called “pay to earn, or play to earn.” As to how this kind of model would work in gaming, Spencer isn’t exactly sure, but he says it could definitely work.
“Could that be a model that works in games? Well absolutely. I think it could,” Spencer said. “I dunno if it’s gonna completely mirror the business models that we have today. It’s not necessarily free-to-play, it’s not necessarily ad-funded, it’s something different.”
However, Spencer also said that he thinks game developers need to be careful when looking into new business models. He warns against finding new ways to get money out of existing players – the 200 million console owners that currently exist – as that’s not actually growing the business and is “dangerous” for the industry. Instead, he urges towards attracting new players. “I think we need to find new players and new forms of monetisation to open up those new player bases, and new ways to build games, new creativity, and that’s a great path to growth,” he said.
The more immediate plan for Microsoft is get the Xbox Series X into the world as it launches in holiday 2020. So far, Microsoft has revealed features that prove the Xbox Series X will be a powerful machine with 12 teraflops of GPU power, making it capable of supporting 120fps. It’s also got a small but enticing lineup of launch games which will be supplemented by the system’s backwards compatibility. But what makes this generation of consoles different to previous ones are features like Play Anywhere and Project xCloud which, as Spencer said in the podcast, are future visions of gaming beyond the Xbox Series X.
Chris Priestman is a freelancer who writes news for IGN. Follow him on Twitter.