During last week’s business update, Microsoft leadership reaffirmed two differentiators for the Xbox ecosystem: Game Pass (every first party game coming day one) and platform accessibility (cross-play, cross-save, cloud streaming). Yet I don’t see either feature today as a compelling reason for net new gamers beyond the PC and console core – Xbox’s stated long term growth target – to jump in with Xbox. They are features with huge potential but are stuck today in alpha mode.
Game Pass unquestionably has a lot of great games, but most of the library encompasses small, under the radar indie titles or older catalog hits. Microsoft puts all its first party titles on the service, but none have the marquee prestige and popularity of franchises popularized on rival systems from Sony and Nintendo. Furthermore, I find the onboarding process on Game Pass intimidating for newcomers. There’s a bewildering number of choices, and the Game Pass app’s recommendation system is limited and simplistic; there’s no sense of individual game length or difficulty to guide new players.
Cloud streaming has been available for Game Pass subscribers since 2020, yet in practice, it has largely remained unchanged over the last three years. Even on my fast home connection (over 1 Gbps up and down), xCloud frequently stutters, with enough latency to make action-heavy games practically impossible to control. Mobile inputs are often awkward, there can be multi minute queues for popular new releases, and there’s no native app on iOS. Even when I can push through all these hurdles, the UI is often too small and hard to read on mobile viewports. Also, the cloud gaming library remains limited to Game Pass. Microsoft suggested players could play from their owned digital library by late 2022, but there’s been no progress to date.
There are few options for Xbox gaming beyond traditional consoles and PCs, each with its own technical weaknesses. Handheld Windows PCs like the ROG Ally are expensive, buggy, and need better battery life. There are native TV apps for streaming Game Pass on a big screen, but only on new Samsung devices.
Consider how all these weaknesses around platform accessibility and Game Pass impact a more casual audience. To clarify, I’m talking about those who dabble with mobile gaming without a console or PC or those who may own a PS5 or Switch but buy games infrequently, rarely more than one or two a year, potentially alongside a big free-to-play game like Fortnite or Call of Duty: Warzone. For this group, I don’t see how Xbox Game Pass and the platform’s play anywhere accessibility sells Xbox hardware, games, or services. It’s a viewpoint bolstered by Microsoft’s financials: Game Pass has had rather anemic growth over the last few years, and Xbox hardware sales remain flat. This late into the console generation, the core audience for PC and console has already peaked; we’ve reached a saturation point for which gamers beyond the enthusiast core are not jumping in with Xbox.
However, Xbox’s casual gamer appeal is by no means doomed; it’s more unfulfilled potential that feels tantalizingly close to a turnaround. Microsoft has so many first party studios in its control that a Game Pass mega hit that breaks into mainstream consciousness feels likely. There’s also speculation around an eventual Xbox handheld or even multiple licensed third party Xboxes at different price points to appeal to fresh audiences that otherwise aren’t into $500 consoles to hook into a TV. Also, with the acquisition of mobile powerhouse King, alongside the weakening of Apple’s and Google’s control on their mobile systems thanks to EU regulation, an emboldened Microsoft may add its games and services aggressively on iOS and Android. That mobile angle should prove compelling for a new audience; one minute, a player is on trial access for a fun mobile Game Pass game, and a few taps later, they’ve committed to a full subscription.
I suspect we’ll know if Xbox’s differentiators are making significant progress over the next year or two, well before the enthusiast console market starts itching for another major console revision. Watch Microsoft’s public statements and financial numbers closely. Are Game Pass subscriptions spiking? Even though it pales compared to console and PC sales, is Microsoft mobile and cloud gaming growing in popularity? Assuming Xbox hardware expands beyond the Series S and X, are these new devices selling and reaching a more casual audience? These leading indicators suggest far more about Xbox’s future than traditional factors like console and software revenue.
The platform differentiators are a bigger deal in Xbox’s long term trajectory than what first party games are porting to PS5 and Switch. Not to be blasé on the subject, but I find the continued hand wringing over Xbox’s software exclusivity boring. Admittedly, I was fascinated by the subject just two weeks ago. But today, reading between the lines of Xbox’s press interviews and business update last week, I find their positioning clear: port these smaller games as a test case, and if they perform well (I predict they will), many more, including big titles like Indiana Jones or Starfield, will head over to rival platforms, albeit likely starting exclusive to Xbox and PC for a period of six months to a year before opening up for purchase elsewhere.
I bet Xbox will happily embrace this post-exclusive future not just for the money but also because they firmly believe Game Pass and their platform’s accessibility work as compelling differentiators to remain a successful gaming platform. They want their players to focus less on the exclusives Xbox is “taking away” and more on what the ecosystem is adding: more Game Pass, cloud, streaming, mobile, and hardware. It’s a bold bet that may push Microsoft into a dominant position in gaming or into a tailspin; so much depends on marketing, actions by its rivals, and how an audience not yet sold on a console or gaming PC chooses to spend their free time.