OPINION: This week's big Xbox drama showcases how little people trust Nadella's Microsoft — a legacy forged in the death of Windows Phone

Lumia 1520
(Image credit: Windows Central)

The past few weeks, rumors began to swirl about the future of Xbox, and its plans for multiplatform games. 

I went into some of the outrage here, and why Xbox fans are right to doubt Microsoft's plans here. Microsoft is reportedly exploring putting its Xbox exclusives onto long-time rival, PlayStation. 

Yes, there are elements of console war tribalism, and some have been utterly toxic in attacking and harassing people on social media to that effect, which is wholly unacceptable. Nobody in their right mind thinks it's a bad thing for devs to get their art out to a wider audience, but this multi-platform plan implies a one way street, potentially harming Xbox's competitive position against its rivals. The broader concerns are valid, and logical — if Microsoft reduces the reasons to buy an Xbox, less people will buy Xbox, less developers will develop for Xbox, preceding less reasons to buy an Xbox. Xbox goes into a death spiral, and thus, long-term, customers lose access to potentially hundreds or even thousands of dollars worth of digital game investments. I don't know why some find this point hard to understand, but it's not necessarily relevant to today's article. 

Today, we're exploring why active Xbox consumers don't trust Microsoft with this "plan," and how Satya Nadella's Microsoft jeopardises its entire operation beyond gaming with short-sighted, quick-money decisions that erode long-term trust in its products and services. 

Microsoft has a ton of consumer-harming baggage

RIP my gorgeous Lumia 1520, killed in a tweet by Microsoft.  (Image credit: Windows Central)

A firestorm of speculation has YouTubers and popular Xbox influencers proclaiming the Xbox platform "dead," posting receipts of traded-in Xbox consoles and games, and even suggesting Xbox is going bankrupt — despite Microsoft posting record gaming revenue, and even record Xbox console gaming engagement, just last week. Yes, PlayStation 5 is outselling Xbox Series X|S, but potentially only to its own PS4 install base. The fact Microsoft's console user base is going up, while the overall console market remains static, certainly doesn't suggest a broad swath of Xbox users switching their platform of choice. Assuming all the figures are accurate, Microsoft maybe comfortable not giving Xbox One users a reason to upgrade. But games like Grand Theft Auto 6 which is next-gen only may begin to change their fortunes here. 

But again, I digress. Why the outrage? Why the fearmongering, and why the apocalyptic prognostications? I have to admit that I initially felt the same way through all of this, as a long-time Xbox user with thousands of dollars invested into the box. But I know all too well why I don't exactly trust the upper echelons of Microsoft to have their customer's best interests at heart. 

See more

Long time readers of Windows Central (formerly WPCentral, as in Windows Phone Central) will know exactly what I'm talking about. For years, Microsoft actively curated a community and fandom around its Windows Phone platform. They celebrated by giving out Lumia phones to developers at Build events, encouraging developers to create apps and services. They had community programs, similar to the Xbox FanFest, around developers and phone enthusiasts. They'd engage phone photographers, tech influencers, digital artists. They would hold events at Mobile World Congress much like E3, to launch new phones, products, and services. They would do Lumia product placements in TV shows and movies. They even bought Nokia's phone division, for billions, analogous to Xbox's acquisitions in recent years. CEO Satya Nadella even did a photo op with Nokia CEO Stephen Elop to celebrate the acquisition, and the teams therein joining Microsoft. 

And then, Microsoft killed Windows Phone. With a tweet

Current Office co-manager Joe Belfiore, unceremoniously announces the death of Windows Phone, and its community, in a random tweet in 2017.  (Image credit: @JoeBelfiore on Twitter (X))

For all of Microsoft's general lack of consistency, they are at least consistent when it comes to disappointment. CEO Satya Nadella loves to drop buzzwords like "A.I." and "metaverse" when its the current tech trend, only to never follow through with any plans in any sort of serious context. The only thing keeping HoloLens alive, which was half a decade ahead of Apple's Vision Pro, is a quite probably doomed U.S. Department of Defence contract. People are literally willing to wear Apple's dumb $3500 dollar headset in public, which practically does all all the same things HoloLens did — and why? Because Apple has consumer's trust. People know Apple will see things through, and they know Apple will reward early adopters. 

Microsoft is a product killer. Skype, HoloLens, Microsoft Band, Mixer, Surface Duo and Neo, Windows Phone, the entire phone division, probably Surface itself in the coming years — on paper, Xbox is doing better than ever, but nobody believes that it'll ever be enough for Microsoft.  

Microsoft either doesn't see it, or doesn't care

A now notorious image of Microsoft execs, jubilantly celebrating HoloLens, perhaps gleefully unaware how it would be dead not a few years later.  (Image credit: Windows Central)

The A.I. hype train currently has Microsoft sitting at a $3 trillion dollar market cap, but Microsoft is basically piggy backing on OpenAI to do a lot of the heavy lifting here. I wrote previously about why I don't think Microsoft will be the ones to mainstream consumer-oriented applications of A.I., and I'm essentially echoing some of the sentiments here. But the latest tech hype really rammed the point home for me this week. 

Apple launched an absurd $3,500 face computer recently, called the Apple Vision Pro. It's analogous to HoloLens in almost every conceivable way. Beyond gimmicks, the Apple Vision Pro's primary use case is spatial anchors for app/program windows, a feature literally pioneered by Windows Mixed Reality and the HoloLens team.

People are literally walking around in public wearing the Apple Vision Pro. Can you imagine people doing the same with HoloLens? Probably not, because nobody actually bought them. It even has a Netflix app, unlike the Apple Vision Pro. People didn't buy HoloLens because Microsoft didn't truly believe in it, and pretty much dropped all interest in it at the first opportunity. 

See more

I remarked on Twitter (X) the other day that "HoloLens creators must be quite mad that Apple just invented HoloLens several years later." A former HoloLens engineer reached out to me and said "we're not mad, because half of us left to join Apple to create the Vision Pro." I realized then that, Satya Nadella's Microsoft might have squandered the next big wave of consumer computing. You sure as hell can't use a Windows PC if you have an Apple Vision Pro strapped to your face, much in the same way iPads and iPhones are introducing millions to Apple's walled garden as the "default" computing experience.

Whether or not the so-called "metaverse" becomes a multi-billion dollar black hole fad remains to be seen. But imagine if it isn't? Meta is sinking billions into making it a thing, and its share price is gradually trending up right now. Microsoft was literally the first to this kind of tech — true augmented reality, standalone, cable-free, spatial anchors — in the palm of its hand, but always lacked the long-term vision and corporate competitive balls to see it through.

Apple has curated a supply of consumer trust and consistency that is truly the envy of the world over — you know exactly what you're getting with an Apple product, and that reliability, and that familiarity, is why Apple is utterly dominant when it comes to consumer electronics. They are supplanting Samsung as the world's primary smartphone manufacturer on the back of this consumer trust and prestige, selling electronics at a hard premium while raking it in from developers in the process. Apple's entire marketing strategy revolves around curating trust, from its "privacy-led" marketing to its aggressively consistent and familiarity-first iterative design strategy.

Apple invented HoloLens. Or at least, a consumer-viable one backed by decades of consistency and customer trust-building.  (Image credit: Future)

It's intensely frustrating, because Microsoft "being first, then quitting" is absolutely a meme at this point, and the lack of foresight is precluding the company from vast swaths of coming tech trends. Perhaps the metaverse and augmented reality are the next big wave in computing — but Windows Mixed Reality is now very, very dead. Microsoft has no play in that space now, and will be at the mercy of Apple and Meta's walled gardens, losing control of their services and the default apps on those platforms. The lack of a Windows-first mobile experience also precludes Microsoft's efforts in A.I., business applications and services, web browsers, search engines, and yes, you guessed it, Xbox gaming too — Microsoft announced that it now has 200 million monthly active mobile gamers, and that empire is wholly at the mercy of the whims of Apple and Google's app store rules. Good luck with that, ladies and gentlemen. 

Microsoft has already complained about Apple's mobile store rules as recently as last week. Imagine if they had their own mobile platform to speak of, so they wouldn't need to worry about such things eating into their bottom line?

But again, I digress. There's no hope for Microsoft to build a new computing platform in 2024, because people simply don't trust Microsoft to see this kind of stuff through. I firmly believe Xbox Series X|S is the best product Microsoft has ever built. It works flawlessly as advertised, has a sleek and speedy interface, and has given me thousands of hours of affordable entertainment — it even gave me a career. But I'd have to be insane to truly believe Microsoft has my best customer interests at heart when making some of the decisions it makes, based on decades of inconsistency, and mistrust. 

Microsoft's consumer products will succeed, and make *more* money, with a more consistent behavior pattern

Xbox will be fine, right? RIGHT?! (Image credit: Windows Central | Jez Corden)

If Microsoft has a company tracking consumer sentiment and trust around its brand, they should probably fire them. Microsoft's spectacular inability to "read the room" will continue to harm the firm well beyond just Xbox. I suspect consumers will prefer other platform's A.I. efforts over Bing and Microsoft Copilot, regardless of what their companies force upon them in the future. Qualitatively, the subreddits dedicated to A.I. are often awash with mockery for how overly-sensitive and erroneously censorship-prone Microsoft Copilot A.I. is when compared to regular ChatGPT. 

The staggeringly negative reaction to the mere whispers of Microsoft maybe jeopardizing the Xbox hardware platform is wholly a drama of Microsoft's own making. 

I have no crystal ball and have no idea what the future holds. I want to believe that Xbox would be fine even if it went multi-platform (and hey, Steam is building Steam Deck console-like devices using PlayStation and Xbox PC games already anyway). Xbox's revenue and outlook is better than it ever was during the Xbox 360 era, on paper. I want to believe Xbox will make a Steam Deck / Nintendo Switch-like handheld, and will continue to support its hardware ecosystem for decades to come. But why should I? Gaming is going to have a troubled few years, but I feel like if it was Apple in this situation, they would subsidize the experience using their healthier operations to weather the storm to maintain that consumer trust. Microsoft's corporate mentality of "every division stands alone" is why they have a huge graveyard of products that is too long to list out here.

I don't want to downplay Satya Nadella and his team's accomplishments in business, nor their investments in Xbox and the team there. But, the overarching lack of faith in their own products, and a willingness to follow through, is just hard to deny. 

Once upon a time, Satya Nadella said that he wanted people to go from just using Windows, to loving Windows. I've not really seen him make any efforts to achieve that — baking in ads, dark patterns, and telemetry harvesting. He also talked a lot about the metaverse, before culling the teams working on HoloLens and Mixed Reality. He talked a lot about Mixer too. And Surface. And Windows Phone. And probably other products I forgot about, long rotting in the Microsoft Graveyard

An open letter to Microsoft: Consumers don't listen to what corporations say. Consumers watch what you do. Imagine what it would be like if consumers could trust you?

Jez Corden
Co-Managing Editor

Jez Corden a Managing Editor at Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by caffeine. Follow on Twitter @JezCorden and listen to his Xbox Two podcast, all about, you guessed it, Xbox!

  • jasongw
    Well written article, and it echoes what I've said for years. Microsoft's problem isn't that it can't innovate, deliver on a vision or create great products, it's that when the going gets a little rough, Microsoft gives up and slinks away.
    Reply
  • fjtorres5591
    Whoever is in charge of external relations (PR, etc) and internal security need to be shown the door. The leaks don't help and going two weeks before addressing the leaks is unprofessional and intolerable. What could have been seen as trolling, wishful thinking, or misunderstanding was given credibility via inaction.

    At a time XBOX should be celebrating the windfall of the unplanned PALWORLD success they are wracked with deflating rumors and nobody has stepped up to deny, clarify, or even lie. Any of the three would be proper business practice; silence isn't.

    At this point, where is Nadella?
    Doesn't he care about their third largest revenue stream?
    Reply
  • XboxGreyThor
    One of the best articles you have written Jez. Thank you. This will be a wakeup call for some at Microsoft.
    Reply
  • BINARYGOD
    A baffling article, with baffling replies (only 3 but still) here in the comments.

    "it's MS fault a bunch of us got whipped into a fury of mass hysteria online over what amounts to basically nothing, magnified by society-failing social media, and MS didn't come right out to claim they are not going 3rd party just a few months after closing the deal to own Call of Duty and Diablo and Overwatch!"

    It's almost like you SHOULD wait for next week, and perhaps also come up with sky-not-falling possibilites as to why they said basically nothing, and why next week. Nintendo is doing something next week. That's interesting.

    Nah, never mind that, let's get toxic on the internet and then blame the large trillion-dollar corporation for why we act like fanboyistic babies. Even if you are correct and Halo is going to PS5 - the stress and all that over a week is for what? Who is getting anything out of that, other than twitteroids and failed website writers who got TONS of juice out of the Next Shocking Story Click Here to Find Out!

    BTW - Windows Phone, by nearly all accounts, should have been killed off sooner - anyone's possible actual regret is not an admission they should have stayed the course. And the Hololens stuff is an entirely different beast altogether, and quite frankly, that stupid iWhatever that Apple just launched for over 3 grand proves that, actually. No one would bother caring about that if the same exact thing was made by any other company. If it really is the start of something, well too bad, its late for even that, AR and VR are already things long before Apple chose to show up and this is not an iPod moment.

    Anyway - your claimed lack of trust, or your willingness to automatically believe all or most of the 3rd party "rumors" has almost nothing to do with Nadella or Spencer. That is, again, if any of this is even real - I mean, I too, I guess, could pretend to care about fake news if it meant it kept my paycheck going.
    Reply
  • Ron-F
    Microsoft started as a small company that created software for hobbyists in the 1970s. However, by the end of the 1990s, it was already a company focused on the enterprise market. This means they had a small number of customers that paid a lot of money for the services. Also, they could deal only with the small ITs teams, instead of the enormous number of users in their clients. This is all incredibly good, but it doesn't equip a company to deal with the consumer market. Microsoft always had an ambition in the consumer market that never found success, except for the Xbox. Although there is enough time for corrections, I am not sure consumer services and products could ever blossom in Microsoft, especially when they became big and attract more scrutiny.
    Reply
  • infosage
    Great article. To be fair, Nadella has proven to be a great business CEO. I consider him a "curator" CEO. Like a museum curator, he carefully selected what was valuable and highlighted them in the exhibit (Microsoft). If something wasn't currently valuable, he threw it out. This worked well because Ballmer left behind so much innovation in everything from Azure, to Office365, to Office, to Windows, to Windows on ARM, to Surface, to XBox, to Windows Phone, and even Hololens in the basement. He was probably trying to do way too much.

    So, Microsoft is a great stock, but not exciting. Fewer of us ever buy new Microsoft products (HoloLens, Surface Duo) now or pay much attention to their announcements (Surface Neo). Your article was spot on, we don't trust Nadella.
    Reply
  • Slpstrm
    Completely agree with XboxGreyThor, this is one of the best articles you've done and a true eye opener.....BUT (yes it's a big but)
    I truly don't believe it's a consumer confidence issue but as always a fan boy (status) issue, most supporters of Microsoft ( not shareholders) are the players they don't really care about the decisions made unless it effects them specifically i.e. no more plastic box to claim as there own.
    It's the same as Apple people really don't care about the product as long as they have it, it's all about status, if they were to discontinue iPhone and put there OS on a generic phone, only the most dedicated would buy it, the Apple Vision Pro & Hololense are a prime example only the most dedicated who can afford them will buy them just because of the status perceived buy owning them, You could buy a decent PC or laptop for that price and most come with Windows (yes you can install other OS) but it's the software that makes the difference.
    And this is what we're looking at here, what's the experience to the average consumer if they go put games on PlayStation or even Nintendo switch it's no different the the current push they have on Samsung TV, you don't need the Xbox you just need a controller and subscription to Gamepass to still enjoy the main reason to claim support of Xbox...the Games.
    Yes they have had some major support problems with hardware Zune, Windows phones, Hololense etc but I don't think its hindered the average user, they still support Microsoft as a whole, and it could be worse look at the amount of projects started by Google only to be dropped a few years or even months later.
    Yes google & apple have also attempted to limit Microsoft's to not have the ability to run the apps on there hardware but Microsoft have achieved workarounds like steaming without the Gamepass App so the average person can still play their games on that hardware because they know it's the software that people support more than the plastic boxes and this is what they consider more important, thus I don't think they would loose developers when it's achieving a bigger and more diverse reach of people, hence why the Activision Blizzard King deal was important for them.
    Anyway as a Xbox Series X, PlayStation 5 & Nintendo switch owner if the plastic boxes weren't there I'd love to have the ability to get rid of them and be able to play anything, anywhere at anytime on any device which is what Microsoft are trying to achieve with Gamepass.
    Anyway again fantastic writing for a good thought provoking look at the possible future of the Gaming industry as a whole. And you "keep pretending to be interested in fake news to get a paycheck" (looking at you BINARYGOD) as far as I'm concerned you do a great job at it
    Reply
  • xsikal
    Couldn't agree more, Jez. It echoes what a lot of people have been saying for years, back to when there was a comment section and Rubino would get into flame wars arguing the opposite (using the now seemingly soon to be moribund Surface line as the proof).

    I gave up on MS hardware several years ago because I stopped trusting the company. It seems more and more people are doing so. As a consumer, the company has become a massive and untrustworthy disappointment. But the growing truth is that every company cares more about their shareholders than their customers... some are just better at hiding it than others.
    Reply
  • naddy69
    Once again, everyone misses the main point about Microsoft.

    "But the growing truth is that every company cares more about their shareholders than their customers... some are just better at hiding it than others."

    EVERY company cares about their customers. You don't stay in business very long by ignoring your customers.

    But you HAVE to realize - and accept - that the customers that MS cares about are corporate customers. That you have personally spent "thousands of dollars" over the years on Xbox and games (and phones and music streaming and whatever) means nothing. There are corporate customers that spend thousands of dollars DAILY on MS products and services.

    Who do you think MS is listening to? Who would YOU listen to?

    "Today, we're exploring why active Xbox consumers don't trust Microsoft with this "plan," and how Satya Nadella's Microsoft jeopardises its entire operation beyond gaming with short-sighted, quick-money decisions that erode long-term trust in its products and services. "

    Again, missing the point entirely. ALL of those "short-sighted, quick-money decisions that erode long-term trust in its products and services" were ALL about consumer products. The LONG TERM result of the "short-sighted" dropping of consumer products - incidentally, consumer products that were losing billions of dollars - is that MS is today the World's Most Valuable Company.

    Why O Why are you still looking for MS to supply your consumer electronics needs? Its not going to happen. All of Microsoft's consumer products are LONG gone. What is the result of that? That's right. MS is today the World's Most Valuable Company.

    You don't run a trillion dollar business with your heart. You have to use your head. Killing products that are not selling well, are losing money AND are not part of your overall business strategy is a good business decision. You don't keep such products around just to please fan boy websites.

    Having said all of that, Xbox is doing well. I would be very surprised to see it killed. At worst they might sell it off, but even that makes no sense at this point. Xbox is not Windows Phones. It is actually selling well AND making tons of money.

    Which is something Windows Phones never did.
    Reply
  • Luuthian
    Fantastic article Jez, thank you. I really couldn't add to anything you said, it was poignant and underscored a lot of what many of us are feeling.

    For what it's worth I always feel really weird coming here still. Windows Phone was how I found this place and I've been in and out ever since it was Windows Phone Central. Used to comment in the forums back when there were actual Xbox Live games for the devices. You guys always fought the good fight for the devices but Microsoft never rallied the troops. It feels like every few years I come back here the same thing plays out and it sucks.

    I moved to Apple devices full time in 2018 and have absolutely no intention of coming back to Microsoft because the hand can only be bit so many times... But despite that, I put my faith in Xbox back in 2018 because of gamepass and needing a gaming device to offset all the Apple computing. For a while it was everything I could want, but now I feel like my hand got bit again. Too many remakes of old games or Square or Capcom things I wanted kept skipping the platform this generation. It's the last time I feel like putting myself out there for anything "Microsoft" because any time I take a chance on something with them the same thing happens.

    I'll still pop in to this site off and on to keep up with news. I think you're all fantastic writers and deserve all praise. But getting rid of my xbox really felt like the last cord to cut with them so far as consumer devices go. Hopefully they get the message one day like you said... but I'm not willing to be the first to find out any more
    Reply