It doesn't help that its primary competitor, PlayStation, seems to have been pumping out critically-acclaimed, photorealistic game after game, with Bloodborne, Horizon Zero Dawn, and most recently, God of War, among others. Microsoft has a few wins under its belt too, with titles like Gears of War 4 and Forza Horizon 3, but it often feels like many of the games Microsoft is shipping are smaller in scope, both visually, and in terms of actual gameplay content.
What has been going on at Microsoft Studios recently, and is it going to change? Let's take a look.
Microsoft has heard the criticisms
It's important to note at the outset here that Microsoft has heard the recent criticisms over its first party titles loud and clear. Gaming lead Phil Spencer agrees that the division needs more RPGs, that Xbox needs more support from Japanese developers, and that ultimately, the company wants to invest in building new, deep experiences.
Microsoft has heard the recent criticisms over its first party titles loud and clear.
On a personal note, I haven't been particularly happy with Microsoft's first party efforts. While I really enjoyed Ryse and Quantum Break, I felt as though they would come into their own once the studio addressed feedback in a sequel. Those sequels are probably never coming. I'm not a huge fan of Halo (sorry), nor am I a big fan of racing games like Forza. I'm a huge Gears fan, but I'm starting to get tired of the linear, no-exploration-allowed format that the series is known for.
I was massively excited for Sea of Thieves, but somehow convinced myself that the final product would have more meat to it. I find its emphasis on cosmetic items to be a lacklustre gameplay hook, and recent online games like Monster Hunter: World simply offer far more depth and activities from a co-operative gameplay perspective. I enjoyed ReCore for what it is, but the game was lacking in many ways. I'm looking forward to State of Decay 2 and Crackdown 3, but my experience with other recent Microsoft titles has convinced me that I should temper my expectations.
A lot of Microsoft's biggest wins seem to have been exclusive publishing bets on artistic titles like Ori and the Blind Forest, and most recently Cuphead – and that's great, but when Xbox's biggest competition is offering much larger games with Hollywood-level production values, you can understand why some Xbox fans have become anxious about the direction Microsoft has been taking Xbox as of late.
How did we get here?
Clearly Microsoft doesn't want to give Sony or other competitors an advantage where possible. The 4K Xbox One X is a direct response to early criticisms of the original Xbox One being underpowered, and Microsoft has been a leader at improving and refining the operating system itself. I believe that the current issues surrounding games represents of lack of foresight, bad luck, and poor gambles.
Recently, Microsoft re-organized itself, cutting out former Windows & Devices chief Terry Myerson, while elevating Phil Spencer and the gaming operation to the senior leadership table. Windows itself has now been cannibalized by other divisions, splitting it under a new "Experiences & Devices" unit under Executive Vice President Rajesh Jha and the "Cloud and AI" group under Scott Guthrie. Surface creator Panos Panay is now the company's chief product officer, and since last year, Phil Spencer truly leads the charge for gaming, for the first time.
I'm not going to sit here and claim to know all the nuances, business decisions, and constraints suffered by Xbox and the Windows team in the years leading up to this point, but ex-Xbox lead Don Mattrick, and ex-Windows chief Terry Myerson are frequently blamed by people I speak to within the company for the issues faced by Xbox today.
I've been told that the budget for exclusive publishing deals, which previously led to games like Quantum Break and Ryse, has been low, and Xbox has been using the budget it does have to place an emphasis on other areas. With Spencer leading the charge, answering directly to CEO Satya Nadella, this should now change – but it's going to take time. I've heard that big budget games are definitely on the cards.
In a perfect world, we might have both quality exclusive games and features, and that certainly seems to be the goal Xbox is now working towards. Notes in Microsoft's recent investors call emphasized that operating costs across the entire company were going to increase, due to an uptick in gaming investment.
It might be of little comfort to people who want those photorealistic action games right now, but it's important to understand that Xbox, as a business, has to take these external "bigger picture" threats more seriously – particularly when Xbox has hundreds of amazing multiplatform titles driving its growth.
What the future looks like
Those PlayStation single-player exclusives might be getting all the press attention and Metacritic accolades, but from a business perspective, they aren't as important as people might want to believe. It might sound counter intuitive, but you don't make money in the console game by selling consoles alone. This is why Microsoft has made its line up available on both PC and Xbox moving forward – the platform across Windows 10-based devices is built to sell software and services, not specifically hardware. Consoles themselves have wafer-thin margins, and should be seen as an entry to the wider Xbox software and service ecosystem across both PC and consoles. Particularly as the generation comes to a close, Microsoft doesn't need to rely on exclusives to sell entry to its ecosystem, because hot multiplatform titles like Fortnite, PUBG, Far Cry 5, and staples like Call of Duty have been doing the heavy lifting. Unless something goes drastically wrong, I'd say it's a fair bet that Red Dead Redemption 2 will sell more consoles for both Xbox and PlayStation than any "exclusive" game this year.
While it isn't a big issue now, it will become one in the near future if Xbox doesn't fix it.
That's could be why during the budget-light years, Microsoft's focus has been on multiplayer titles, "games as a service" with rolling updates, and subscription fees, like Xbox Live and Xbox Game Pass. Upselling services to players invested in the platform it does have provides a healthier return than building a huge Hollywood-style blockbuster single player game, particularly when Microsoft's third-party partners are doing the same thing anyway, often with better visuals on Windows PCs and the Xbox One X. My backlog on Xbox is insufferably large, it's not like the console has "no games" as some like to claim.
Xbox console sales are up year-over-year, despite the criticisms from mainstream press and core fans on social media over the games issue. Would they be up even more if Xbox had titles like God of War under its belt? No doubt, but considering the constraints placed on Xbox in recent times, they are positioned well to fix this issue. It's completely fair to criticize the upper echelons of pre-re-org Microsoft for not recognizing the need for Xbox to be better in this area sooner. While it isn't a big issue now, it will become one in the near future if Xbox doesn't fix it.
If cloud streaming and Game Pass-style subscription services are the future, exclusives are going to become critical to the success of Xbox moving forward. If every cloud subscription service has equal performance (and sure, they may well not, but assuming they do), it'll be exclusive content and features that dictate where you subscribe. Think Amazon Prime Video vs. Netflix Original programming.
In a perfect world, Microsoft would have major exclusives for every month of the year hitting Game Pass to keep subscriptions rolling. I have been told that Sea of Thieves' retail sales were boosted through Game Pass via streaming services. The virality helped push the game to number 1 on Twitch, which in turn led to sales.
Of course, the likelihood of getting major "AAA"-quality games for every calendar month is far-fetched at best, but big updates for exclusives, episodic games, and deals with third-parties can certainly help to plug the gap. Keeping people locked into the ecosystem will serve Microsoft's gaming efforts as the industry moves deeper into the cloud. Theoretically, subscriptions could also lead to a wider diversification of content too, as seen with Netflix. I don't think any company is better placed to achieve this in gaming right now.
Playing the long game: but not forever
Despite the noise, Microsoft can afford to play the long game with getting its exclusive line-up in order, but certainly not forever. Sony has its own fledgling streaming service known as PS Now, and rumors about Google, TenCent, and Amazon getting into the game have been swirling for some time.
Xbox has been using its resources to help fend off these future threats from the big tech companies. It will take time, but with the re-organization in place, I am confident that Xbox is extremely well positioned to grow out an exclusive lineup that fans crave, and future fans will desire. Believe it: Xbox is in it to win it.
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