By Michael Mendis
The Electronic Entertainment Expo (E3) in 2013 was a major moment for gaming. With both Microsoft and Sony set to release their next consoles at the end of the year, this convention was the biggest opportunity for each company to promote their upcoming products to gamers and to the world. And when all was said and done at the end of the show, the outcome was clear: gamers loved Sony’s PlayStation 4...and they hated Microsoft’s Xbox One. It wasn’t really debatable, because it wasn’t really close. Fast forward to 2018, though, and the tone has shifted: while the PS4 is indeed selling like hotcakes, the Xbox One is also quite successful in its own right, and its future is exciting. What happened? How did Microsoft win back gamers and stay in the fight against a formidable rival? Microsoft is a big company, and many people rightly share the credit, but the one person at the forefront of it all is Phil Spencer.
Phil Spencer started with Microsoft in 1988 as an intern. When Microsoft launched into the console gaming scene with the original Xbox in 2001, Phil got heavily involved with games, specifically Microsoft Studios, the company’s in-house game development division. While at first he oversaw mainly European developers, he worked his way up the corporate ladder to become the Corporate Vice President of Microsoft Studios in 2009; it was a prestigious position, giving him influence over all the company’s exclusive games and gaining him a following amongst diehard Xbox fans (a following he has cultivated through his presence on Twitter and his appearances at major conventions like E3). But Spencer’s ascendancy was far from over. Ironically, it was one of Xbox’s biggest stumbles that gave him the opportunity to advance even higher.
In 2013, Microsoft ran into trouble with the announcement of the Xbox One console. What was supposed to be a grand moment of triumph for the company turned out to be a disaster, as gamers voiced their disapproval of Microsoft’s upcoming strategy with their new machine. As it was first planned, the Xbox One wouldn’t use a disc to authenticate the use of a particular game; rather, it needed what was essentially a constant connection to Microsoft’s servers via the internet. The intent was to create a platform in which you no longer needed the disc to play your game, but the downsides were nasty. Those without reliable internet connections would be unable to play games, even ones that didn’t have any online features. You also wouldn’t be able loan or sell your games, since the discs were no longer of any use once the game was downloaded onto your hard drive. On top of the internet problems, the Xbox One wasn’t as powerful as the rival PlayStation 4, and it cost more, too, thanks to the Kinect camera that was bundled with every console (a camera that most gamers didn’t really care about). Microsoft scrambled to reverse their internet connection plans and managed to release the console without them, but the damage had already been done; gamers didn’t trust Microsoft, and ran to Sony in droves, who welcomed them with open arms and a very gamer-centric marketing campaign. Although the Xbox One managed a decent launch during the holiday 2013 season, PS4 sales were through the roof, setting the pace for the new console generation.
Heading into the new year, Microsoft knew it had to make changes in its leadership, and decided to give the Xbox division a heavier gaming focus in order to remain competitive with Sony. As the head of Xbox’s first-party game development, Phil Spencer was perfectly positioned to take advantage of this, and was promoted to Head of Xbox in April 2014. Now he was over the entire Xbox division, overseeing not only the games themselves, but also the teams that made the console hardware and the various services (such as Xbox Live) that ran on the platform. And under his leadership, there have been major changes to Xbox.
Spencer’s first priority in his new role was hardware. He couldn’t make drastic revisions to increase the power of the Xbox One - that console was already released and the hardware largely set in stone - but he could find other ways of making it more appealing to gamers. He made the move that many thought Microsoft would be unwilling to make: Xbox One consoles started to be sold without the Kinect, which allowed Microsoft to drop the price to that of the PS4. He also pushed his engineers to focus their efforts on ensuring that game developers both inside and outside of Microsoft could eke out as much power from the console as possible. And the hardware team started working on a new, more powerful machine, one that would stand alongside the Xbox One and play the same games, only better. This became known as the Xbox One X, which Microsoft touted as a “monster” and the “world’s most powerful console”, and was released in November 2017.
Spencer’s impact on Xbox goes beyond just hardware, however; as his hardware teams worked secretly on the Xbox One X, other teams at Microsoft introduced various new features for Xbox One owners. Backwards compatibility for select Xbox 360 games, a feature that was intended for the launch of the Xbox One until the internet connection fiasco took center stage, was formally launched in 2015, and two years later was expanded to include original Xbox titles as well. Spencer also pushed for further integration between Xbox consoles and Windows PC gaming; in 2016, the Xbox Play Anywhere initiative was announced, in which anyone who purchased a participating Xbox game would get a copy for Windows 10 PCs for free (and vice versa), with all save data carrying over from one platform to the other. And most recently, Microsoft introduced Xbox Game Pass, a Netflix-style subscription service through which gamers can pay $10 a month for access to over one hundred games.
While these positive changes have restored much of the goodwill amongst gamers that was lost a few years ago, it hasn’t all been smooth sailing; with the cancellation of a couple anticipated games, as well as the shuttering of one of Microsoft’s most well-known game development studios, many gamers are still somewhat skeptical of the Xbox brand. Nonetheless, the improvements to hardware and services have allowed Xbox to stay relevant even in the face of stiff competition. Microsoft’s top executives were pleased enough with Spencer’s leadership that in 2017 they promoted him once again, this time to Executive Vice President of Gaming. Now, Spencer has his own seat on the company’s executive leadership team and answers directly to Microsoft CEO Satya Nadella, making him one of the most powerful individuals in the industry. And his work isn’t done yet; he recently announced an increased investment in their first-party game development, seeking to buy and create more studios to make exclusive games (another area in which they are often perceived as being behind the competition). Phil Spencer’s influence on the gaming industry is greater than ever, and the impact of his work at Microsoft will reverberate for years to come.