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Here's why Microsoft is going to let you play Xbox games on rival consoles

Peter Kafka   

Here's why Microsoft is going to let you play Xbox games on rival consoles

Big news for (some) video game players: Microsoft is going to stop making you use Microsoft devices to play (some) Microsoft games.

On Thursday, the company is set to announce that some games that have been exclusive to Microsoft's Xbox console are going to be available on rival consoles from Sony and Nintendo, The Verge's Tom Warren reports, citing sources familiar with the matter.

The news is a "seismic shift in strategy," he adds.

My educated guess is that Warren's reporting is correct. But I think the move is less of a seismic shift and more of a white flag: Microsoft lost the console wars a long time ago, and this is them accepting that fact.

Very short summary of the console video game business: It's common for video game hardware makers to also own or license games that are exclusively for their devices. The newest Spider-Man game is only on PlayStation. Mario Kart is only the Nintendo Switch. Halo is only on Xbox. The idea is that a single game (or several games) will be enough reason for a gamer to buy a specific device.

The problem for Microsoft is that while that strategy has worked for its competitors, it has been a failure for Xbox, which remains stubbornly in third place with no real hope of moving up. So, announcing that some Xbox-exclusive games will no longer be exclusive is an obvious sign that Microsoft is rethinking a strategy it has spent a lot of time and money pursuing.

I've asked Microsoft PR for comment. It's worth underscoring that Microsoft is still very much interested in gaming, period — it just spent some $70 billion buying Activision, the giant game publisher that owns titles like Call of Duty and Candy Crush.

But the very important caveat here is that Microsoft has already been moving away from its strategy of tying software and hardware together: For several years, it has been selling Game Pass subscriptions — essentially, Netflix for games — that package a bunch of Xbox-owned games along with those made by other developers. Game Pass works on both Xbox consoles and on PCs. It starts at $10 a month.

The idea there is simple, too: After spending years trying to make the Xbox the device that would let Microsoft "own the living room," Microsoft was going to instead use its gaming division as a services business, where it could make money from consumers no matter what device they owned.

Apple started doing the same thing in 2019 when it launched Apple TV+ and, at the same time, made the service available on rival devices like Rokus and Samsung TVs. (It's also worth noting that when Microsoft was trying to get the Activision deal past regulators, it had to make all kinds of pledges promising not to lock up the new games it was buying and make them exclusive to Xbox)

But while Microsoft would love to have Game Pass available on rival devices from Nintendo and Sony — a move that really could shake up gaming — that seems incredibly unlikely: There's no incentive for those companies to make a move that helps Microsoft make money but could cannibalize their own software sales.

Maybe, as Warren reports, Microsoft will also announce new hardware plans at the same time it makes the new software change. But it's hard to see how the games move alone is going to be anything more than Microsoft accepting reality.

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