In a significant shift from the traditional console business model, Microsoft’s head of gaming, Phil Spencer, has expressed a desire to open up the Xbox platform to multiple digital storefronts, allowing players to purchase games from retailers like the Epic Games Store and itch.io alongside the console’s native store.
Speaking at the Game Developers Conference 2024 (GDC), Spencer outlined his vision for breaking down the “walled gardens” that have long defined the console gaming ecosystem. Drawing parallels with the open nature of the PC gaming market, he emphasized the value of giving consumers a choice in where they acquire their games.
“Nobody would blink twice if I said, ‘Hey, when you’re using a PC, you get to decide the type of experience you have [by picking where to buy games],'” Spencer remarked. “There’s real value in that.”
The Xbox chief acknowledged that the traditional approach of selling consoles at a loss and recouping profits through game sales is becoming increasingly challenging. With the rising costs of components and the console market’s stagnant growth, he questioned the effectiveness of this model in today’s landscape.
“[Subsidizing hardware] becomes more challenging in today’s world,” Spencer said. “And I will say, and this may seem too altruistic, I don’t know that it’s growing the industry. So I think, what are the barriers? What are the things that create friction in today’s world for creators and players? And how can we be part of opening up that model?”
Spencer believes that offering more storefronts on Xbox consoles could enhance the gaming experience by fostering a more seamless and integrated ecosystem. He drew attention to the fragmented nature of console gaming, where users must navigate different “closed ecosystems” to access certain games.
“If I want to play on a gaming PC, then I feel like I’m more a continuous part of a gaming ecosystem as a whole,” he explained. “As opposed to [on console, where] my gaming is kind of sharded – to use a gaming term – based on these different closed ecosystems that I have to play across.”
In addition to embracing a more open storefront approach, Microsoft has also been pivoting toward a multiplatform strategy, releasing its games on rival platforms like PlayStation and Nintendo. Spencer attributed this shift, in part, to the company’s research into the purchasing habits of Generation Z.
“This notion that Xbox can only be this one device that plugs into a television isn’t something we see in the Gen Z research because nothing else is like that for them,” Spencer said, noting the generation’s fluid movement across different devices and ecosystems for their entertainment needs.
While the specifics of how this open storefront model would be implemented remain unclear, Spencer’s comments signal a potential paradigm shift in the console gaming industry. By embracing a more open and inclusive approach, Microsoft aims to adapt to changing consumer behaviors and foster a more seamless gaming experience across multiple platforms and storefronts.
