Microsoft’s flip-flopping on Xbox strategy has even former PlayStation execs speaking up. Former Sony Interactive Entertainment America president Shawn Layden recently said Xbox is now “in trouble” — largely because Microsoft never truly committed to one path, and when they did, they quickly changed direction again. Especially on whether games should remain Xbox exclusive, Microsoft has been switching between “cross-platform publisher” and “console platform” in recent years.
Platforms Need Exclusives to Matter
Layden believes that if Xbox wants to compete with PlayStation, it needs to operate as a real gaming platform, and platforms need exclusive titles to establish meaning. The problem is Microsoft now has a massive game publishing business. If the company chooses to become the world’s biggest game publisher, then theoretically they should bring games to all platforms to reach more players. The issue is these two strategies are hard to execute perfectly simultaneously. Layden put it plainly: “You can’t succeed at both.”
Game Pass Has Become Another Dilemma
Beyond the mixed exclusive strategy, Layden believes Game Pass has put Microsoft in another bind. When major games launch day-one on subscription, players naturally wonder why they should pay $69.99 for a game. This could also undermine revenue from selling individual AAA titles. Layden even thinks it is hard for Game Pass to truly generate big profits for developers, because the subscription model conflicts with the traditional hit breakeven with one breakout game business model.
Can Asha Sharma Save Xbox?
Xbox is currently undergoing major restructuring. New Xbox CEO Asha Sharma is reorganizing the entire gaming division, including layoffs, studio consolidations, and major IPs being handed to teams like Activision. Layden has not been harsh on Sharma, saying she is trying to get the ship back on course. However, there is still no clear answer on which path she will ultimately take Xbox.
More awkwardly, Microsoft recently denied that Xbox is for sale, with CEO Asha Sharma directly stating Xbox is not for sale. So the real question might not be will Xbox be sold but rather does Microsoft want Xbox to be a console, a platform, or simply the biggest publisher in gaming? If that question does not get an answer soon, Xbox might continue stuck in this in-between state.