The next-gen console war between the Xbox Series X and PlayStation 5 promises to be truly spectacular, with both the American and Japanese console makers poised to deliver pixel-pushing powerhouse hardware, futuristic new features, and eye-poppingly immersive games.
Interestingly, however, as reported by video game website Polygon (opens in new tab), Head of Xbox Phil Spencer doesn't consider Sony or Nintendo as its main competitors in the next-gen console war at all, dismissing them in a recent interview as "out of position" in the market.
“When you talk about Nintendo and Sony, we have a ton of respect for them, but we see Amazon and Google as the main competitors going forward,” stated Spencer. "That’s not to disrespect Nintendo and Sony, but the traditional gaming companies are somewhat out of position. I guess they could try to re-create Azure, but we’ve invested tens of billions of dollars in cloud over the years.”
A "ton of respect", but "out of position", and "not a main competitor"... 🤔
"I don’t want to be in a fight over format wars with those guys while Amazon and Google are focusing on how to get gaming to seven billion people around the world. Ultimately, that’s the goal,” he then added.
Now, look. What Spencer says here, with a focus on cloud gaming, is understandable and, certainly in part, accurate. Cloud gaming services, such as Google Stadia, GeForce Now, Xbox Game Pass and PlayStation Now, are most likely the future of mainstream gaming.
As T3 noted back in April 2017, in our "How the console war ends by 2020" feature, the days of local hardware-packed games consoles are numbered, and cloud gaming services are about to see a period of rapid growth and adoption. And, in this sense, what Phil says is correct – Microsoft are better positioned right now with its Azure platform for that new market.
Shade has been thrown.
Interestingly, in the same interview comments, Spencer also then went on to suggest that Microsoft is “willing to cooperate with Nintendo and Sony on initiatives like allowing gamers on the various companies’ systems to play with and against one another.”
And at T3 we feel that here's the rub. Right now Microsoft is coming off a console generation where it has been firmly beaten by Sony. Sony has, to date, sold twice as many PS4 consoles than Microsoft has sold Xbox One consoles (opens in new tab), with the American firm registering around 46 million (opens in new tab) compared to Sony's 106 million (opens in new tab). And, simply put, if cross-platform play like this were to be agreed by Sony and Nintendo, the result is that it would almost certainly be a benefit to Microsoft. If gamers know that they can game with their friends no matter which console they have, then many more might be tempted to make a jump from PlayStation to Xbox come the holiday season 2020.
Sony, in the position of strength right now, obviously wants to protect that install base, which only days ago was explicitly mentioned by the company's chief financial officer, Hiroki Totoki in an investor call. For the Japanese console maker, transitioning those millions of gamers around the world from PS4 to PS5 is the primary concern.
Sony will be aware of the approaching threat from cloud-based gaming services, and at least in a small way has jumped into that market with its PlayStation Now service. As Spencer notes though, while banging the drum for Xbox, naturally, this is something that Microsoft is currently ahead of Sony in. This is almost certainly why, as reported by the BBC (opens in new tab), Sony has apparently signed a deal to use Azure's tech, to some degree, going forward to host its own game streaming service.
Are these recent comments by Spencer, then, a way to dampen interest in the PS5, or are they yet another small reminder that, at least in Xbox HQ, new cloud gaming rivals should be what all traditional console makers should be concerned about?
For gamers around the world, though, we think it fair to say that traditional console gaming experiences are set to be with us for the foreseeable future, existing alongside new cloud-based alternatives. And, in that sense, the upcoming release of the Xbox Series X and PlayStation 5 is something to be very, very excited about.
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