Xbox’s June showcase is the most important in its history

In theory, Microsoft approaches this year’s Summer Game Fest and Xbox’s annual showcase on June 9 from a position of fantastic strength: Microsoft’s acquisition of Activision Blizzard has boosted its gaming division’s revenue and turned it into a super-publisher the likes of which the gaming industry has never seen. It now owns an amazing war chest of hall of fame game properties that includes Call of Duty, Minecraft, Warcraft, Halo, Fallout, Diablo, The Elder Scrolls, Doom, Gears of War, Forza and much, much more.

Microsoft gaming chief Phil Spencer and his team are also well-positioned to make a strong impression in what is shaping up to be a down year for the rest of the industry. Having already admitted that the PlayStation won’t see any big exclusives this year, Sony launched a short, low-key showcase last week. Nintendo Delays Its Successor Switch Console Until 2025; at her own show later in June, she’ll be forced to lean on whatever games she’s been able to put together for the Switch’s final holiday season. And Summer Game Fest MC Geoff Keighley moved to moderate anticipation for his June 7 wrap-up presentation.

Microsoft has faced similar hiatuses in its release schedule in the recent past, but in this regard, it is now simply too big to fail. As for Activision Blizzard, Microsoft will highlight its Call of Duty ownership with a special preview highlighting this year’s Black Ops 6and may point to major expansions coming to both this year World of War and Diablo 4. Bethesda has Indiana Jones and the Great Circle show plus possible Star field expansion and heavily rumored new game in the Doom series. Meanwhile, Xbox Game Studios is reportedly ready to reveal the new Gears of War and show more Microsoft Flight Simulator 2024 and obsidian fantasy role playing game Open.

It seems like an afterthought that one of these three powerful gaming brands is also appearing on gaming consoles. But that’s exactly Microsoft’s problem – or at least one of them – as it prepares to deliver this crucial address to fans. In 2024, Xbox finds itself in the grip of a deep identity crisis.

Xbox fans and the wider gaming community have been rocked in recent months by news that Microsoft (which already releases all of its games simultaneously on Xbox and PC) was planning to move deeper into cross-platform publishing by launching previously exclusive console titles. on Nintendo Switch and PlayStation 5. Microsoft finally did Pentiment, Hi-Fi Rush, Sea of ​​Thievesand Groundedbut reports persist that much larger properties—including Star field, an Indiana Jones game, and franchise gems like Halo — are also on the table. Windows Central reports that there is no “red line” for this initiative, codenamed Latitude, and that additional versions of PlayStation games for Xbox are in development.

The move has a simple business goal – to increase profit margins on Microsoft’s own games in a challenging market – but completely upends the core marketing strategy for console gaming, in which the value and relevance of the platform is deeply tied to its exclusive games. This has become a tenet of almost religious belief for players, and the suggestion that it might be abandoned is mind-boggling.

Context for Microsoft’s decision is also important. With its push to PC, cloud gaming, mobile and prepaid services with Game Pass and purchase Minecraft, Microsoft has clearly signaled for a decade that it is thinking beyond Xbox consoles. But Activision Blizzard’s acquisition went even further, transforming the company overnight into a massive multi-platform publisher.

Image: Treyarch, Raven Software/Activision

Because of the regulators, Microsoft wouldn’t be able to make Call of Duty an Xbox exclusive, even if it made sense (it doesn’t). It’s no more likely to do the same with Blizzard games. A huge part of Microsoft’s gaming business now rests on PlayStation, Nintendo and PC, and this is bound to change the strategic thinking of Xbox management.

But while Microsoft’s gaming horizons have expanded, the same cannot be said of the Xbox platform itself. According to analysts cited in the Financial Times, the Xbox Series X and S will outsell the PlayStation 5 console three to one in 2023. Microsoft does not disclose console sales figures, saying they do not provide an accurate picture of their console’s overall health. game business. Lists data for Game Pass, but only occasionally; after a period of rapid growth, the service appears to have stagnated somewhat at 34 million subscribers.

There are still other troubling symptoms. In early 2024, Microsoft laid off 1,900 employees in its gaming division. This was very bad, although in line with the rest of the gaming industry and probably not the worst. That came in May, when the company shut down several Bethesda studios, including Arkane Austin (Dishonored, Redfall) and Tango Gameworks (Evil within, Hi-Fi Rush). The closure brought back unpleasant memories of the bungled management of other Microsoft studios in the past — most notably Fable developer Lionhead, which was shut down in 2016.

Image: Microsoft

The cumulative effect of all of this raises huge existential questions for Xbox and for Microsoft’s gaming ambitions. What is Xbox Now? Do consoles even matter? Is Microsoft now just a massive 3rd party publisher – a bigger EA? Does the Game Pass strategy work? How does owning Call of Duty help with any of this? How was Halo, the flagship Xbox franchise, allowed to deteriorate? And perhaps most worryingly for gamers outside of the Xbox community: Microsoft can be trusted to keep tabs on this sprawling empire and responsibly manage all these beloved properties and famous studios without causing irreparable damage like we saw with Fable and Lionhead ?

On Sunday, Spencer and his team have to do something much more subtle and challenging than just issuing a megaton of game announcements. They need to organize all of this size into a coherent vision of Xbox’s place in the industry, its relationship with fans, and its strategy going forward. They need to be extremely clear in their messaging about the exclusivity of all upcoming games. They need to demonstrate commitment to Game Pass (this is where Call of Duty comes in – regulators insist the series remains available on competing cloud services and consoles, Game Pass is the only strategy game Microsoft has available with CoD). And they have to demonstrate commitment to the console’s hardware; revealing a new handheld would go a long way here.

To be fair to Xbox management, these are uncharted waters. No one has tried to combine the roles of platform holder and third-party publisher before, and whether this move even makes sense remains an open question. On Sunday, Microsoft needs to show the gaming community why it was worth doing, and how it will make for a better future for both the industry and the art form — rather than just eating it up and diminishing it.