Phil Spencer talks indie game developers, the next Xbox hardware, and the Microsoft business model while visiting Australia.
Jason Imms: The Australian games industry primarily independent, small studios, how does that affect a tour for someone in your role? I imagine you primarily work with larger-scale developers, so how do you approach the Australian, mostly-indie industry?
Phil Spencer: “On Thursday I’m going to be spending time with some of our smaller ID @ Xbox partners. Actually, in my job in general I probably spend as much time with independent developers, smaller developers, as I do the large publishers. As a gamer I’m a big fan of a lot of the diversity and creativity that comes through our ID @ Xbox program. I think a lot of the time those smaller studios identify future trends in gaming earlier than some of the big publishers are willing to go and invest in. I find as a platform holder, I get a lot of great feedback and input on things that we could do to make indie developers lives better, and make their games more successful. So I try to spend as much time with the ID community as I can! I think specifically with things around cross-play, like with the Rocket League guys – obviously not Australian – but they were a team that was really pushing us to play across Xbox and PC. That’s a feature that was really driven by an ID partner. Other things like that really come from all the work we do with the ID program. I have a lot of fun there.”
JI: I hear you’re going to visit the Arcade while you’re in Melbourne?
PS: “Yeah! Chris Charla and I were talking about it right before I came, I guess he was there a couple of years ago. He said it was a great scene, a lot of studios in a small concentrated area, getting to see a lot of things that are going on. I tend to go from game to game, just put a controller in my hand and let me play, and then talk to the developers about what they’re trying to do. As we know about the gaming community, whether they’re gamers or developers, they’re always open and honest about their feelings on things, so I’m sure we’ll get some good feedback on how we can be supporting them more, and I’m looking forward to that!”
"As a gamer I’m a big fan of a lot of the diversity and creativity that comes through our ID @ Xbox program."
JI: The ID @ Xbox program is a curated program that surfaces certain games that meet a set of mysterious criteria, and you also allow indies to simply self-publish on the platform–
PS: “Yeah, you used the word curate… I’d say what we’re really looking to do is make sure that when someone is looking to publish something that the app or game is actually going to do what they say it’s going to do. I don’t want to be in a position where I’m dictating taste or something in games. But we also know people who buy the console have a certain expectation for content, there’s always a judgement line there. I want to make sure that if you’re a developer and you want to build a game for Xbox then you can do it.”
JI: How then do you see smaller, younger, more inexperienced studios that have really great ideas getting themselves a position in the ID @ Xbox program?
PS: “One of the things that we did over the last couple of years is we launched the ID @ Xbox program, and then over the last two years we’ve been talking a lot more about our focus on PC, and the PC gaming community embracing the ID program on PC, and the game preview program on PC and also bringing that to console. Letting developers turn their retail Xboxes into a development kit so developers don’t have to fund getting their own development kit, and then opening publishing to the Xbox. We’re on that journey, I’m not going to tell you we’ve got that all figured out, that it’s all done, but I think the journey is all about trying to give the smallest, least experienced developers – and I don’t mean that in a bad way – access to the largest audience of gamers they can reach across both Windows and Xbox, to have the tools that run across both platforms so they can effectively build their game once and have it run on both Xbox and Windows, and allow them to stay engaged with their gamers and monetise through their game as consistently as possible across those platforms. Really trying to help those developers that are just getting started, that maybe aren’t building the next 2-3-million-unit selling game, that are kind of bootstrapping their capabilities and their studio with as open access to the platform as we can possibly give them.”
JI: Scorpio is coming! It’s a massive upgrade in capability over the Xbox One and also competing systems. To your mind, does Scorpio represent an interactive improvement over the Xbox One, or is this a new generation of consoles?
PS: “HA HAAA good question. I’ve watched the debates on the internet of whether it’s a new generation or if it’s an incremental upgrade on this generation. I think in some ways the terminology we’ve used in the past is going to break down a little bit. But I’ll say we’ve picked a certain capability of the console for Scorpio that we wanted to be enough visually and gameplay better than the consoles you’re playing on today, that customers would notice. Because us trying to sell you a marginal upgrade over the experience you have now didn’t feel like something that would be a huge customer win, gamer win, or great product for us. So I’m excited by the early things that we’re seeing as we’re focusing on Scorpio, but I’m also really excited by the market reaction to the Xbox One S. But I think for gamers you’re going to see something that looks significantly different to what you’re playing today. But our goal and our program is that developers will be focusing both on Xbox One and Scorpio so people can safely understand that their investment in their Xbox One or Xbox One S means they’re still going to get great games, and that Scorpio just opens up more capability for developers to do higher resolution work.”
JI: There are hardware updates coming for both major platforms, can you cover off on some of the needs that have driven these updated consoles?
PS: “I don’t know about… you say ‘needs,’ all of this gaming is kind of a leisure fun activity. But we know that gamers are always at the forefront of early technology adoption, and we want to make sure that consoles, where a traditional console generation of five or six more years, the technology has moved significantly beyond the technology that was initially set at the beginning of a console generation. We do platform work that as new GPUs are built, as we get higher bandwidth memory, as we can bring new technology to the console we’re able to do that and hit real design points that gamers will recognise as they’re playing a game. We designed Scorpio around the 4K televisions and 4K games that we saw and we see, and we said we want to build a console that can natively support a true 4K game. That was the design point we picked for Scorpio, knowing that most people won’t have a 4K TV, so people that won’t upgrade their TV right away we’ve also got a console upgrade for those people.”
JI: Back during the Spring Showcase in February, you spoke about a possible future for consoles in which they could “ride the same curve as PCs,” presumably with regard to their ability to be upgraded or become more capable over time. At what point does an Xbox become a tiny PC if it’s riding that same curve?
PS: “I think PCs by definition will always be always be more iterative and more continual in their upgrade capability, and that’s something that PC gamers really value. Obviously at Microsoft as the Windows company, we respect that I can upgrade my keyboard, I can get a faster mouse, I can get a better monitor, I can replace my CPU – that kind of tweaking and building that goes on is incredible. On console I just think it’s a different consumer device, and we wanted to build something that embraces what’s going on in PC, not compete with it. We see our best Xbox customers are also big customers on PC, and we wanted to make sure we were building a product that’s inclusive of both. On the console side I think a faster iteration on the hardware is really a platform focus, of how do we build a platform so that game developers are building games, and they can as easily as possible target multiple consoles. We think we’ve landed that with Xbox One S and Scorpio with the partners that we’re working with.”
JI: What would you say to someone that is on the fence about whether to buy Scorpio, or upgrade their PC?
PS: “Y’know, the real focus of our strategy is – I’ll obviously have my input… well not my input, but I’ll have a point of view there. But we want to embrace the customer regardless of which decision they make. If they decide they want to build their PC and play games at the highest resolutions possible, we want to make sure that the games we’re building, our Xbox Live service, our platform capability unlocks the full potential of the PC that they’re building with DX12 and all the other work that we’re doing. If they decide they want to sit on the couch with a controller in their hand and play games on their 4K television with HDR at the highest resolution at framerates that allows, we wanted to support that as well. With Play Anywhere, what we’re really saying is we don’t want your platform choice to dictate the games that you get to play, or where you buy your games. I’m sure you play a lot of games, I do as well! Now when a game comes out on PC and console, I have to make this kind of weird decision of where are my friends going to play? If they’re going to play on PC then I’ll go buy the PC version. If they’re going to play on console, I’ll go buy the console version. It’s really an artificial structure, an artificial constraint in our world. Really what we should do, and this is what Play Anywhere is about is say ‘hey, if you’re going to buy gears of War 4, Forza Horizon 3, or ReCore, go buy the game that you want and we’ll allow you to play it on Windows with your Windows friends, or on console with your console friends, and for a lot of our games, to play cross-platform with the games that we’re building, really putting you as the gamer at the centre, and not the device that you picked.”
“I think PCs by definition will always be always be more iterative and more continual in their upgrade capability."
JI: It’s a fairly well-known fact that console manufacturers don’t make as much on hardware as they do on software – software is where the big money is. Given that we’re talking about an upgrade cycle that has similarities to the smartphone upgrade cycle, does this represent an attempt for Microsoft to start making money on hardware?
PS: “Ahh, no. The business model for console is pretty set. I like the relationship that it’s able to build with our customers and the number of consoles that are sold, really across the industry, it’s not really just a pure Xbox point. Y’know when you look at the number of consoles that were sold last year against what were sold this year, relative to any individual PC gaming spec that’s out there, you sell a lot more consoles. That opens up a great market, and those customers buy a lot of games, play a lot of online, buy a lot of content for those games, I think that business structure will stay. You’re absolutely right that if you’re losing money on a console and you have somebody upgrade that console every year, and they’re not your best game customer in terms of the games that they buy, that can be a struggle for the overall business. But I think what we’re going to find is that our early adopters for our new hardware are also our best gaming customers across gaming content, and gaming accessories, and everything else that they do. We’re going to learn as we go forward, but I’m confident in the activity that we have on our network from our consoles.”
JI: Does Xbox intend to make all first-party published games Play Anywhere titles going forward?
PS: “Yeah, that’s where it starts. People have asked me, and they use the word “all,” and I always hesitate because I envisage that in a couple of years from now if we do a game that’s so mouse-and-keyboard specific, or so television specific that maybe there’s a reason it wouldn’t be? So maybe little careful in how we think about using the world “all” but yeah, the plan is for our first-party games to be available on both Xbox and Windows. Games like Minecraft you obviously see it available on a lot more places than that. And to make sure that gamers can play our games on the platform they want to play them on.”
JI: Given the list of games that are currently already Play Anywhere capable, you clearly make that an option for third party developers. Is that something they have to nominate themselves for, or do you select them?
PS: “It’s a little mixed. I’d say, going back to our earlier question about the ID community, I think the indies understand that selling their game and getting it out to as many people and getting as many people playing their game as possible is a real benefit. So we’re definitely seeing a really good update in Play Anywhere with the ID program. I’d say some of the bigger traditional third party publishers, they want to see how this works out for us. There’s always a fear that ‘are you giving away two games for the price of one?’ I’ll say I think there are very few people that actually buy a game twice, once on PC, once on console. So really what you’re doing is you’re just allowing the customer you already have to play your game more often. In today’s world, engagement on games is more engagement on games is almost always a good thing, given multiplayer and the business models around those games. But the ID community has given us a good reception for Xbox Play Anywhere, and I think the third party big publisher adoption will happen in time. I think it’s really going to be up to gamers, do they find it a feature that they want, and how vocal are they about that? We’re seeing early word from ReCore and Forza Horizon 3 that people are using the feature and finding it useful, which is great.”
JI: Can you state whether or not Play Anywhere has affected sales (up or down) in any meaningful way?
PS: “Man, I wish I could! As a gamer I’m a big proponent for the feature. I think we’re just so early. We’re going to learn, but even there we obviously don’t have – I’ll use Forza Horizon because it’s launching today – I don’t’ really have a good A/B test to say what it would have done without Play Anywhere, or even what it has done with Play Anywhere! What I can say is over the weekend, where we had the Ultimate Edition for Forza Horizon 3 out, we’re seeing a lot of people playing on Windows. Whether they would have bought it if it wasn’t Play Anywhere, or would have bought it already on PC, I’m not sure we’ll ever know. But I can say all up with just the number of gamers that are playing the game on Xbox and on Windows, we saw the same thing with ReCore. I think gamers are seeing this as something, like with every other media that they have whether it’s their Netflix subscription or their music, they’re able to get to their content on any device, and I think the idea of Play Anywhere will fit naturally with that. I wish I could tell you it doubled the sales of something! But I can say Forza Horizon is doing really well, but it’s also a really well-made game that rated 91, so it’s got a lot of things going for it right now.”
JI: I think that brings us to the end of our interview slot, thanks very much for your time!
PS: “Thank you!”