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In a statement that reflects a radical shift in Microsoft’s philosophy towards the gaming industry, Matt Booty, head of Xbox Games Content and Studios, confirmed that rival consoles are no longer the biggest threat to Xbox’s business, noting that the company sees the real competition in diverse entertainment content such as TikTok and movies.
Speaking in an interview with The New York Times to coincide with the historic announcement that the Halo series is coming to PlayStation consoles for the first time, Botti said:
“We all strive to reach people wherever they are. Our biggest competitor is not another console, we’re increasingly competing with everything from TikTok to movies.
This statement clearly reflects the strategic shift Microsoft has adopted in recent years from focusing on exclusive hardware to building a multi-platform gaming ecosystem centered around its services, most notably Xbox Game Pass.
This trend began in early 2024 when Phil Spencer announced that only 4 first-party games would be released on other platforms, but since then the list has expanded to include major titles such as:
- Halo: Campaign Evolved
- Indiana Jones and the Great Circle
- Forza Horizon 5
- Gears of War: Reloaded
Xbox president Sarah Bond also called exclusives an outdated idea, noting that the future is about reaching gamers across any device.
These statements come in light of a major internal restructuring at Microsoft. In July, the company witnessed the layoff of about 9,000 employees across various departments in conjunction with the cancellation of major projects such as Perfect Dark and Everwild, and Botti indicated that these decisions are difficult but necessary to adjust the course of the business.
According to a previous report, Microsoft required the Xbox division to achieve profit margins in excess of 30%, which is above the industry average.
In a controversial move in recent months, Microsoft raised the price of Game Pass Ultimate by 50% and increased the price of Xbox consoles twice in one year. Despite these changes, data showed that 6 out of the 10 best-selling games on PS5 between April and July were produced by Microsoft, indicating the success of the new strategy.
Microsoft is no longer fighting a hardware war against Sony or Nintendo, but a war for time and attention, competing with social platforms, streaming entertainment, and cloud gaming services. In a world where gaming intersects with all forms of entertainment, Xbox seems to be shifting from a hardware brand to a holistic experience brand.
Do you think Xbox is on the right track by ditching exclusives, or will this weaken its identity against competitors?
