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Microsoft's Future in Gaming Uncertain as Xbox Chief Discusses Potential Exit

Amidst rumours of a new Xbox console
by Joe Wilcock on September 21, 2023   



In a surprising revelation during the ongoing legal battle between Microsoft and the Federal Trade Commission (FTC), Phil Spencer, the head of Xbox, has hinted at the possibility of Microsoft exiting the gaming business if certain growth targets for Xbox Game Pass are not met.

The leak from the court case exposed an internal projection document outlining the trajectory of Xbox Game Pass subscribers. The document suggests that the service may not reach the coveted 100 million subscriber mark until sometime between fiscal year (FY) 2029 and FY30. When presented with these projections, Spencer commented that if the growth does not outpace these estimates, Microsoft may have to reevaluate its position in the gaming industry.

Spencer stated, "I do not believe that that is what the future Xbox business would look like... I can fairly safely say that if we do not make more progress than this off of console, we would exit the gaming business. If this were the outcome, we would — I don’t believe we’d still be in the business."

Xbox Game Pass currently boasts over 30 million members, though this figure remains unverified as no official confirmation has been provided.

Spencer's comments suggest that Microsoft is pinning its gaming future on the success of Xbox Game Pass and expanding its reach beyond traditional console gaming. He indicated that the majority of Microsoft's gaming customers are expected to come from platforms other than their own hardware, a shift that he hopes to see happen sooner, ideally by fiscal year 2026 or 2027.
 

"I do not believe that that is what the future Xbox business would look like. This is a presentation from our devices organization to the gaming leadership team, so this is the view from the team that is chartered with building our hardware on what the future business would look like.

I can fairly safely say that if we do not make more progress than this off of console, we would exit the gaming business. If this were the outcome, we would — I don’t believe we’d still be in the business.

A majority of our customers are found off of our own hardware, I would hope by earlier than 2030. So, when you asked me if I agreed with this chart that the light green and blue depending on what colors you see there would have to be much larger much earlier. I would say by FY26, ’27 that we should be in that position, or we’d have to make a different decision with the business."

- Phil Spencer


While these remarks from Spencer have raised questions about the company's long-term commitment to the gaming industry, it remains to be seen whether Microsoft will indeed exit the gaming business or if they can steer their gaming division towards more rapid growth in the years to come.

Stay informed on gaming news and reviews at DailyGamer. Follow @realdailygamer on X for the latest updates from the gaming world.

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