Phil Spencer: Microsoft Nearly Gave Up on Xbox After Xbox One Launch - News
by William D'Angelo , posted on 03 June 2021 / 3,994 Views
Xbox president Don Mattrick left Xbox in July 2013 just after the debacle that was the Xbox One unveiling, which left the Xbox team splintered across Microsoft.
Phil Spencer since taking over as the head of Xbox has been able to turn the team around and grow Xbox Game Studios to 23 studios in the last few years. Now seven years later Microsoft has launched two new consoles on the same day, the Xbox Series X and Xbox Series S.
Head of Xbox Phil Spencer in an interview with ShackNews revealed that Microsoft nearly gave up on the Xbox brand after the failure of the Xbox One after the console launched.
"What happened when Don left was, the Xbox team was kind of… Well, more than kind of: It was distributed amongst the company in what I would say is a way that wasn't really feasible for Xbox," said Spencer. "This was before the launch of Xbox One. Don left in June, I think, right after E3 of that year. We were launching in November. So we still had months to go to actually launch the console without a leader, Marc Whitten, who was kind of my co-manager—he ran the platform team; I ran first-party studios—Marc ended up going into the Windows division. I stayed running first-party games in another part of the company.
"So we were actually separated, and even like our marketing team was moved out. This took what was the cohesive team under Don and split it up into three, still with the goal of us shipping this console with games, and it was difficult. I don't think it was the best move for stability of our launch, but kudos to Marc and everybody: We got it done and we launched the Xbox One mostly on time. I'd say there were some of the parts of the platform that weren't completely done when we launched, but kudos to the team [for doing what they could].
"So that was in November. Marc left to go to Sonos. We also didn't have a CEO at Microsoft at this time because Steve Ballmer had left. So Satya becomes the CEO in February. Then the question is, do we go forward with Xbox? Because we're getting really outsold by PlayStation in the market at this point. Do we stay invested in it? Or do we make a different decision?
"He and I had a discussion, and I made a pitch. I said, 'You know, gaming can be a real important consumer category for the company.' He didn't quite understand it yet, not from an intelligence standpoint, but he just hadn't been close to it. But he was willing to make a bet on us as a team. And I said, 'The thing I need, if I'm going to step into the role to head this group, is I need to bring it back together. I can't have my hardware team over there and the platform team over there, and first-party over there. I need to bring it back as a cohesive team.' And he agreed to that. So I ended up working in the Windows division, but we brought all those pieces back together.
"I think the reason I ended up in the job, frankly, was the other leaders were gone. I tease myself that I was the last person left at the table. and there's some truth in that. I want to make sure I keep my ego in check. It wasn't a clear, 'You take the person who ran first-party and make them head of the platform.' But frankly of the leaders that were there, I was the one that was left."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.
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Me too Phil, me too.
But al the end of this generation we got good BC, gamepass and a lot of studios . Really good work
I think they are on the right track but I wouldn't call this really good work. They issue this whole gen has been games and they still haven't resolved it. Not only have they not resolved it the xbox series x launch is the worst launch in xbox history. Absolutely no launch titles after canceling Halo infinite. The company that forced me to sell my ps3 and get a 360 has not shown it's face in a long time. I would love for MS to give me a reason to buy their console. Game pass is cool but I already canceled it. I don't want good deals on games. I want brand new games that get me excited to play my console or at this point my PC.
MS has always had this issue of providing people with everything they don't ask for. No one asked for a netflix gaming service from them. People wanted more games. No one asked for their xbox to be a cable tv, we wanted more games. They bought some studios so looks like they might be getting the message but until I see them deliver on more games I'm still skeptical.
1) Their output of games and quality control has improved since the Xbox One launched. Now with more studios there is far greater potential.
2) The Xbox One launch was essentially middling exclusives and some cross gen games. Honestly, I don't think the Series S/X launch is much worse because I'm not looking for underwhelming exclusives that are pretty. MS focused on how their new consoles play your existing games better via brute force or patches, there are also plenty of new cross gen games as well (Call of Duty:Cold War, AC:Valhalla, Watch Dogs Legion, Yakuza 7, etc.). Surprisingly, that strategy has been fine because people are buying the hardware.
3) You say nobody asked for a Netflix gaming service... yet its apparently doing really well. If you want games, its large number of games to dabble in at a low price. You could literally buy a Xbox without any games and instead rely on Gamepass for instant access to a strong library of games.
Anybody can buy up a bunch of studios. Getting your new studios to make good games is another story. Franchises like Hellblade, Ori, Outer Worlds, and Doom will continue to be good. Other franchises have become terrible, or gone long dormant. Elder Scrolls hasn't had a new game in 9 years, and Fallout is at an all time low with FO76. Getting mid tier devs like compulsion games to put out a great game on the other hand isn't something MS has managed to do yet.
I recall years ago that Satya wasn't crazy about Xbox, so this isn't entirely new information. I think he was more concerned about mobile devices, but I might be wrong.
Either way, they've completely turned around the Xbox division. Much more studios, Gamepass appears to be a success, and I believe supporting more platforms was a great idea. More importantly, perception is more optimistic about the future of their 9th gen hardware.
I suppose this explains why going forward, they pushed for software and Windows first. Hardware second.
Well always nice to get a dose of honesty/reality, and his self-deprecation on his own elevation to Xbox head was nice touch. To be real though, I think he and MS have done good job playing from poor hand that they had with the One, the "half gen upgrade" of One X not really seeming to get any more traction even if technically the strongest of total combined gen. Of course flip side to that is they have very strong hand in funding, with no direct pressure for immediate returns as MS is floating in cash and the amounts for gaming aren't really noticeable to them... That said, I think this is the gen where that strategy will be played out, it won't be perpetual money sink even for MS. Of course if they decide not to dump more money into it, how they resolve the brand is question... Let it stumble on at self-sustaining level, or external deal to achieve more weight / less internal funding demand... Even if most of what they do isn't my cup of tea, I still see them doing solid stuff that should bring success, with their gaming division based more on 1st party and of course orientated as much to PC as to console, which I think is best approach... And one I expect to be increasingly mirrored by Sony (now with seat at Epic). The Zenimax deal honestly I think is overhyped and overpaying for old IP, but wtih that said it definitely still is solid boost to their ecosystem.
I know they are in a different place right now than they were 6 years ago, but this is always something scary to read.
That they lied to you, or that you loved their lies so much?
Glad they stuck with it considering Sony's abuses later on in the gen.
Yeah, thanks to Phil, we went from a beginning of a generation with a console with almost no exclusive titles and which sold poorly with the division making no profit at all to a the end of the generation with 3 consoles which sold poorly, with the division still making no profit and almost no exclusive titles. But they have now more studios.
They made profits, don't you worry about that. They don't include there subscription income in their profit margins. Why else would MS continue to invest into the Xbox brand especially giving them $7.5b to buy Bethesda.
They don't make profit from the Xbox division, they actually never did since the original Xbox
Yeah that is what I want to hear the company that bought Bethesda could just give up on a whim.
At best it was entertained. This was probably around 2013-14 as well, Xbox has changed significantly since then.
So now will everyone ask for pardon when they said MS was going to leave console business? Took long enough for him to say it while they pretended everything was great all the time.
Entertaining leaving the business and doing it are two different things. In practice, they never really did anything to suggest they were leaving the business and made decisions to push hardware year after year.
More importantly, sales were never abysmal. The Xbox One maintained a viable audience. Had the Xbox One sold like Vita and Wii U, things would be different.
They stated many times through out the gen that the company was staying in the console market. The mother company might of hinted at exploring other options but thats not on Xbox, thats on MS.
"The mother company might of hinted at exploring other options but thats not on Xbox, thats on MS."
-The insanity defence, but for mega corporations. IT WAS MY SUBSIDIARIES SPLIT PERSONALITY, NOT ME!!!
"nearly gave up" is quite different of "may have thought about it".
And exactly they public saying they are going to stay and that they are doing great is from where the lie comes from, and right now he is confessing it.
Umm no because it did not happen. You seem to be confusing proven reality with possibility....
He never said the words "nearly gave up" anywhere. That's a VGChartz editorial addition
@Don, If Xbox was doing that badly, i can comfortably tell you that MS wont be reinvesting into the brand. That's not how Mega Corps play. You and the other people in other camps are the only ones confused. All you care about is units sold to determine if something makes money. Iv stated many times that's not how MS operates with Xbox, not any more. Weather they are winning or losing the strategy would be the exact same. They are converting to a full digital future, just like Steam. Its about the users not the sales to them.
Yeah, not much has changed since then, if we are being honest about it...
Nothing except the massive investment in new studios, Gamepass, more platforms supported and new consoles people actually seem to be excited about. Seems like it will be harder to find their new hardware than the Xbox One at launch.
