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Phil Spencer: Xbox's Strategy Does Not Hinge on People Moving All-Digital

Phil Spencer: Xbox's Strategy Does Not Hinge on People Moving All-Digital - News

by William D'Angelo , posted on 01 March 2024 / 3,090 Views

Microsoft Gaming CEO Phil Spencer in an interview with Game File discussed the future of physical games on Xbox and says they have no plans to rid of physical releases.

"We are supportive of physical media, but we don't have a need to drive that disproportionate to customer demand," said Spencer.

"We ship games physically and digitally, and we're really just following what the customers are doing. And I think our job in running Xbox is to deliver on the things that a majority of the customers want. And right now, a majority of our customers are buying games digitally."

Spencer said that video game consoles are some of the last consumer electronic devices to include a disc drive and the number of manufacturers of them has decreased. However, Xbox does not plan on getting rid of physical games.

"Gaming consoles themselves have kind of become the last consumer electronic device that has a drive," he said. "And this is a real issue, just in terms of the number of manufacturers that are actually building drives and the cost associated with those. And when you think about cogs that we're going to go put in a console—and as you have fewer suppliers and fewer buyers—the cost of the drive does have an impact.

"But I will say our strategy does not hinge on people moving all-digital. And getting rid of physical, that's not a strategic thing for us."

Spencer was asked about Microsoft laying off people on teams involved in making disc version of games and he said that was more due to the "alignment of our teams across ZeniMax, Activision and Xbox. So we have teams that are in charge of physical retail, inclusive of selling games in physical outlets. So that's what the team action was. It wasn't about us getting rid of the capability."


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 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.


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28 Comments
xl-klaudkil (on 21 February 2024)

100% microsoft is the first to go all digital.

  • +8
SanAndreasX (on 20 February 2024)

Either a rodeo is going on or Phil Spencer is talking, because I smell another load of horseshit.

  • +8
JackHandy SanAndreasX (on 21 February 2024)

Well, he didn't actually say they weren't going to do it. What he said was that they were going to go where the Xbox consumers go. He then went on to say that the majority of them are buying digital games. So in a way, he IS saying they will go all-digital. He's just being careful with his words so people don't freak out. lol

  • 0
Random_Matt (on 21 February 2024)

A) Some European stores are no longer stocking Xbox media.
B) Your consoles are going to be all digital.

Microsoft are a bunch of liars.

  • +7
Pemalite Random_Matt (on 21 February 2024)

That is potentially up to the retailer.

I know here for example... EB Games (Australian equivalent of Gamestop AFAIK?) has a dwindling Xbox section with a growing Playstation/Switch section.
But you walk across the mall to BigW and the Xbox section is just as expansive as Playstation and Switch.

What is really cause for concern is games like hellblade 2 going digital only, I'm one of those wierdo's who wants a wall of physical video games.

I think Xbox will retain physical, but it's going to be disproportionately supported, which is absolutely sad to see.

But the real kicker with loosing physical is loosing the optical drives and loosing support for CD, DVD, Blu-Ray and UHD Blu-Ray playback, I'm not ready for that, I like my consoles to do everything.

  • +4
TeachMeHisty Pemalite (on 21 February 2024)

Same here.
If it aint physiscal, it aint worth the purchase.
Going through my library, I have not a single game which requires a download (as in: cannot be played/finished/is a broken mess without a patch)

  • +3
leftalone (on 20 February 2024)

if you are really supportive of physical media put the entire game on the disc. This also applies for sony

  • +3
Bandorr leftalone (on 20 February 2024)

That causes a delay in game releases if the updates and patches have to be put on the disc.
Plus what happens when they release new content 6 more or a year later?

  • 0
TeachMeHisty Bandorr (on 21 February 2024)

Release a complete version down the line, where's the problem? Publishers/Devs did it all the time during the PS360 era, and it was great!

But lets be honest, the bigger problems are games like starfield which ship incomplete on disc.
Or something like Hogwarts Legacy which only has the "tutorial" on disk and the rest must be downloaded.

Those "physical" games are cancer and only exist to deceive the consumer.

  • 0
hellobion2 leftalone (on 20 February 2024)

totally agree with you!

  • +1
Azzanation leftalone (on 21 February 2024)

This is referring to how you buy the game.

  • 0
Radek leftalone (on 21 February 2024)

Vast majority of Playstation games are in fact fully on disc. FF VII Rebirth even launches on 2 of them

  • 0
Wman1996 (on 20 February 2024)

They support physical media, but a ton (if not the vast majority) of Series X games require partial or entire downloads even when you buy a physical disc?
It doesn't make sense.

  • +2
DroidKnight Wman1996 (on 20 February 2024)

From a consumer point-of-view, I'm still able to lend out my games to friends and family and they don't have to purchase the game to play it. I can sell my physical games when I'm done with them if I don't want to add them to my collection. I rarely sell games, but I will sometimes get rid of older COD games or sport games where a new one comes out every year.

  • +3
Wman1996 DroidKnight (on 20 February 2024)

That is true. There are still some positives. Still, not only is the day of plug-in and play games gone, but installing without the internet is becoming more and more dead as well.
A multiplat like Jedi Survivor required a significant internet download for me to play physically on PS5, and I know Xbox is the same in that regard. EA should've made the game two discs or cared less about 4K textures which greatly increased the file size. The Series S total file size of the game, for instance, is smaller than PS5 or Series X.

  • +2
V-r0cK (on 21 February 2024)

Ever since this video came out and destroyed them, MS was determined to destroy physical discs lol

https://youtu.be/kWSIFh8ICaA?si=w74ngbR9Mq1WQ58T

  • +1
EricHiggin (on 21 February 2024)

Introducing, the XBSX all digital. Isn't it adorable?

Oh, and if you want XB games on disc, you can find them for the PS5.

  • +1
Cerebralbore101 (on 21 February 2024)

Bullshit.

Halo Infinite doesn't have the campaign on disc. Forza and Starfield both refuse to boot without a mandatory update. Games that say "Xbox Series X/S & Xbox One" on the front cover require a mandatory update to play the Series X/S version. Original Xbox game discs require a mandatory update to play on Series X. 360 game discs also require a mandatory update. Series X only reads dual layer Blu-Rays. PS5 reads triple layer Blu-Rays. This means that multiplat games on Series X are more likely to have a mandatory update to boot the game. Finally, they just fired the bulk of their physical department.

For all the reasons stated above Series X is a collector's nightmare.

  • +1
Pemalite Cerebralbore101 (on 21 February 2024)

The 100GB disc/Triple layer disc seems to be an optical drive quality issue.

I can run triple layer discs just fine on my Series X console, the only movies I buy are UHD these days and many of them are 3 layers for extensive films.

The real issue is the whole 24hz support in my book...

  • +3
Cerebralbore101 Pemalite (on 21 February 2024)

So they could release triple layer games but don't? What's stopping them? I knew Series X didn't play triple layer games. Wrongly assumed that expanded to movies as well.

  • 0
Pemalite Cerebralbore101 (on 21 February 2024)

It's likely a software limitation rather than a hardware one.

  • +2
Cerebralbore101 Pemalite (on 22 February 2024)

So fixable then?

  • 0
Pemalite Cerebralbore101 (on 22 February 2024)

Indeed, just like the 24hz issue with Blu-Ray playback.
Whether they will is another matter considering how long the 24hz issue has existed.

  • 0
Vengeance1138 (on 20 February 2024)

"We are supportive of physical media"
Proceeds to fire entire team dedicated to Physical Xbox releases

Oh yeah, we believe you Phil! wink, wink ;)

  • +1
smroadkill15 Vengeance1138 (on 20 February 2024)

They did not fire the entire team dedicated to physical releases. As the article mentions, they now have 1 team instead of 3.

  • +2
Imaginedvl Vengeance1138 (on 20 February 2024)

Where did you see that they fired the "entire" team dedicated to physical Xbox releases?

Also, supportive does not mean, wasting resources on it knowing that 90% + of people are buying digital, it means to still offer the option when it makes sense. I guess it sounds less dramatic that way, right?

  • +1
SuntannedDuck2 (on 21 February 2024)

They can say that and it is true consoles are the last form of a device prioritizing disk drives rather than card readers or just online storage instead.

Western third parties pushed PC drives away because of no Blu-ray push for disk drives in PCs as much (they do exist though) and more awkward disk access and not worth selling by design of EA/Ubisoft and others.

So the fact that and the Xbox One used games yeah I think we haven't forgotten 10+ years ago have we.

Microsoft and Sony know. Sony has Android MP3 players sure still going but for how long will they do that, it's already clear they don't have much for CD Players or Boomboxes. Sure Blu-ray player still exist by those in the Blu-ray alliance.

But otherwise Microsoft would easily drop physical, sales of physical dropping, limited or otherwise. Sony and the Blu-ray alliance have the control after all Microsoft doesn't have to pay blu-ray royalties or whatever the case if they don't want to and give up on digital. Everything they do anyways is mostly software and digital. Same with Google/Amazon (not counting their shipping goods side of things)

  • 0
TheLegendaryBigBoss (on 21 February 2024)

Looking forward to see a disc drive in Brooklin console!

  • 0