The End of Xbox
It is the end of Xbox after a painful decade. With Phil Spencer and Sarah Bond leaving or being fired, it confirms the obvious: Xbox is now mostly a tool for Microsoft's other ambitions. Microsoft's old vision of a Trojan horse in the living room is no longer interesting. Instead, Xbox's only useful function is to advance an AI agenda. Short of that, it will be folded and shut down.
Phil was one of us, and in an industry dogmatic about in-group versus out-group signaling, having someone who was "one of us" felt right. He publicly revealed his Gamertag (P3) and had a gamer shelf of titles and paraphernalia behind him in video calls. But the unfortunate reality is that executives are measured as stewards of capital, and Phil's track record was awful.
The defense against Nadella's AI ambitions would be for the segment to generate compelling profits. Instead of rivaling PlayStation, Xbox was crushed in Europe and never materialized in Asia. Spencer's 12-year reign largely began with Xbox One, which also coincided with the fumbling of some of its biggest IPs.
Gears of War, Halo, and Fable are Xbox's response to God of War, Spider-Man, and The Last of Us, and all three franchises are in the worst place they have ever been, relegated to supporting cast. Game Pass is a strategic miss on many fronts, a model that is fundamentally incompatible with games. While much of this comes from Redmond mandates, Phil's title is Xbox CEO, and at some point the buck has to stop with him.
We should not underestimate Spencer's role in saving us from the fate of industry fool, former Xbox Head Don Mattrick, who seriously attempted to bundle Kinect and force always-online requirements. The fallout of that conference is felt to this day. Backtracking those decisions delayed Xbox in Europe, allowing PlayStation to gain an early foothold. That alone deserves his face etched into gaming Mount Rushmore.
My hope for Phil & Sarah is to do something new and exciting, bringing gaming what it desperately needs: new platforms that bring in new opportunities to grow the market.
Asha Sharma, the new Xbox head, a former Instacart executive and Microsoft AI leader, is not a serious choice if you believe in games as an end, not a means. In a rare communication miss, Lulu Cheng Meservey, former Activision Blizzard chief communications officer, celebrated Asha's initial PR release, which appealed to the gamer base: "No soulless AI," "Games are art," and so on. But in Lulu's own playbook, these statements are corporate slop. The authentic message would be to show her Gamertag.
Short of that, the better move is to lay cards on the table, declare that she is not a gamer, but that she is excited about this world and diving in with a photo of herself playing the latest Halo game. Unfortunately, we know that will not be the case. While it is certainly not a mandate for executives to be gamers themselves, it is a powerful way to win hearts and minds with gamers and the game industry.