Xbox Boss Wants Epic, Other Stores on Console, Dropping Exclusivity Partly for Gen Z Appeal

In recent months, there’s been a lot of debate and concern about the future of the Xbox brand, with Microsoft seemingly tip-toeing away from exclusives and the traditional console business. In a recent “business update,” Xbox boss Phil Spencer and other execs sought to calm fears, saying major exclusives like Starfield are staying put (for now) and Microsoft is working on powerful new hardware, but fans have been skeptical in the face of “flatlining” demand for Xbox consoles.

Well, Spencer sat down for an interview with Polygon at GDC, and it seems he has a new pitch – in Spencer’s estimation the console business has gone stagnant, and some of the things he’s proposing, like stepping back from exclusives, are needed to get back to a place of growth. The lack of growth becomes a particular problem when the cost of AAA game development seems to be growing exponentially, from around $100 per game last generation, to up to $300 million per game this gen.

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“I’ll say the thing that has me most concerned for the industry is the lack of growth. And when you have an industry that is projected to be smaller next year in terms of players and dollars, and you get a lot of publicly traded companies that are in the industry that have to show their investors growth — because why else does somebody own a share of someone’s stock if it’s not going to grow? — the side of the business that then gets scrutinized is the cost side. Because if you’re not going to grow the revenue side, then the cost side becomes challenged.”

Spencer always likes to talk in broad industry terms – Everything he does is for the good of everyone! – but Nintendo has had great success with the Switch this generation. The PS5 is on par with the very successful PS4. The only console badly stagnating is Spencer’s own Xbox Series X/S. Sony is struggling to keep costs down, but ultimately, nobody’s going to