Console wars in 2023

The Verge has written an interesting article discussing whether or not Xbox has lost the modern console wars. It's interesting for a number of reasons. Obviously, for folks reading this post or folks like me, writing such posts, it's interesting because there's a huge legal tussle around Microsoft's acquisition strategy. Which resembles Real Madrid's "galactico" strategy. There's also the nascent feeling that there isn't really a console war anymore. And there hasn't since the 90s, in reality. Everything feels fairly complimentary.

Sony has, by far, the best first-party studio output compared to Xbox. Nintendo lives in it's own, very high quality, bubble, even if hardware innovation is slow. And Xbox seems to be attempting to acquire it's way through the gap. Sony even puts it's first party AAA titles (which tend to skew towards single player story titles) on PC after the dust settles on the games' initial hype. Whereas we're unlikely to ever see a Halo title on a PlayStation.

“As the console wars is a social construct with the community, I would never want to count our community out, they’re big fans,” Spencer answered carefully. “If you look at our market share in the console space over the last 20 plus years, we’re in third place. We are behind Sony and Nintendo in console share globally.” -Phil Spencer

Spencer needed to bring Switch into the fray to demonstrate that the Xbox is, indeed, the weaker platform from a sales perspective. Even if literally no one compares Xbox to Switch. But it helps the argument that Sony and Nintendo are the incumbents, while plucky Microsoft is the challenger. And this acquisition isn't what it seems; it's them simply attempting to challenge. There were rumours that Bethesda's Starfield would be PS5 exclusive, which prompted a transaction to acquire the entire group of studios in that portfolio (including id, who produce Doom).

But all of this comes down to the point of an Xbox. What is it? I've not owned an Xbox since the 360. In part because the 360 was a botched piece of technology & Microsoft were absolutely atrocious at customer support with it. But also because the price of ownership is diminished severely with the utility, power and long-lasting effect of simply building a PC instead. You get to play the same games, and more!

I think the blocker for a PC has always been that PC gaming has been seen as "hardcore," while console gaming is more accessible. But the rules have changed a lot over the recent years, with pre-built PCs being reliably good standard, and Steam Deck really making things accessible.

Which is maybe the point Microsoft are making. The console isn't the point. Xbox, long-term, isn't a hardware platform. It's Steam, but with a console-beginning. They know that software (i.e. the games) are the point.

This is why GamePass is the big bet. I'm not entirely sure it's working. From a pure numbers standpoint, it's a subsidised feature in the Xbox roster, but it points to Xbox's number one growth metric. Microsoft aren't going to pay out indefinitely for a product to sell at a loss if the numbers don't adjust upwards. Which means GP will likely require price increases. Sony has been slower with it's PS+ offering, but slow & steady tends to win the race with these kinds of things.

Ultimately the issue the FTC has isn't about Sony, Nintendo, Steam or even Xbox. It's about the sheer size of Blizzard+Activision in the gaming market. And how big that is compared to the acquisitions of Zynga, Bethesda, etc. beforehand. This acquisition represents a devolution of competition, and a potential introduction of stagnation in gaming overall. Or worse, an easy intro to buy more and more things to create a monolithic monopoly.