Microsoft exec admits the console wars are over: ‘We lost the worst generation to lose’

Christiaan Hetzner

Sat, May 6, 2023, 2:49 AM GMT+9·5 min read

Microsoft conceded defeat in the high-stakes video game console wars for the first time, admitting on Thursday it will never be able to catch up to Sony and Nintendo.

A chastened and downbeat Phil Spencer issued what appeared to be a brutally honest 40-minute mea culpa in which he even implied his job was on the line after a series of self-inflicted blunders.

In an interview with an Xbox community YouTube channel published on Thursday,he said it was an illusion to think that exclusives like the hotly anticipated Starfield would cause Sony players to switch allegiances. That’s because 90% of gamers are already committed to their existing console, according to Spencer.

“It’s just not true that if we go off and build great games, all of a sudden you’re going to see console share shift in some dramatic way. We lost the worst generation to lose in the Xbox One,” the Microsoft exec said.

Spencer also poured cold water on hopes that the now defunct console's replacement, the current Xbox Series X, would chip away at sales of the Sony PlayStation 5 and Nintendo Switch.

“I know that will upset a ton of people,” he said, “but it’s just the truth of the matter when you’re third place in the console marketplace and the top two players are as strong as they are.”

When it entered the market in 2001 with the original Xbox, a lot of gamers expected that the deep pockets of Microsoft would help it crush gaming rival Sony and its PlayStation 2. But while Microsoft came close to eclipsing Sony with its the second-gen Xbox 360, it never succeeded in dethroning the Japanese competitor globally.

Spencer is now pushing Microsoft to focus not on hardware but on software: for example, its monthly subscription service Game Pass. He's also bullish on new features that allow consumers to buy one game and play it seamlessly across a variety of devices from Xbox to PC to new handheld devices like the Steam Deck and the Asus ROG Ally—outside the Sony ecosystem. Nevertheless, he refuted repeated speculation that Microsoft might ditch its commitment to console gaming in favor of a sole focus on streaming.