There’s nothing normal about interviewing Xbox chief Phil Spencer these days.
First, there’s the location.
We’re in a pandemic, of course, so our latest interview wasn’t at a gaming trade show, nor did we do a call from our work offices. On Wednesday afternoon, I logged into a Microsoft Teams video call from my home. Spencer called in from his, specifically from his wife’s home office, where the backdrop of desk, paned windows and a slowly blooming plant have been a visual staple during his media appearances since the spring. That office has even become internet-famous because of an easter egg. For a video talk back in June, Spencer tucked a white Xbox Series S prototype into a bookshelf behind him. It went unnoticed until the small console was officially revealed in September.
And my kids, remote-schooling that day, only barged in on the interview three times.
Location is one thing, but then there’s the extraordinary fact of what we were discussing: the launch of not one new Xbox console, but two. Come November 10, Microsoft will start selling the Xbox Series S and the more ballyhooed high-end Xbox Series X.
During our 48-minute chat, we covered those machines and a lot more—ballooning game file sizes, that Bethesda deal, and how Microsoft plans to enable next-gen gaming on a current-gen console. First, let’s talk about the S and the X and the fact that Spencer expects the far less hyped Series S to be the bigger long-term hit.
Xbox Series S vs. Xbox Series X
For many people aware of the coming generation of consoles, the Xbox Series X is Microsoft’s main offering. It’s the device Microsoft showed when it began revealing its next gen vision at The Game Awards last December. It’s a $500 box with loaded specs, the kind of device we’d expect Microsoft or Sony to promote as the start of a new era of gaming. It’s also the only next-gen Xbox anyone had officially known about through most of 2020 (unofficially is another story.)
The $300 Xbox Series S is the twist. It’s a smaller, cheaper unit, priced like a new Nintendo console, which tend to be innovative but under-powered. Microsoft boasts that the Series S will run cutting-edge games at high framerates, though not in 4K like the Series X. And unlike the Series X, it doesn’t have a disc drive, and comes with 512GB of storage compared to the X’s 1TB. It’s a big step up from the main Xbox One on the market now, but it’s certainly a stripped down Series X. It was only officially announced a month ago.
At launch, Spencer expects the X to be the hotter seller, driven by the kinds of early adopters who snatch new consoles. Though he also noted that demand for the new Xboxes and the other new November console, the PlayStation 5, will cause everything to fly off store shelves in the early going.
“I think we’ll sell every unit of both of them that we can deliver,” he said, referring to this first holiday season. Microsoft isn’t releasing estimates of how many units they’ll ship of either device this year, but he expects them to go fast. “I think demand is just going to outstrip supply of pre-orders. For us and PlayStation, I think that the manufacturing supply chain is going to dictate [market] share more than anything else.”
“I think, over the generation, our expectation would be that price really matters and that you would see the Series S sell more,” Spencer told me.
At home, Spencer has a Series X and a Series S, and not just the one that popped up in the background in June. That unit doesn’t play games, he noted.
He keeps a functioning S attached to a monitor in the office. His X is downstairs attached to a TV, and he keeps it on its side. “I’ve just always been a console sideways kind of person,” he said.
Spencer runs a team that makes and sells Xboxes, so of course he’s impressed with both. He called the Series X a “beast.”
He’s also the first person I’ve spoken to who has both units, so I asked him to compare them, acknowledging that he’s hugely biased about this stuff. “Being honest, the Series S has surprised me in terms of how it performs,” he said, raving about its framerates and loading times. While Spencer didn’t share stats, one helpful reference point is Xbox Series S/X launch game The Falconeer. That game’s indie developer says it will run at 60fps in 1800p (not a typo) resolution on the Series S and at 60fps in 4K on the Series X.
And here’s a surprise: Spencer says some games load faster on his S than his X because they’re loading lower-res graphics.
There is nevertheless a real power difference between these two new Xboxes. That has worried some developers, who have cited the Series S’s deficiency in RAM—10GB to the X’s 16GB—as a hindrance to getting next-gen Xbox games to perform as well as the X’s specs should allow them to. I’ve heard from experienced developers who are split on this issue.
“I’m not worried,” Spencer said. “I think we have proof points, like we’ve said, on PC, that show that you can get absolutely amazing-looking games on great hardware and have those games scale to the hardware capability.”
He acknowledged the additional labor that is being put on developers to design for the S and X specs. “But absolutely, it is work. There’s no doubt about that. The fact that you have two performance specs now, I’m not going to stand here or try to PR somebody and say two different specs is the same as having one spec. It’s not. We’re doing this because we want to expand the market.”
Expanding the market is a reference to simply selling more next-gen consoles faster, because the machine doesn’t cost a full $500. Even Sony is dabbling with that, offering its new PS5 at $500 but also launching a $400 version that has the same specs but won’t have a disc drive. Microsoft’s approach is more radical. The company is gambling that the power cut isn’t as significant as the much lower price. In fact, Spencer said that the Series S could be an effective lure for lapsed Xbox 360 fans who may have skipped the Xbox One or even switched to PlayStation. Even if they go buy a PS5, he thinks the Series S might offer some appeal. “Maybe buying two $500 consoles is going to be a difficult thing, so we said, ‘Hey, let’s make sure we’ve got something to catch a second-[console] owner.’”
That big Bethesda deal
It’s odd to talk to a console maker about launching two consoles at once, but it’s even stranger to be talking to them about a game company they just bought for $7.5 billion. Such are the peculiar times we’re in.
In September, Microsoft said it was buying ZeniMax, the parent company of Bethesda, Id Software and other top-flight studios, that make the likes of Fallout, The Elder Scrolls and Doom.
The planned purchase immediately bolstered Microsoft’s roster of internal studios. The deal will cap off the company’s generation-long shopping spree, an attempt to counter the reps of rivals Sony and Nintendo which have long been regarded as having stronger internal game-making operations. The expanded roster of games also gives Microsoft a lot more content to bundle into their popular Netflix-style Game Pass subscription service and offer via xCloud, the company’s game-streaming service which lets players access games remotely and play them on phones, tablets and other devices.
Spencer had said in previous interviews that existing deals involving ZeniMax games would still be honored, suggesting that something like the time-traveling game Deathloop would still come first to PS5, as previously announced. Beyond that, though, fans have wondered whether ZeniMax games would go Xbox and PC-only. In other words, they’ve wondered if PlayStation would stop getting Fallouts and miss out on the sequel to Skyrim.
I wondered that, too.
“Is it possible to recoup a $7.5 billion investment if you don’t sell Elder Scrolls VI on the PlayStation?” I asked.
“Yes,” Spencer quickly replied.
Then he paused.
“I don’t want to be flip about that,” he added. “This deal was not done to take games away from another player base like that. Nowhere in the documentation that we put together was: ‘How do we keep other players from playing these games?’ We want more people to be able to play games, not fewer people to be able to go play games. But I’ll also say in the model—I’m just answering directly the question that you had—when I think about where people are going to be playing and the number of devices that we had, and we have xCloud and PC and Game Pass and our console base, I don’t have to go ship those games on any other platform other than the platforms that we support in order to kind of make the deal work for us. Whatever that means.”
We do know that Microsoft has made a big studio purchase and kept its new franchise multiplatform before. That’s what they did with Mojang and its game Minecraft. So it wouldn’t be wild to see a Fallout 5 on PlayStation 5. For now, Spencer has said that platforms for future ZeniMax games will be determined on a case-by-case basis. And even if they make the games multiplatform, Spencer’s team can still boast an advantage: ZeniMax’s games could be sold at full price on PlayStation but offered at a large discount on the Xbox platform as part of the $10/month Game Pass subscription, a killer deal that already grants players launch day access to every new Microsoft-published game.
New Bethesda games are far out into the future, as is just about any other new game from Microsoft’s portfolio. The Series S and X will launch with numerous third-party games and some interesting indies, but Microsoft’s own studios won’t deliver much for launch. There will be an enhanced version of Gears 5 and a port of the recent PC game Gears Tactics, but nothing original from those 23 studios.
Halo Infinite was going to be the Series S/X’s big launch game. It’s all over the console’s marketing and its retail box. But the game was delayed in August, a month after Microsoft showed it running for the first time. Spencer told me he played Infinite a week ago but had “no update right now” about when it’ll be out. There are also no release dates or timeframes for other promised Xbox Series S/X games, including Rare’s Everwild, Playground Games’ new Fable, nor the console port of this summer’s highly-regarded Microsoft Flight Simulator. That’ll leave Xbox owners waiting and wondering what’s next and when.
I asked if Microsoft would consider offering Halo Infinite’s campaign at a different time than the multiplayer, if one is complete before the other.
“Bonnie [Ross, head of the Halo franchise] and the team will go drive those decisions,” Spencer said. “But I think we want to make sure people feel like they have a Halo experience. I think we can look at options like that.” He said any decisions like that would have to factor in the structure of the game and the story its telling. “So, yeah, I think that’s something to think about, but we want to make sure we do it right.”
I took that as a maybe.
Confusion about cross-gen exclusives
Another unusual aspect of the coming console generation shift is Microsoft and Sony’s commitment to creating a lot more cross-gen games, though it remains unclear how long that will be the case.
There was a time when a new console largely meant a clean break in terms of first-party game development. Maybe you’d get a Zelda game that launched simultaneously on an outgoing Nintendo system and a new one. Maybe you’d get God of War II coming out on PS2 several months after the launch of the PS3. But, generally, Microsoft, Sony and Nintendo move on to making top games for their new platforms—the ones they badly want to sell—quickly. Not so this time.
Microsoft signaled its desire to make its next wave of games for both Series S/X and Xbox One back in January when its head of game studios, Matt Booty, told MCVUK that games that come out over the next year or two would run on older Xbox devices as well.
Sony seemed to be promoting more of a traditional break toward producing games for its newer console, but recently revealed that its Miles Morales: Spider-Man game and its 2021 Horizon Forbidden West will be made for both PS4 and PS5.
In fact, Microsoft is now the company with more announced next-gen games that aren’t also promised for the current systems. It currently lists Everwild, State of Decay 3, Fable, Forza Motorsport, and Obsidian’s Avowed only for PC and Xbox Series X.
“I think we’re going to take it on a case by case basis,” Spencer said. “When we talk about a couple of years, it’s just when we look at the roadmap of games and the things that we’re building, that’s what we see. And so we’re just trying to be transparent with people about the roadmap of games that would be coming for last gen.”
On the one hand, they are being transparent about the fact they may still do cross-gen, which has been the promise for Halo Infinite. On the other hand, it’s awfully hard to tell what Microsoft’s 2021 Xbox line-up will be and when and on which machines its many announced games will land.
Ballooning file sizes and the storage size trade-off
Whenever these games come out, they’ll likely be large, maybe uncomfortably so for the amount of storage offered on any of the next-gen consoles. Current gen games are already huge. The Xbox One’s Gears 5 is over 60GB. The Master Chief Collection is over 100GB. Games like that gobble up space on 1TB systems. The next Xbox systems aren’t offering more storage, even though they’re offering more graphically dazzling games. Which doesn’t leave a lot of room to spare. Based on an IGN preview of the system, the Series X’s 1TB of storage seems to measure out to 802GB of usable space. The Series S will presumably also offer a good deal less usable space than its 512GB total. We still don’t know how huge the Series X’s 4K games will be, though Spencer shared one silver lining for Series S purchasers. He said that console’s games can be smaller than those on Series X—if developers package them that way—thanks to smaller, lower-res graphics files.
For all the excitement about the Series S/X letting players suspend multiple games or download heaps of them through a Game Pass subscription, those opportunities are undermined if a small number of games take up most of the system’s storage. “It’s an issue even right now in the current generation that we think about file sizes of these games,” Spencer said.
I mentioned to Spencer that Microsoft-owned Rare recently lowered the install size of its pirate game Sea Of Thieves, dropping the Xbox exclusive’s size by some 20GB. “The work you talked about that Rare did is one of those things that we will continue to push for our own teams and with partners to make sure we’re respecting the users SSD space or disc space,” Spencer said.
He said that Series S/X users can run Xbox One games off of an attached harddrive, though they won’t benefit from the newer system’s SSD speed improvements. That’s one space-saving technique, though he conceded that the relatively limited storage on the new Xboxes and PlayStations was a likely trade-off in terms of offering speedier SSDs. Bigger drives would have made for more expensive machines. The cost of storage, he noted, will eventually come down.
Microsoft’s Nintendo connection
While it doesn’t really factor into the Series S and X plans, a strange subplot for Microsoft has been its dalliance with Nintendo. Last year, two Microsoft-published games, Cuphead and Ori and the Blind Forest, were ported from Xbox One and PC to the Nintendo Switch. Since 2019, Microsoft has allowed two sets of company characters—first Banjo-Kazooie and just this week Minecraft’s Steve and Alex—to join the fight in Super Smash Bros. Spencer also praises Nintendo all the time.
“We have a very good relationship with Nintendo,” he told me. “And I think we see our work very synergistically, in terms of trying to grow the market. And it just makes it easy. Every conversation we have with them has really been easy.” He cited good conversations with Nintendo CEO Shuntaro Furukawa and Nintendo of America president Doug Bowser, who he said he spoke to last week.
The obvious positivity of the relationship has heightened expectations that more Xbox games could come to Switch, but in August 0f 2019, following news of Ori and the Blind Forest coming to Nintendo’s machine, Microsoft issued a statement that there were “no plans” to put more of its games on other consoles. (Minecraft Dungeons, already announced for PlayStation and Switch, was presumed the exception).
A year later, though, another Microsoft-published game, Ori and the Will of the Wisps, was also released on Switch. Spencer categorized the Ori offerings as supporting the development studio’s wishes. That team, Moon Studios, isn’t owned by Microsoft and has subsequently entered a publishing deal with Take Two.
Where does that leave the prospect of more Xbox games coming to non-Xbox consoles? Spencer told me that “it doesn’t feel sustainable” to consider Xbox games on a case by case basis for Switch and said, “In order to really support it, I would want a full Xbox ecosystem somewhere. And that probably means things like Live and Game Pass and stuff.” He said something similar in July during an interview with GameStar, though the answer has changed slightly. Back then he said that “the other competitive platforms aren’t really that interested in having a full Xbox experience on their hardware.” I cited that answer to him and asked if it was still the case with Sony and Nintendo. “I don’t want to speak for them,” he said. “I think they should probably answer.”
Getting the Xbox Series X on the Xbox One (seriously)
Maybe we won’t be playing more Xbox games on Switch or PlayStation any time soon, but Microsoft is trying to put its games on a lot more devices, largely through the xCloud streaming program that Microsoft now calls Cloud Gaming With Xbox Game Pass (okay, okay, folks, sorry I complained the “xCloud” was a bad name). It is already available on Android devices, and Microsoft has pledged to bring it to PC and iOS. Apple has been a barrier to that last one, stipulating that game-streaming services need to offer a separate app for every game in the streaming library. The Verge recently reported that Microsoft is trying a workaround that uses a web browser.
It was refreshing to hear that Spencer also sounds committed to bringing xCloud to Xbox One, letting current gen Xbox owners play next gen games without buying a new box.
“When we think about Xbox One, absolutely, we think it could be a good way for us to bridge generations and be able to let people play those games,” Spencer said. He put it behind PC and iOS in terms of priorities. “I don’t think it’s years off,” he said. “It’s just work to get done. We know how to do it.”
‘Why is Microsoft here?’
Seven years ago, Microsoft had a different and perhaps equally unusual strategy for a next-gen console. That vision—to offer the Xbox One console as an entertainment device that integrated its functionality with live TV and that you plugged your cable box into before sending a signal to your TV—was widely ridiculed. Rival Sony presented its PlayStation 4 as a gaming machine, first and foremost, and thrived.
Microsoft has been doing repair work since then, de-emphasizing the TV functionality, buying game studios and offering the Game Pass subscription as the closest thing to a Netflix of gaming. “We really think about the number of players that are playing on Xbox—and that can mean a variety of different devices and the number of games they play and how often they play,” he said. “That’s really the thing that drives us. And we’re seeing from that level, we’re bigger than we’ve ever been.”
He reflected on what has changed in the last seven years.
“I think the root of that is getting gamers to trust in the motivations of why we’re in this business. And that’s the thing I thought we lost around the launch of Xbox One, [it] was people really questioning the why behind: ‘Why is Microsoft here?’”
That’s led to what Spencer says is a player-centric model, focusing on games and getting them played by as may people in as many places as they can. “Our goal now is putting the player at the center, building our services and our games around the player experience and making sure that they know we’re in the games business. We’re not in a different business. We don’t aspire to be in a different business. And this is something we’re incredibly committed to.”
And there’s more:
- On whether Microsoft will eventually offer faster solid-state drives in new Xbox consoles to compete with the blazing SSD speeds in the PS5, which are expected to radically reduce video game load times: “I think, like you’ve seen in past generations, that we will iterate on hardware. We’ve already started, right? Our team doesn’t go away, when we kind of lock the spec. Some of it is cost. That’s always the important thing. How do you drive down the cost of the console in the parts that are there, but also just looking at areas in terms of what are the next iterations that you might do?”
- On whether the Xbox One’s Master Chief Collection will be supported by Xbox Series S/X backwards compatibility, after a report that the games didn’t work on one reporter’s Xbox Series X preview unit: Spencer said that some games may not have cleared testing in time for some of the hands-on previews but also noted that anything that people can see that he plays has to have been running on a Series S or X, since that’s all he now uses. “I don’t have any questions about those games.” (According to his Xbox profile, Spencer last played the Master Chief Collection on October 6.)
- On whether the Series S and X will remember on a system level whether the player inverts Y: The Xbox 360 did this, but the Xbox One did not. Spencer said he’d look into it for me. A day later, an Xbox spokesperson shared this update: “This is not functionality available at launch and while we don’t have current plans for this, we’re always listening to fan and developer feedback to inform future updates.”
- On whether Rare might do more with some of its classic characters such as Banjo-Kazooie and Conker: “I leave it up to the studios in terms of the things that they want to go work on,” he said. “I have a lot of respect for Rare and the work that they do. They do like building new things, and they’ve seen success with Sea of Thieves. I think they’re really excited about Everwild. But also the response to Battletoads was nice. And I think [partner studio] Dlala did a good job with the game. And so I think it’s just always a balance. My inbox is full of: ‘Let every studio do new [intellectual property].’ And also: ‘Why have you brought back Crimson Skies and Blinx?’