Phil Spencer Discusses Xbox Series X, First-Party Lineup, xCloud, Competition, & His Reaction to the PS5’s Reveal

Xbox division head Phil Spencer talked about the Xbox Series X, Game Pass, Project xCloud, Competition, and his reaction to the PS5 reveal.

Xbox Series X Logo, Microsoft

During a panel at Game Lab Live, Xbox division head Phil Spencer talked about the Xbox Series X, Game Pass, Project xCloud, Competition, and his reaction to the PS5 reveal.

Spencer started by mentioning that the policy of putting the player at the center led to some really good decisions for the next generation of consoles.

Spencer had a “long review” yesterday on the progress made on the Xbox Series X hardware and it’s “going really well.” He feels good about the supply chain, and the silicon work has really come together in a good way.

He’s also been impressed by the innovative ways the software teams have used tech to test their games using Project xCloud. They can deploy builds on the system and then the whole team can play the new build almost instantly.

That being said, there are things that need to be done with physical presence like mocap or symphonic recording, and that is having an impact on development due to the pandemic.

Spencer than explaining that first-party content is really important for Microsoft’s overall strategy. It was really encouraging to see the support to growing first-party studios by Microsoft’s board.

He feels “really good” about the lineup of creator-led studios that Microsoft has under Matt Booty’s leadership. He is seeing the output from those teams, including some things that have been announced and many that have not been announced yet.

“We know it’s important. We know that it’s something that our fans want, but I will also say we’re going to create our first-party around the things that we feel we need to do in order to stand-up for Xbox.

Some times we get suggestions “where is your X game or where is your Y game” and people look at the other hardware platforms. I don’t think our goal is to replicate what other people have done. It doesn’t help the industry to have people that are doing exactly the same thing with their platforms, services, or content.

I’m really proud of the diversity of content that our Xbox Game Studios are creating, genres, and art styles, and platforms, and gameplay, single-player, multiplayer, cooperative work is coming along.

I’m just really proud of the diversity that I’m seeing from the Xbox Game Studios organization and I think that’s going to continue and it’s going to be a mainstay for us, that it’s not going to be a certain kind of genre or a certain kind of story, that the teams are really led by their own vision of what they want to build.”

Speaking about tech, Spencer believes that “the deltas will be smaller from a visual impact or feature X was impossible and now it is” compared to the previous generation, but one of the advantages of next-gen will be on the immersive nature of the content getting created. Things that used to break immersion like loading and framerate jitter will be gone.

While we’re able to get almost lifelike graphics even with the current generation in certain instances, mixing that with high and solid framerates, very little input latency and the ability of storytellers to really push the emotion and story through the screen and the controller, that is what Spencer feels will be a dramatic step-up.

This will lead to a “really great future” with stories conveying more feeling and impact.

Asked if there are new first-party games that he looks forward to playing, he picked two (among those he can talk about): he’s can’t wait to play Gears Tactics on Xbox Series X, and the other one is Microsoft Flight Simulator. He believes it’s going to be “jaw-dropping” on Xbox Sers X.

Spencer started to think about Game Pass as almost a platform in its own rights, where games can be published, find an audience of “well over ten million subscribers at this point” who can try a new game with very little friction.

Game Pass “definitely enables creators to find an audience that they might not find through a pure retail model” according to Spencer. Yet, Microsoft isn’t trying to move the business model from retail to subscription.

“It doesn’t preclude the retail model. […] We’re not trying to move the business model from X to Y. We’re trying to create choice for creators and customers.”

He also added that it’s becoming easier for Microsoft to secure content for Game Pass because studios and publishers see that when a game enters Game Pass it finds players it wouldn’t have found before, and the long-term value of the content builds up as more players fall in love with stories and characters.

Speaking of Project xCloud, Spencer explaining that “hundreds of thousands” of people took part in the preview, while creators are also learning about what kind of games people want to play and how they play.

Microsoft wants to bring xCloud into Game Pass as it’s a “natural play” to extend where you can play your Game Pass library being able to stream to a variety of devices. More will be announced about this “pretty soon” giving more clarity on the business model — which Spencer believes people will really like — the library of games, and where we’ll be able to play them.

Microsoft feels good about it, has “learned a ton,” and is still busy installing hundreds of thousands of server blades in Azure datacenter around the planet to enable a “pretty broad launch.” Spencer believes it’ll have an impact in a lot of places some expected, and likely some unexpected.

Spencer reiterated that Microsoft is not working on xCloud as a replacement for physical platforms.

“I don’t think that the highest fidelity places to go play a game is going be streamed from an Azure datacenter — or anybody’s datacenter — any time soon.

That doesn’t mean that it’s not a viable place to go play and is not an option that you should take. We’re building this hardware to enable you to go play the games that you want to play, but it’s not a replacement to where you play them today. I think that’s just a fundamental difference [with other streaming companies].


We want to make sure you have the best experience on the device that you’re playing on, which is kind of our smart delivery technology, that the device that you’re on should have the bits that show best on that devices, and different devices have different capabilities. There’s no doubt about that.

The nice thing about me playing on my Android phone when I’m sitting in a waiting room somewhere is that I can do it and that I can’t have my console there. It has unique advantages, but I wouldn’t say the unique advantage is fidelity or even responsiveness. There is latency. The speed of light still exists, and electrons actually have to go over the internet.

There will be things about cloud streaming that don’t match exactly what you’re doing on PC and consoles, but there are advantages that it has, and I just want to feel that you’re connected to Xbox wherever you decide to play.

Spencer also clarified his early statement in which he mentioned seeing Amazon and Google as main competitors.

He explained that he has a ton of respect for the gaming companies that created the games that he loved.

“When I think about the companies that have been part of creating what the industry is today, I always struggle to say that our strategy at Microsoft is to eliminate these companies or somehow create a world where they can’t thrive.

I’ve said it before that having a strong Sony and Nintendo… PlayStation and Nintendo they matter in the gaming industry and we’re not building a strategy that is trying to preclude these companies from having success.

I know it’s hard for something to hear and they think I’m lying somehoe, but we ship games there, as those companies are looking for potential cloud partners we’re more than happy to try to help, because I think it’s important for us as an industry that we respect our history and how we got here together, competing in many areas, yes, and we do compete with Sony and Nintendo in many areas, but also recognizing that this industry is growing incredibly quckly right now and it has more global influence that it’s ever had and there’s real opportunity for us to take a player-centered approach and not a device-centered approach as an industry. Those things can help the industry grow and have impact.

When I think about our rather large tech competitors as Microsoft […], those for me are not companies that are native to the gaming industry. I just want to make sure that as this industry evolves, the business models evolve, and we’re trying to innovate in new ways, and we’re creating new social structures in our industry… that the history of what we’re learned in getting here over the decades matters in terms of how we navigate forward.

I guess my comments are more about respect for how we got here as an industry and the progress that we’ve made, and looking at other players that don’t have a history in this business coming in, and just wanting to make sure as an industry we protect what we have and we grow it in a thought it in a thoughtful way.

Spencer then talked about Xbox All Access in the next generation. Spencer believes that it’s going to be “critical” for both the Xbox Series X’s launch and the overall generation.

Microsoft wants to bring its whole customer base along and they want to offer options and opportunities where they can.

During the current generation Xbox All Access was a way for Microsoft to learn and to see if customers are interested. The response has been great where it was available.

With the next generation, we’re going to see a “much broader market and retailer support” matching a model that customer use for many other devices.

Having more pricing options for consumers is also just a thoughtful thing for a console manufacturer to think about, whether it’s Game Pass or things like Xbox All Access that lets players get into a new generation without a big upfront cost. This is going to be important with the current economic situation.

Spencer was then asked to talk about his reaction to the recent PS5 reveal event, expressing confidence about his hand.

“I watched the show. I thought they did a good job. I sent Jim [Ryan] a note afterward and congratulated him. […]

As a competitor it’s great to have them out there now so that we kinda know what the program is. We’ve seen the device, we’ve seen the gamme.

Just being honest, I felt good after seeing their show. I think the hardware advantages that we’ve built are going to show up as we’re talking more about our games, framerates, and other things.

I thought the games lineup that we’re going to have at launch I felt really good about. We got more clarity on what they’re doing obviously at their show, which helps us focusing more on what we have, and I think that’ll be a strength for us at launch.

So, I thought they did a good job. I thought they do what they do very well, and they did that, but when I think the position that we’re in with the games that we’re going to be able to show and how they’re going to show up, and the haedware advantage that we have, I think we’re in a very good position.

So I feel good about July, the gameplay that we’re going to be showing there, and the hardware capability. But I will say it’s also nice as a gamer to see both of us out there and competing. The competition leads to better outcomes for both companies and I applaud that.

Spencer also added that Xbox’s teams are working hard to get the July event ready. They have taken feedback from their latest event and he believes that people are “really going to be pleased” with what Microsoft will show then. Of course, Halo will be a big part of it as it’s an important title for Microsoft.

Speaking of the design of the Xbox Series X, he mentioned that Microsoft wanted to be player-centric. It’s not about the device taking center stage, but it’s about the experience of the games. They want us to hear the games first, not the console. They want the power inside the console to be predictable, high-powered so that gamers get an amazing experience, and easy to develop for.

The design of the hardware is purpose-made to enable the teams to do the work they can do and let “the games be center stage for what gameplay is about.” This is a design ethos shared not only by the Xbox hardware team but also by how Microsoft designs services and launches things.

It’s all about continuous innovation and bringing the whole Xbox community along the journey. Whether that’s with games that players fell in love with on the original Xbox that are going to look amazing on Xbox Series X, staying connected with friends we’ve had for fifteen years on Xbox Live, or hardware features that can be delivered to the hardware that we have now that Microsoft wants to deliver if it can.

Xbox Series X is “purpose-built giving the teams time and letting the games be the center of the experience and not the physical design” that Microsoft is offering.

About the author

Giuseppe Nelva

Proud weeb hailing from sunny (not as much as people think) Italy and long-standing gamer since the age of Mattel Intellivision and Sinclair ZX Spectrum. Definitely a multi-platform gamer, he still holds the old dear PC nearest to his heart, while not disregarding any console on the market. RPGs (of any nationality), MMORPGs, and visual novels are his daily bread, but he enjoys almost every other genre, prominently racing simulators, action and sandbox games. He is also one of the few surviving fans on Earth of the flight simulator genre.