The Decline of a Brand: Why the Xbox One is Struggling

I’ve always been a Nintendo guy, anyone that knows me will tell you that, but surprisingly my favourite game console isn’t a Nintendo one. My favourite console ever is the Xbox 360. That’s a fairly impressive feat since I started playing games on the NES and have experienced all the ups and downs of the industry since the mid 90s. For me, the Xbox brand has been a constant part of my gaming life since I bought an original Xbox in 2003. Back then the Xbox represented a part of gaming that I had never truly experienced, western games. The original Xbox I bought was bundled with two titles, Mechassault and Star Wars Knights of the Old Republic (KotOR). Mechassault has it’s fans but it’s a game I barely played or cared about. It was KotOR that captivated me and made me a true believer of the type of experience Xbox provided. 

Up until then the only RPGs I was exposed to were from Japan and the genre had calcified in its tropes and mechanics. KotOR was huge, engrossing and novel to me and the story and world it explores remains the highpoint for the Star Wars franchise in any medium. KotOR had hooked me and engrossing single player experiences kept coming to the Xbox. KotOR led to KotOR 2, which led to Fable and then Jade Empire. It wasn’t just RPGs, however. Ninja Gaiden, Panzer Dragoon Orta, and the remake of Conker’s Bad Fur Day were masterful single player experiences that could only be found on Microsoft’s first console. In 2005, Microsoft built on the philosophy that made the original Xbox a great with the Xbox 360. The Microsoft of the early Xbox 360 era was a creative, aggressive and ambitious juggernaut and they were rewarded for it by decimating Sony’s market share. They finally capitalized on their acquisition of Rare with the release of Perfect Dark Zero, Banjo-Kazooie Nuts & Bolts and Viva Pinata. Now, not all these games were hits but they were genuine efforts to build on the venerable studio’s legacy. In addition to that, Microsoft invested heavily in new IP from their own studios and from 2nd and 3rd party developers.

Games like Mass Effect, Lost Odyssey, Blue Dragon, Alan Wake and Crackdown were all published by Microsoft themselves. Microsoft understood the importance of building a library of strong first party content and much of that content was robust single player experiences. Building on that strong effort was the aggressive courting of 3rd party exclusives. At one time Xbox 360 was the only console where you could play The Elder Scrolls IV: Oblivion, Bioshock, Dead Rising and Ninja Gaiden II. They were all great, exclusive, single player games. Even the console’s many multiplayer hits like Halo, Gears of War and Call of Duty featured compelling single player experiences. But something is very wrong today. The philosophy and ethos that built the Xbox and the Xbox 360 is completely and utterly absent from the Xbox One to the point that I sometimes wonder whether it shares any true linage to its predecessors. This is why Xbox boss Phil Spencer’s recent statements that single player experiences like The Legend of Zelda: Breath of the Wild and Horizon Zero Dawn represent an archaic business model are so concerning and confirm my worst fears about the direction of the Xbox brand.

It all began in 2010 when former EA executive Don Mattrick was promoted to President of Microsoft’s Interactive Entertainment division, the position now occupied by Phil Spencer. Under Mattrick’s leadership the corporate culture at Xbox changed radically. Investments that the company had made throughout the original Xbox and 360 generations were radically cut back in favour of broader, less focused endeavours such as media streaming and casual gaming experiences through peripherals like Kinect. At first, these new initiatives were quite successful but their success was built on top of the already solid foundation of Microsoft’s earlier work, not in spite of them. It’s easy to look back on Microsoft’s line of thinking as a response to the success of Nintendo’s Wii. Sony itself had shot back with the Move Controller. However, with the abysmal failure of Kinect 2.0 and the Wii U, the industry has since learned that the large market catered to by the original Wii has lost interest in console gaming and has moved on to mobile devices. Under Mattrick, Microsoft decimated it’s first party game studios. They relinquished control over Halo developer Bungie and shuttering Age of Empires developer Ensemble Studios. It’s UK development houses, Rare and Lionhead were tasked with creating Kinect software the studio’s fans cared nothing about and the latter was later shut down during the Xbox One era. 

After he dismissed the success of Zelda and Horizon, Spencer went on to state that the future of games would be “service based,” citing the success of titles such as Overwatch and mobile games that drain customer wallets slowly over time and provide shallow or exclusively competitive multiplayer experiences. Unfortunately for Microsoft this is not remotely true and will result in them making yet another colossal error in judgement. Let us look for a moment at the resounding success of Sony and the PlayStation 4 and contrast it with Microsoft’s sluggish decline. The choices Microsoft made during the late Xbox 360 era and the choices Sony made with the late PS3 directly contradict one another. While Microsoft gutted its investment in first and second party development, Sony began to aggressively build a new generation of first party Sony franchises. Not only that, most of these franchises were unabashedly single player story experiences. Uncharted, The Last of Us, Heavy Rain, God of War III and Beyond: Two Souls defined Playstation’s comeback from the disastrous start of the PS3. Going into the PS4 era, it’s games like Horizon, Detroit, Bloodborne and Uncharted 4 that are dominating the conversation and selling Playstations. The reason for that is because people buy consoles for unique experiences that can’t be had anywhere else. Microsoft forgot this long ago, not only have they gutted large first party single player games from the Xbox library, they’ve decimated first party development all together and have insisted that all few Microsoft published titles that do exist also be on Windows. This has left consumers no reason to buy an Xbox One when a mid range PC could handle the scant number of Xbox One console exclusives and a PS4 can handle everything else. 

This idea that they’ll release service driven titles like Overwatch because they have a longer revenue stream misses the mark entirely. Mulitiplayer games that keep bringing people back via microtransactions and periodic paid content are great and have their place but so do big single player titles. Diversity of selection makes libraries strong and excluding those that value beefy single player experiences only alienates potential customers. Even more importantly, the market potential for such “service driven” games is limited. The very fact that such games keep people coming back for more means that when the next big one comes out, people are likely to not give it a try. To see this in action, just look at any MMO. When World of Warcraft (WoW) was first released in 2004 it exploded in popularity and millions of people were gladly paying a monthly subscription to spend hundreds and thousands of hours in Azeroth. Over the years, countless other developers ran after WoW’s success but failed. Most of the people willing to play an MMO and spend that kind of money and time had already done so in WoW and they were hesitant to give that up to start fresh elsewhere. It’s the same with first person shooters. After the success of Call of Duty 4, ever shooter was a modern day near future multiplayer blockbuster. They all failed to make an impact until Battlefield 1 took a risk and went back in time to the first world war. Story driven titles don’t have these issues because every story offers something new to the player and when they’re done they can move on to the next. More fundamentally, single player titles are compelling in ways a multiplayer “service-based” title can never be. 

E3 is coming up soon and Microsoft has a lot riding on it. Unfortunately, I don’t think I’m going to be impressed by their showing. Everything I’ve seen of them since 2010 seems to focus on the extremities of what it means to be a gaming company. Things like “services,” most of which nobody asked for and hardware like Kinect or the upcoming Project Scorpio. Services are great and hardware can be impressive but they are less than nothing if not supported by strong first party content, look to the PS Vita as an example. Microsoft’s recent cancellation of the anticipated Platinum Studios developed action game, Scalebound, shows they don’t understand what’s wrong or how to fix it.

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