The head of Xbox also talked about why it makes sense for Microsoft and Sony to take the 30% fee, unlike with Apple and Google.
Phil Spencer was interviewed by The Verge in detail. „I think you’re going to see [an Xbox TV app] in the next 12 months. I don’t think anything is going to stop us from doing that. […] Now, as you said, a TV is more of a game console stuffed behind a screen that has an app platform and a Bluetooth stack and a streaming capability. Is it a TV anymore or is it just the form and function of the devices that we used to have around our TV, consolidated into the one big screen that I’m looking at?”, Spencer said, confirming an Xbox TV app by the end of 2021, and asking what a TV is nowadays.
He then explained why he thinks a console will use more of cloud capabilities: „When we think about xCloud, which is our version of Stadia or Luna, I think what it needs to evolve to are games that run between a hybrid environment of the cloud and the local compute capability, and that they can take full advantage of the cloud that’s there and that’s available, but also full advantage of my edge compute capability that I have in my home in the console. It’s a hybrid between both of those.
That’s, I think, the compute model that most people are going to move to with most app development, a hybrid model between the edge and the cloud where things that — either from a security, or latency, or even cost and bandwidth standpoint — can be done locally, should be done locally, and things that really could use the scale that you can get through the cloud, and be able to light up multiple blades to deliver whatever experience you want to deliver to somebody, would use the power of the cloud. Now, if your local device has almost no computed capability relative to games we’ll move almost everything to the cloud. If I have a device that’s very capable in my home, we should use some of that. We shouldn’t ignore it. I think it will change,” Spencer said.
The head of Xbox also explained why they, along with Sony, continue to take the 30% fee: „If I can put Game Pass on iOS … if you just look at the scale, there are a billion mobile phones on the planet. Those are general computing platforms. A game console does one thing really; it plays video games. It’s sold, for us, at a loss. Then you make money back by selling content and services on top. The model is just very, very different from something [on] the scale of Windows, or iOS, or Android.
I think there are 200 million game consoles that are sold in a generation across all of our platforms. That’s less than a year of phone sales. It’s just not even close. People say, well, the scale shouldn’t matter. It does. When you start looking at how we look at open platforms and access, those things do matter. From a legal perspective, they matter. We know that at Microsoft. We had our DOJ time. I think as platforms get to scale, there’s a responsibility there, absolutely,” he said.
So Sony, along with Microsoft, don’t make profits by just selling consoles, and they need additional services they offer to make up for the loss they make on console sales. Apple and Google don’t have this problem.
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