Microsoft’s Bid for World Domination of Games

Microsoft is getting ready to expand Xbox Live, its gaming network/community, from Xboxes and Windows PCs to include Android, iOS, and Nintendo Switch. This will grow the potential market/community for Xbox live to over 2 billion devices. Notably, this includes pretty much every major gaming platform – except MacOS (the number of MacOS game players is minuscule) and (of course) Sony PlayStation and their network.

It’s a smart move. Once upon a time, the walled gardens of Xbox and PlayStation were enormous compared to any other game audience. Now, single games like Fortnite or League of Legends dwarf the size of those console audiences. Hardware generally is powerful enough to play most games pretty well, perhaps with some graphics compromises that really don’t matter to the majority of players. (Fortnite is doing extremely well on mobile, for instance, despite the differences in controllers and graphics with consoles or PCs.) The gameplaying audience is mostly not concerned with being fans of a particular hardware, as they often were in days gone by – now they want to play a game wherever they are, with whatever hardware is handy.

Microsoft is smart to recognize that, and to attempt to get out in front and be the gamer’s network across all platforms. It’s a smart competitive move, particularly because Microsoft’s rivals aren’t going to go there – can you see Nintendo doing something like that? Or Sony? Sony seems too satisfied with its market leadership, resisting all efforts to open up (Fortnite pried them open a crack, after weeks of fan pressure).

Microsoft wants to gain market leadership, or at least recurring subscription revenue and extensive virtual goods sales. Particularly as the next generation of consoles looms on the horizon. Though once again, it’s unclear whether there may be future console generations beyond this. The biggest games are growing well beyond the platforms they began on. As billions of people now have access to a gameplaying device, the biggest money lies in finding the best games to reach the widest number of people – and the best business models to monetize those people.

Microsoft sees connecting those game players together as a great way to make money by marketing games, virtual goods, and services to the widest possible audience. If they can get the details right, this looks like they are correct. Grand concepts are one thing, and implementation is another. I look forward to seeing how well Microsoft does at implementing this vision.