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Why Xbox Series X having no exclusives is genius – Reader’s Feature

Xbox Series X – does it need exclusives? (pic: Microsoft)
A reader looks at Microsoft’s motives for not having any Xbox Series X exclusives at launch and predicts a new console every two to three years.
There has been a lot of speculation surrounding Microsoft’s decision to not have console exclusives at the Xbox Series X launch . From a historical gaming perspective, it seems stupid but if viewed from a business perspective it is potentially a stroke of genius. I will try and explain why I came to this conclusion.
The lack of Series X exclusives for the first year or so is certainly odd but it is not completely unprecedented. Nintendo released the Legend Of Zelda titles Twilight Princess and Breath Of The Wild on both new and old consoles. Despite owning a GameCube I bought a Wii on release day for Twilight Princess. I also bought Breath Of The Wild on Switch despite having a Wii U. (Although that was not at launch as I waited until Mario Odyssey was released.)
Buying a console to have the best version of multiformat games is also something I have done previously. During the previous generation my main console was the Xbox 360, as it offered the best experience for multiformat games, I also had a PlayStation 3 but I only used that for the Sony exclusives. Therefore, not having console exclusives is not a complete no-no even if it does remove a unique selling point.
This generation I did not buy an Xbox One as the release model was weaker and more expensive than the PlayStation 4. However, despite there being no exclusives that interested me I was tempted by the Xbox One X. The main reason for not buying one was thinking that it would become quickly obsolete with the introduction of the new generation. Microsoft’s current approach however means that the Xbox One X will remain relevant for longer. I am still not going to buy an Xbox One X but if this becomes Microsoft’s business model from now on it might convince me to buy a later Xbox console.
The console market is very cyclical, with platformer holders having to regrow their installed base every console generation. This leads to cyclical profits where a lot of money is invested in a new console and it takes a few years to get a return on investment and then a few years later the cycle restarts. The Xbox division is likely to be far more cyclic than other divisions within Microsoft and will not achieve the investors requirements of year-on-year growth because of these console cycles, whereas other Microsoft divisions will be able to provide continual grow.
Failing to meet targets will have meant needless redundancies and the inevitable loss of some talented people just to appease shareholders and/or upper management. So to combat this (but mainly to make the accounting/forecasting easier), Microsoft are trying to flatten the curve and make profits more predictable. This also reduces the risk of a Saturn-sized mistake bankrupting the division.

I can easily see a structure where there are three Xbox consoles on the market at any one time and each has around a 10-year life. So every two to three years a new Xbox model is introduced and the bottom model stops being sold. This enables Microsoft to always have a premium $600+ machine (Series X) that is best in class but also a competitive mass market $400 model (Lockhart) and a budget $200 option (One X).
Microsoft have already ensured that their games are backwards compatible which means regardless of which future Xbox you buy all your games will still work. And with xCloud they can probably do the opposite too, whereby if you have an Xbox One you would be able to stream all future titles too.
Game Pass is clearly positioning itself to be the number one subscription service and when coupled with xCloud it could enable you to access any game on the service regardless of which Xbox you own, making Microsoft’s first party games Game Pass originals as opposed to console exclusives. One-off games purchases would still continue as they are now, and physical games will need to specify the minimum spec Xbox system required to run them. These will, however, be for non-subscribers as all games would be available on Game Pass at launch.
This shift to a combined Game Pass and xCloud would mean that if you have an older Xbox console (or older PC) new games could still be played, albeit by streaming only. Everyone (apart from Google) knows this will not be as good as running it locally but it will still be a way of accessing a game. And there will be people that start streaming a new game on an Xbox One S and decide they like it enough to buy an XBox Series X to improve the experience by running the game on local hardware.
Combining Game Pass and xCloud would also ease the transition from owning local hardware to streaming. At the point a gamer’s Xbox console no longer runs the latest games locally they may find that their Internet infrastructure has improved enough that playing the game via xCloud is good enough and they do not need to update their physical console.
I think Game Pass will be Microsoft’s real bread winner from now on and growing the number of subscribers is an achievable way of delivering year-on-year profit growth. From Microsoft’s perspective it would be great if Game Pass/xCloud helps to sell Xbox Series Xs and future consoles, but for Microsoft this now looks like a bonus sale and not the main objective.
If Game Pass is as great as everyone says (which I have no reason to doubt) it will be hard to step away from the Xbox family of consoles once you have subscribed. That is of course assuming the service maintains its quality. And if you stay subscribed, Microsoft will keep making money.
By reader PazJohnMitch

The reader’s feature does not necessary represent the views of GameCentral or Metro.
You can submit your own 500 to 600-word reader feature at any time, which if used will be published in the next appropriate weekend slot. As always, email [email protected] and follow us on Twitter .
MORE: The ideal time to buy a new console – Reader’s Feature

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