The Big Story

Microsoft's winning strategy? Exclusive games.

Microsoft on Sunday revealed its vision for the future of the Xbox platform, and it can be summed up in eight simple words: "Play It Day One with Xbox Game Pass." That was the message that flashed on the screen repeatedly throughout the company's livestreamed E3 2021 showcase.

Perhaps equally important to its pitch for Game Pass was Microsoft's understated confirmation that while its new games would arrive day one on its subscription service, they would not in fact come to PlayStation … ever.

• "Xbox Exclusive" was the other message shown numerous times throughout Microsoft's E3 showcase, finally settling a debate that's been raging since the company bought major third-party publisher Bethesda Softworks in September 2020.
• Microsoft opened its showcase with the reveal that Starfield, the upcoming open-world game from the makers of Elder Scrolls and Fallout, would indeed be restricted to Xbox consoles, though you can still access the game on PC and through the Xbox Cloud Gaming platform.
• A number of other new games, such as Obsidian's The Outer Worlds 2 and Arkane Studios's Redfall, will be Xbox exclusives, too. Microsoft hopes the addition of major new games to its Game Pass platform at no extra cost — and on the day those titles come out — will drive a surge in subscription signups over the next few years.

The gaming community has a fraught relationship with exclusivity. Developers and players recognize the strategy means depriving some portion of the audience of the chance to play a new game. But both parties also recognize that a strong slate of exclusive titles helps justify the purchase of a new console and, more importantly, the decision to keep playing it.

• Microsoft blazed its own trail around exclusives when it decided a few years ago to begin releasing all first-party games on PC as well as Xbox devices, while also allowing players to move save files and purchases across platforms.
• The strategy has been widely celebrated by gaming fans, and Sony has since begun following suit, though with much longer wait times between PlayStation and PC releases.

But Microsoft's message of inclusivity has run up against the reality of the console gaming business. Despite the many benefits of the Xbox platform, Microsoft has struggled to compete with Sony's impressive slate of first-party exclusives, both on the Xbox One and now with the Xbox Series X.

• "No matter how much rhetoric they offer about how gamers should be able to play everywhere, Microsoft clearly didn't buy Bethesda to release games on PlayStation," Bloomberg journalist Jason Schreier quipped on Twitter.

So Microsoft wants to have its cake and eat it, too. The company would like to uphold its "play anywhere" philosophy that promotes access to new games on multiple platforms, yet it also wants to keep filling out its Game Pass library with fresh, exclusive games and drive subscription revenue as a result. Cloud gaming could be the key to pulling it off.

• If you don't own an Xbox or PC, Microsoft is promising access to all of its new games via mobile phones, tablets and computers, thanks to Xbox Cloud Gaming.
• Last week, the company announced it would use the cloud to deliver Game Pass on smart TVs and Chromecast-like streaming devices. That way, all you need is a new controller (and a pretty good internet connection) to play the new Halo or the upcoming Starfield.

By offering so many avenues into the Xbox ecosystem, Microsoft can stay true to its ambitions around accessibility while still playing the savvy exclusivity game with Sony. The only losers here: PlayStation owners who were hoping to play Starfield and the new Elder Scrolls on the PS5.

It was perhaps wishful thinking to assume Microsoft would ever pay $7.5 billion for a collection of gaming properties and keep providing that content to its primary competitor. I argued back in September that Microsoft didn't need to rely on exclusivity so long as it could bring Bethesda games to Game Pass; the team at Xbox apparently disagreed.

And I'll admit it now: I was wrong to think the industry, and Microsoft in particular, was moving beyond exclusives. We may be entering a new era of gaming driven by the cloud, subscription services and unprecedented performance. But Microsoft proved during E3 2021 that exclusives are a winning strategy and, it turns out, central to its Game Pass-driven future.

OVERHEARD

• "I didn't crunch once, [the] entire production. A couple late nights here and there finishing something up, but completely crunch free. It is possible. Team wellness lets the creativity flow free." —Animator Lindsay Thompson, who works for Sony-owned studio Insomniac Games, revealed on Twitter how production on Ratchet & Clank: Rift Apart involved no mandatory overtime, a controversial practice known in the industry as crunch. Numerous other Insomniac developers chimed in to say the same.
• "This was a tough decision for us to make, but ultimately, we had to act in the interests of the PlayStation Community, and not knowingly sell a game that might result in a bad experience for them." —Jim Ryan, the CEO of Sony Interactive Entertainment, commented on the removal of Cyberpunk 2077 from the PlayStation Store in an interview with Axios's Stephen Totilo last week. There's no public timing on when the game might return.

A MESSAGE FROM MICRON

Recently, Micron announced new memory and storage innovations across its portfolio based on its industry-leading 176-layer NAND and 1α (1-alpha) DRAM technology. But what does "1α" mean, and just how amazing is it?

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Lootbox

• The mobile gaming boom may continue after COVID-19. A new survey from research firm IDC and ad platform LoopMe found that about 75% of people who began playing more mobile games during the pandemic expect to keep up the habit, Gamesindustry.biz reported. A separate report, from GlobalData, estimates the mobile market will grow to $272 billion by 2030.
• Overwatch added cross-play, a half-decade after release. The Blizzard team shooter is finally letting PlayStation, Xbox, Switch and PC players fight alongside and against one another in casual matches, though thankfully not in the game's competitive mode. Console players will need a linked Battle.net account to link up with PC friends, and the feature is launching "soon."
• Electronic Arts suffered a devastating source code hack. Hackers accessed the publisher's internal systems and managed to steal an estimated 780 gigabytes of data, including game source code and development software. Vice reported that to gain access, the hackers tricked an employee over Slack with claims they had left their phone at a party.
• Cyberpunk 2077's developer said stolen data is circulating online. CD Projekt Red disclosed last week that it believes that internal data stolen as part of a ransomware attack earlier this year is being exchanged online. It's not clear what was taken, but the studio believes it includes employee data "in addition to data related to our games."
• Sony inked another exclusive game deal with a new studio. Deviation Games, a new independent studio run by former Call of Duty developers from Activision studio Treyarch, are making a PlayStation exclusive, Sony announced last week. The news follows a similar deal with Haven, a new studio from ex-Stadia exec Jade Raymond.
• Roblox is facing a lawsuit from major record labels. The game platform was sued for $200 million last week by Universal Music Group and other notable labels, The Wall Street Journal reported. The labels claim Roblox enables copyright infringement by letting users upload pirated music and play it in-game without permission.
• Battlefield makers want a post-apocalyptic climate crisis, sans politics. EA last week revealed Battlefield 2042, which features environmental disasters induced by climate change. But in an interview with IGN, developer DICE says "gameplay reasons," not social commentary, drove the decision.
• Facebook welcomed its fifth VR studio. Oculus acquired another maker of a hit VR game, BigBox VR, the company announced on Friday. The studio makes Population: One, a VR battle royale game that's proved quite popular since its release last October. The purchase marks another big investment in social, multiplayer experiences for its Oculus platform.

LOOK OUT FOR

Nintendo bookends E3 2021

The last big event of this year's all-digital E3 will be Nintendo's latest Direct presentation dedicated to new Switch games, airing today at noon ET. Nintendo has for years skipped a physical presence at gaming's biggest expo, opting for a low-key live stream. But since the pandemic, Nintendo's approach has become the industry norm, and the company's feel-good presentations are must-watch affairs for diehard Switch fans.

Tuesday's event is not expected to offer any surprises in the hardware department, though a new "Switch Pro" is rumored to be coming soon. In the meantime, let's cross our fingers for any new info on Breath of the Wild 2.

A MESSAGE FROM MICRON

Recently, Micron announced new memory and storage innovations across its portfolio based on its industry-leading 176-layer NAND and 1α (1-alpha) DRAM technology. But what does "1α" mean, and just how amazing is it?

Learn more