These were serious weeks for Microsoft. When Satya Nadella took over the burdensome position of CEO in February, he made it his business to realign the gigantic company for the future. For despite the gigantic profits that Microsoft still makes every year, it cannot be denied that Microsoft has receded into the background in the triathlon between Google and Apple. The future, that much seems clear to everyone, is no longer the home desktop PC. Those who want to control the future must take control of smartphones and tablets. But while Apple and Google are fantastically positioned in this area with their iPhone and iPad and Android respectively, Microsoft has so far failed to influence the mobile future at its own discretion. For too long, the Redmond-based company ignored the threat in the form of iOS and Android and, despite its great efforts with Windows Phone and Windows 8, is now only laboriously able to catch up.
Now, for the first time, Nadella lets actions speak for themselves. Within the next year, Microsoft will lay off a total of around 18,000 employees – by far the largest wave of redundancies in the company’s history. Most of the jobs – just under 12,000 – will be in the Nokia division, which Microsoft took over last year and now seems to want to shrink in size by integrating into the Microsoft group. But even in the usual Microsoft divisions, 6,000 people will soon have to lose their jobs. This also includes Xbox departments: The Xbox Entertainment Studios will be closed before they can show the first fruits of their labor and also at Xbox EMEA (Europe, Middle East, Australia) in the English Reading 75% of the jobs are to be cut.
Of course, you should be careful about making statements about the future of Xbox. But more interesting is the new position Nadella sees his company in. They want to radically realign their focus. Instead of Devices & DFGH Microsoft is to act in the future mobile first and cloudfirst . Networked life in the cloud and the mobile revolution are to be Microsoft’s hobbyhorses in the future – people are calm and claim not to be of the opinion that they have already missed the mobile train.
But what does this mean for the Xbox? Phil Spencer, Head of Xbox, underlines in his internal memo on the closure of Xbox Entertainment Studios the importance of Xbox in the company’s portfolio – but raises completely new questions.
Phil Spencer emphasizes how important the Xbox and video games are – but he links this directly to the mobile world. But how do the words “mobile-first” and “Xbox” fit together? After all, the Xbox in its current form is everything, but not mobile. As a home console, the Xbox One sits comfortably under the home TV, wants to be the home entertainment hub and at the same time network its own home to a greater extent. But mobile? No, none of this is mobile.
So how do Phil Spencer’s words fit into the reality in which the Xbox business currently finds itself? How can the stationary Xbox business meet the demands of a mobile world? It can probably be ruled out that Microsoft wants to release a handheld version of the Xbox – after all, in Redmond you can see very clearly that the competition in the form of Sony and Nintendo with their portable gaming machines are struggling with bigger and smaller problems.
So do you want to keep the console world as it is today and just add new features that can be used on the go? Would you like to put more emphasis on the video streaming technologies of Xbox One, so that players can watch their favourite games on the go via Twitch? Are you planning a cloud service – similar to Sony’s Gaikai – with which Xbox One games can also be streamed to tablet and co via mobile Internet?
Or will the “Xbox” brand be increasingly brought to life on tablets and smartphones in the future? Despite last year’s faux pas, the brand has an excellent reputation that could help Microsoft conquer the mobile market. Will Microsoft be the first of the three console manufacturers to declare the era of stationary high-tech consoles over and steer future ambitions towards the smartphone sector? Economically, this would be a risky but interesting move: The mobile market is considered unpredictable and even though billions are being made and everyone jumps on the bandwagon, most companies are still hesitant to pepper large budgets on smartphones. If Microsoft has the courage to reinvent Xbox as a mobile gaming brand, this would perhaps be a decisive advantage that the mobile Windows versions could help in the fight against Android and iOS. Because as Spencer says: “Games are the most important part of digital life in the mobile-first world.
One thing is certain: the future of Xbox One is certain. Despite smaller and larger slip-ups, Microsoft will continue to cling to the current console in the coming years and satisfy fans with a large selection of baretta runes toa games.