• CEO of Microsoft Gaming and head of Xbox, Phil Spencer took the stand during the FTC vs, Microsoft hearings at the weekend.
• During his deposition, Spencer unpacked the state of the console gaming industry as he saw it.
• He claimed that Xbox is third in the console wars, behind PlayStation and Nintendo.

We are now a couple of days into the hearings between the Federal Trade Commission (FTC) and Microsoft, and much like the saga involving Epic and Apple, the revelations keep on coming. The latest came via the CEO of Microsoft Gaming and head of Xbox, Phil Spencer, who unpacked the current state of the gaming industry and the console wars.

According to Spencer has constantly been playing catch in the space, trailing in third spot behind PlayStation and Nintendo in particular.

This is in keeping with much of the rhetoric that Microsoft has espoused over the past year or so in order to persuade regulators across the globe that it should be given the green light to acquire Activision Blizzard.

While it remains to be seen what would happen to the gaming landscape should Microsoft indeed get the deal to be pushed through, the acquisition would no doubt give it a significant bump across all gaming metrics.

In fact, catching up to PlayStation appears to the company’s core focus right now, as the hearings also revealed that Microsoft only chose to purchase Bethesda’s parent company ZeniMax after is found out that Starfield was going to be a PlayStation-exclusive.

“When we acquired ZeniMax one of the impetus for that is that Sony had done a deal for Deathloop and Ghostwire… to pay Bethesda to not ship those games on Xbox,” noted Spencer.

“So the discussion about Starfield when we heard that Starfield was potentially also going to end up skipping Xbox, we can’t be in a position as a third-place console where we fall further behind on our content ownership so we’ve had to secure content to remain viable in the business,” he added.

This makes sense, especially as the quality of Microsoft’s exclusives still pale in comparison to those of PlayStation.

As for what Spencer views of the current landscape, when asked by the FTC’s lawyers whether Microsoft had lost the console wars?, he took a long pause before giving his considered response.

“As the console wars is a social construct with the community, I would never want to count our community out, they’re big fans,” he explained. “If you look at our market share in the console space over the last 20 plus years, we’re in third place. We are behind Sony and Nintendo in console share globally,” the Xbox head claimed.

Using Spencer’s own 20 year timeframe, in 2003 the PlayStation 2 was on the market for three years already, while the much maligned original Xbox was only out for two years. The former went on to be one of the best-selling consoles of all time, while the latter is forgotten about by many in the gaming community.

Here we can understand Spencer’s claims that it has played catch up with PlayStation over the past two decades, but in all fairness, a product like Game Pass has been the great equaliser, and in the view of many cost savvy gamers out there, the more worthwhile offering.

As such, while PlayStation has dominated in recent years, to say Xbox is woefully outgunned, does not paint the full picture. This particularly as the company is willing to pay up as much as $69 billion in order to acquire Activision Blizzard.

Spencer went on to do detail his thoughts on PlayStation, and how Xbox simply has not been able to compete with it.

“Every time we ship a game on PlayStation… Sony captures 30 percent of the revenue that we do on their platform and then they use that money among other revenue that they have to do things to try to reduce Xbox’s survival on the market. We try to compete, but as I said, over the last 20 years we’ve failed to do that effectively.

“Today, with the majority of our business residing as the third-place console business, we are not a robust business,” he continued when asked whether Microsoft is meeting its internal targets.

Whether his testimony will be enough to convince the judge presiding over this hearing that Microsoft is in as bad a state as Spencer is claiming, remains to be seen.

[Image – Photo by Billy Freeman on Unsplash]