Phil Spencer Says Xbox Will Stick With Physical Games… For Now

In a recent interview, the CEO of Microsoft Gaming, Phil Spencer, spoke about all things Xbox. He was pressed on some tense topics, ranging from the recent wave of layoffs that hit the company to the future of physical media at Xbox – and for the most part, he was transparent and forthcoming. In a sweep, the interviewer – Stephen Totilo – covered cloud gaming, the rise of AI, and what’s next for Xbox Game Pass, producing several top-tier topics upon which to grill the Microsoft head.

It was a telling interview that produced some key results. Firstly, Spencer stressed that Microsoft does what the consumer wants when it comes to the differentiation between digital and physical media. There’s no intention to wipe out disc-based games for now, but it’s impossible to argue with the digital revolution that’s changing the face of the industry. He pointed out that cloud adoption is ‘finally picking up’, which is causing a further decline in the number of consumers opting to buy physical games.

Here’s the full breakdown of the interview.

Phil Spencer Makes It Clear

phil spencer xbox

Speaking on the future of physical media at Xbox, Phil Spencer was relatively clear:

‘We are supportive of physical media, but we don’t have a need to drive that disproportionate to customer demand. We ship games physically and digitally, and we’re really just following what the customers are doing. And I think our job in running Xbox is to deliver on the things that a majority of the customers want. And right now, a majority of our customers are buying games digitally.’

Spencer stressed that gaming consoles are the ‘last consumer electronic devices’ with disc drives. In a world where everything from music to television is almost entirely digital, it’s a very strong point that stands in favour of dropping physical-based games. On that topic, Phil Spencer also spoke about cloud gaming, referencing that the adoption of the ecosystem has been slow but it’s picking up over time. He said that Microsoft is working hard to keep up with the growth: ‘Any conversation we have on cloud is very time-dependent because it’s growing so fast.’

What Comes Next

Phil Spencer stressed that Microsoft isn’t ‘doing a good enough job finding new players’, and that the firm needs to find ‘new ways of delivering games’ to reach a wider audience. The recent layoffs at Microsoft hit the gaming branch quite hard, and Spencer touched on why they had to happen:

‘I’d say it was a combination of us looking across the full portfolio of what was working, which we have to do, and running the business, as well as areas of alignment between Activision, ZeniMax and Xbox.’

There were key mentions of what’s happening with Call of Duty following the Activision Blizzard acquisition, too. It was confirmed that Call of Duty will be coming to Game Pass – as will other Activision Blizzard games. It’s expected that ‘Call of Duty 2024’ will hit the subscription service on launch day, which will mark a historic first for the platform.

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