Phil Spencer of Microsoft openly acknowledges that the company was defeated by rivals in the console wars.

Phil Spencer from Microsoft seems a little disheartened when discussing the performance of Xbox. In a conversation with Kinda Funny Games, he mentioned that although the company is not trying to “out-consol” Sony or Nintendo, there is no real solution or victory for Microsoft.

As a result, Microsoft decided to focus on cloud and subscription services such as Game Pass with its latest generation of consoles instead of waging a console war since it is in third place. Spencer stated, “It’s on us, not on anybody else when the top two players are as strong as they are and have in certain cases a very discrete focus on doing deals and other things that kind of make being Xbox hard for us as a team.”

While aspiring to create exceptional gaming experiences for Xbox users, Spencer acknowledged that it is impossible to win against Nintendo or Sony with conventional console strategies. He said, “It’s just not true that if we go off and build great games, suddenly you’re going to see console share shift in some dramatic way.”

Spencer does remain positive regarding devices that gamers can use to play games purchased across various platforms, such as consoles, PCs, and handhelds like Steam Deck. However, he doesn’t anticipate Microsoft abandoning the console market entirely to focus solely on streaming as 90% of those who purchase consoles prefer Nintendo, PlayStation, or Xbox. Furthermore, it is not cost-effective for consumers to purchase a console that will not allow them to carry older games forward to the newer generation.

Spencer acknowledged that this is the first generation where the most popular games are those that were available in the last generation such as Fortnite, Roblox, and Minecraft. Spencer stated, “There is no world where Starfield is an 11 out of 10 and people are selling their PS5s. That’s not going to happen.”