5 min read
On the cusp of the fifth price hike across Microsoft’s Xbox portfolio in 2025 alone, some remain bewildered by how a five-year-old console is more expensive than the marginally more powerful one released in 2024, some team up to delay the inevitable, and many are canceling their Game Pass subscription — or stacking up while it’s still cheap.
The state of the world and shady Game Pass economics aside, Phil Spencer and Xbox appear to be hanging on for dear life after Microsoft CEO Satya Nadella gave a blank check some years ago to bolster Xbox’s value towards the larger Microsoft vision, which increasingly appears set towards advancing technology used with large language models (LLMs) for the foreseeable future.
How did we even get here to begin with?
What I once saw as a good thing, the Activision Blizzard King acquisition left me sour after the post-merger carnage. Already, I was laying the blame for the current state of Xbox at its feet. TheCollapseCo argues differently — the current state of Xbox goes even further back. Back to Don Mattrick.
Mattrick, an EA alum, took over a profitable line of business from his predecessor, Peter Moore. Moore made Xbox profitable in barely five years — a remarkable achievement for a newcomer console brand. Mattrick's first major initiative, the Kinect sensor, failed to move the needle. Kinect's legacy? A cleverly implemented gimmick, borrowing heavily from Nintendo's Wii. Still, the Xbox 360 remained profitable. As early as 2011, its successor, codenamed 'Durango', was in development. How do you capitalize on the success of your predecessor? As we would later learn, they didn't.
As the internet became ever more present in everyday lives, consumers’ habits evolved significantly from when the seventh generation of consoles first launched. Playing Blu-Ray discs from their PS3s or watching Netflix on their 360s was one use case, but the key difference was that those boxes were gaming consoles first. Media features were the cherry on top. Upon its introduction, the Xbox One was positioned as an all-in-one media entertainment center that just happened to be a games console. The above video includes a supercut of the many times the word ‘TV’ was said on stage during the presentation, and I genuinely think they missed some — it was so bad, entire memes were born out of it.
Outside of this lack of focus on games, there were concerning rumors of how used games weren’t going to be a thing on Xbox One, and also being an ‘always on’ console. This last point, specifically, was flippantly dismissed by Mattrick — comments that were met with ire by the player base. Sony was watching, taking the temperature in the room. A month later, during the unveiling of the PlayStation 4, the Xbox One dunks practically wrote themselves. And that used game instructional video Sony put out? Jack Tretton put Xbox out to pasture.
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I was a huge Xbox fanboy in those days. I believed this was a momentary blip on their momentum, still standing by my choice to back Xbox — I was that burned out with Sony’s handling of the 2011 PlayStation Network hack. As such, I neglected all the obvious signs: the clunky interface, the Kinect requirement, and the lack of games. Even Call of Duty, with which Microsoft had a timed exclusive agreement with Activision, took its business to Sony. All of that didn’t matter: in my head, Xbox once again was the underdog it was when the original hardware debuted.
Mattrick was out, and Spencer was in. His first directive? Stop the bleeding, and stop it fast. Many of the consumer-friendly initiatives were spearheaded by him: the stripping of Kinect, a robust backward compatibility with older Xbox consoles, whose implementation is widely agreed to be nothing short of a technological marvel, and the widespread adoption of crossplay, among others.
However, Microsoft would never recover from that massive blow. The Xbox One sold less than half of the PS4, coming in at a solid third. By Spencer’s own admission, out of all the console generations to lose, losing this one was devastating. And the reason? This generation saw the widespread adoption of digital libraries. When you build a library on one platform, you tend to stay there; Xbox’s mismanagement under Mattrick ensured a generation of not only PlayStation fans, but lifers.
I’d finally come to my senses at the beginning of this year as I saw the brand I once went to bat for all but abandoning their most ardent fanbase, calling it quits once Forza Horizon 5 debuted on PlayStation. The writing was on the wall: Xbox is becoming a third-party publisher. There’s no reason to back this horse anymore. With the increasing adoption of PC releases, despite owning a PlayStation 5, I wasn't going to back Sony, whom I still have reservations about after the PSN hack. Instead, I’m adopting PC gaming. I’ll finally use my PC for the primary purpose I built it for all those years ago…
Still, the apparent demise of Xbox has been painful to watch as a former fan. When the dust settles, what’ll remain is a shell of its former self, all because Nadella wants a return on his investment in Xbox. If this is bad, Nadella shutting down Xbox — reportedly what he always wanted to do before Spencer convinced him otherwise — is much worse. What Microsoft ends up doing remains to be seen.
And it all started with Don Mattrick.