Phil Spencer – the king of Xbox

GameCentral speaks to the head of Xbox about the Xbox One S, the super powerful Project Scorpio console, and his favourite games of E3.

You don’t get many chances to talk with Phil Spencer, the boss of Microsoft’s entire Xbox business. As almost the only public face of Xbox, everyone wants to speak to him all of the time and we already had our go back at E3 2014. We weren’t really supposed to talk to him at E3 2016, but he kindly gave up 10 minutes of his lunch break, and we unkindly managed to stretch that out to 25 minutes.



But there is a lot to talk about when it comes to Xbox at the moment, not least the announcement of the new Project Scorpio console – whose true nature and abilities were initially less than clear.

Thankfully, Spencer was able to explain things in more detail, and also address issues such as the ending of the traditional console life cycle and whether Xbox will ever beat PlayStation outside of the US and UK. Although the thing we enjoy most about talking to Spencer is just how enthusiastic is he is about gaming in general, whether it’s an Xbox title or not…


GC: So what have you seen that you’ve liked at the show so far, that wasn’t an Xbox exclusive? Because obviously they’re all great.

PS: [laughs] Especially those Brummies in the Midlands with their Sea Of Thieves game. That’s looking good, right?

GC: Actually, joking aside, I saw that yesterday and I really liked it.

PS: That’s good, that’s great.

GC: I saw the video of you playing it as well. You should release that to the public, I think it spoke very well of both the game and the execs playing it. Especially because you didn’t know you were being filmed.

PS: [laughs] Where are they showing this video? Where did they get it from?

GC: It’s in the other room, where they demo it.

PS: They’ve got a video of me playing it?

PR guy: Did you not know that?

PS: [laughs] No!

GC: Oh god! I hope I’m not getting them in trouble. [We’re pretty sure Spencer was just pulling our (peg) leg at this point – GC]

PS: [laughs] I’m going to barge in there!

GC: You’re sitting there playing it with Phil Harrison and Kudo Tsunoda.

PS: That’s right, and Kudo went rogue. He went pirate on that thing.

GC: There’s actually a clip of you saying ‘We have to kill Kudo’, which I think deserves to be on YouTube.

PS: [laughs] … I thought Zelda looked good. I haven’t been over to their booth…



GC: No, I’ve got them this afternoon. But the trailer looked amazing.

PS: Yeah, I thought it looked fantastic. In Sony’s show… actually, their take on God Of War this time was interesting. Felt a little more adventure story-based. Less kind of 3D brawler, like it’s been in the past. I was at the Bethesda conference and I thought Dishonored 2 looked interesting…

So I think it’s been a good show for gamers. When I look at the content all up, we’re kind of getting to that sweet spot where people have really found their voice.

GC: I agree, it’s been very positive. I was going to say that every game I’ve seen so far has been great, but… actually there was one this morning…

PS: [laughs] Oh really? What one wasn’t great?

GC: It wouldn’t be fair to say.

PS: Not one of ours?

GC: No, no. Multiformat. [Whispers name of game.]

PS: Ah, okay.

GC: The weird thing about being here at the show is I don’t get much time to check online to see how everything’s being received. But what’s your perception of how it’s all gone down?

PS: We get social sentiment every morning. We meet at 8.30 and kind of look at how things are going. Were you at our briefing on Monday morning?

GC: Yeah.

PS: I think the hardware announcements at the beginning and the end were a new approach for us, announcing two consoles in one show. That was kind of crazy but we did it. We had, I think, a good line-up of games. Good line-up shipping this year and next year, which ran well. I think when people looked all up, between us and Sony, even Nintendo at the show, I think there was a real sentiment that there are a lot of quality games coming on all of the platforms. Which feels good, it feels good for the customers.


Our discussion, a lot of it, has been around Xbox One S and the new console coming this summer, and then obviously the announcement of Project Scorpio and our intent to build a 4K game console for next year. And starting the dialogue with both the creators and the consumers about that. But it’s been good.

GC: Well, on that subject…

PS: Yes? [laughs]

GC: Well, I’ll try to be brief on this because god knows I’m not technical, so these are really just yes/no questions to clarify things for me. So, my understanding is there’s not going to be any Scorpio exclusive games?

PS: That’s right.

GC: And if you don’t own a 4K TV you’re not really going to see any benefit?

PS: Yeah… We specced Scorpio to be a great 4K console. The output of Scorpio is meant to be plugged into a 4K TV and we wanted to make sure the internal frame buffer of the Scorpio can support 4K. So that’s our target: 4K streaming and the power. So really, that’s the focus of us building the console – that is to build a great 4K console.

As people are moving to 4K TVs, I think this is great [points to Xbox One S] if you want to call it a 1K console. It obviously supports 4K video streaming, but from a game standpoint… if you’re looking to play 4K video games, games in 4K, Scorpio is what you should go buy.


GC: It’s just, when I think of what’s needed to justify buying a whole new console I feel it needs to be more than just a change in resolution. It needs to be something my mum, or any other disinterested party, will immediately notice and realise is a big step up.

PS: That’s right.

GC: And I’m not sure this necessarily sounds like that.

PS: And that’s why we’re going to have both in the market at the same time. It’s for exactly that reason. So people ask me: ‘Is this a generational change for a console?’ And I say this is part of the Xbox One family. If you like the way games look today the price point of an Xbox One today, or an Xbox One S this summer, is actually a great console for you. Because many people say, ‘You’ve announced Xbox One S and you’ve announced Project Scorpio – why would anyone buy an Xbox One S?’ And honestly the answer is pretty obvious…

GC: Because you don’t have an 4K TV!

PS: That’s right! It’s price and the capability that you have. And even if you had a 4K TV but you really just want to watch Netflix in 4K and you’re fine with the way the games look now, the Xbox One S is great value at 299, the lowest priced console on the market. It’s got a 4K UHD Blu-ray drive… Project Scorpio is for your core enthusiast who wants 4K gaming. And I’m not trying to sell everybody on Scorpio. We’re going to run the programme with both consoles in market, and I think there’s an audience for both of them.

GC: But if Scorpio is just upping the resolution then when does the next big leap come? I’m not expecting you to talk about a roadmap but are you now thinking perhaps in terms of a one or two-year cycle?

PS: No, we don’t have a roadmap that says we need to redesign and build a new console every year or whatever.

GC: But if it’s not a next generation console and it doesn’t upgrade anything except the resolution… that’s uncharted territory really. I’m not sure how to categorise it, how to describe it to other people.

PS: Okay, well let’s work on that. If you think about the PC space, which I think is a good space to think about as a model. Say I bought a desktop PC, and I bought it last year, and I bought a bunch of games from Steam and I’m playing those games. And then I bought a new graphics card and I put it inside of my PC – all the games I already own still work. Some of those games will actually do things to take advantage of the new graphics card and they will look better.

And then new games that come out are now gonna support the old spec and the new spec, because there’s still millions of people that still have the old spec – ‘cause not everyone upgrades on one day. And games will start to take advantage of the new spec of the higher end graphics card that you have, and those games will look better.

What I’m saying is that the older games that you have are gonna look as good as they ever did, when you move to Scorpio. The reason I say it’s not a generational change is ‘cause all of your stuff still works. And most people when they think of consoles, from PS3 to PS4, Xbox 360 to Xbox One, when you made that transition you basically sold all your old stuff and bought all new stuff. And I’m saying Scorpio is not that.

If you move from Xbox One to Scorpio or Xbox One S to Scorpio it’s gonna feel more like that PC upgrade model, where all your stuff’s still gonna work, your accessories are gonna work, your Live network is still your Live network.

GC: The other problem… and I say this out of technical ignorance, and not being a games developer – in fact I don’t really know anything about what I’m talking about here!

PS: [laughs]

GC: But it seems to me that generational consoles are a good and positive thing. Because you know exactly what you’re dealing with in terms of hardware, you know it’s going to be a constant for about five years, and I’m great believer in art through adversity.

PS: Sure.

GC: In your press conference speech you talked a lot about there being no limitations and developers being able to do whatever they want. But it’s when they’re being artificially limited that many artists do their most interesting work. And in games specifically, technical limitations have always inspired all sorts of interesting new gameplay mechanics, and graphical and programming techniques. Some of these things should be difficult I think… god now, I’m paraphrasing JKF’s moon speech…

PS: [laughs]

GC: But you see what I mean? The benefit of a console is not its power but the fact that it’s a closed system where developers can just concentrate on making the games and not worrying about the next hardware upgrade.

PS: I know exactly what you mean. I understand the sentiment and the dialogue. The performance spec of an Xbox One, of an Xbox One S – which is the same – or even a PS4 are roughly in the same ballpark relative to what a Scorpio is. And they have a large enough installed base of players and gamers that developers will target that audience with their new game.

And for us, all games that ship for Xbox One will ship for Xbox One, Xbox One S, and Scorpio. So those two don’t get left behind. You will still see the kind of creative problem solving on an Xbox One and Xbox One S that you’re talking about in a generational cycle.

The other thing I’ll say, and I understand the sentiment, is that I’m not gonna do anything that causes you to say, ‘Hey, I’ve got my HDTV plugged into my Xbox One, am I gonna start feeling that I don’t get games or they stop doing updates for me?’ So what I’m saying is, ‘No!’ In fact, from a financial standpoint you’re a great customer for me.

Selling you the console is not a great financial move for me [most consoles are sold at little to no profit – GC], so if you stay with your original Xbox One and continue to buy games and stay involved in the service and you just sit there and say, ‘I’m gonna do this for five or six years’ I love you as a customer and I’m gonna continue to support you.

As are the publishers, because that’s a large install base of customers that are still out there and buying and engaging with the content. So, this is why we called it Project Scorpio. It is a project – I wanna talk about it so that consumers are aware of what’s coming. Because I want consumers to be as informed in their buying decision as much as I can make them.

I don’t like to announce something today and it’s due tomorrow, because that means yesterday maybe I bought the wrong one. But Scorpio is gonna be for a core person who is gonna get a 4K TV and plug it in and wants 4K gaming, right? And that’s what we designed for.

GC: So say a developer came to you and said they wanted to use the power of Scorpio for something else. Maybe they wanted to drop the resolution to 1080p and use the processing power usually reserved for 4K to run advanced AI or graphical effects or whatever. Would you just tell them no?

PS: This is the discussion we’re starting with developers. The reason we’re announcing it now is so that we can have discussions about what developers want to do with the power. I can tell you the design point of Scorpio is to run a 4K gaming console.

GC: But if someone finds something clever they want to do with all that power, you won’t necessarily stop them?

PS: This gets a little bit more technical in that the box itself will always output a 4K signal. You can plug it into a HDTV as well, but if you plug it into a 4K TV the signal you’re gonna get is always gonna be 4K. So even if a developer decides that they don’t want a 4K frame buffer – say they want a frame buffer that’s a little smaller so that they can do some graphic techniques in that buffer – we’re gonna output a 4K signal, plugged into a 4K television.

GC: Again, I ask this question out of total ignorance.

PS: [laughs]

GC: But I would’ve thought that from Microsoft’s point of view a new, traditional, generation of consoles would be exactly what you want. From a business point of view you want to be top dog again, you want to be the leading console, but if the industry is moving towards a non-generational upgrade model doesn’t that make it much harder to catch up? Surely you’d much rather you and Sony start again from scratch in a few years, and the early mistakes of the Xbox One are wiped from the slate.

PS: Yeah, I put the customer at the centre of our strategy. I don’t build a strategy to sell more Xbox Ones than they sell PS4s. If we were doing that we wouldn’t bring our games to Windows. Putting our games on Windows also gives someone a reason to say, ‘Hey, I don’t really need to go buy an Xbox One’. For us it’s about the number of engaged players we have on our network and trying to get as many people playing… even our Xbox 360 customers, I love those people and want to keep them playing.

Xbox One customers, Windows customers… we’re really looking at our monthly active userbase as the way we look at the health of our ecosystem. So for me, creating this discontinuity in generations is both not great for the consumer, because suddenly their library of games goes to zero. There’s no other electronic device where if you upgrade it you lose access to the stuff you had before. Your iPhone, your iPad, whatever you’re using, your previous world comes with you. Consoles are the only thing that wipes the slate clean.

And back in the day, when it was about physical media and how that physical media was read, maybe that was okay. But nowadays all these things have Internet connections and all these things can be downloaded.

We announced Xbox 360 backwards compatibility for the Xbox One last year and fans loved it, because they bought those games from us and they wanted to be able to continue to play. So putting the customer at the centre of what we’re doing is really the core to the strategy, and this is the reason I stay out of the dialogue about how many consoles did Sony sell last week versus how many we’ve sold…

GC: But if you were selling more you would say, wouldn’t you?

PS: No, I wouldn’t.

GC: You would! Sony is just enjoying showing off at the moment. Everyone enjoys showing off when they’ve done something good. Although it’s a rare pleasure for me.

PS: [laughs] We’ll test that. [laughs] We’ll test that when the time comes. [laughs] I like Project Scorpio because I think we defined a high-end, premium console experience for 4K gaming. I like Xbox One S because I think we’ve got a good entry level price for a console with great functionality. And we’re selling more Xbox Ones at this point in the generation than we did 360s. So I love where we are.

Sony’s having incredible success, Shawn [Layden] and Andrew [House] and the team there, I know them – kudos to them, it’s great. But I’ll say our strategy is about the customer, their library that they have, their relationships they have on Xbox Live, and making sure we have the best suite of games we have for them to play. And a great suite of hardware that says, depending on where you decide to buy in, we have the right console for you.

GC: And just before we finish I wanted to ask about the European market, or rather the market outside of the UK and US, which is something Xbox has struggled with since well before your time. At Gamescom in particular it often seems like you just announce a new FIFA bundle or DLC deal, and then just call it a day. Considering how far behind you are on the Continent surely it requires a completely different marketing approach, and more locally-generated content. Or is that oversimplifying it?

PS: I think it’s multi-faceted. I think the style of the content that we build… I like the diversity we had on stage. Yes, we obviously opened with Gears Of War but I think from strategy games like Halo Wars 2 to co-op friendly games like Sea Of Thieves to racing games like Forza Horizon 3; when I look at the diversity of games we have, Minecraft as well….

GC: It’s not really a criticism of the line-up but more how the whole Xbox One brand is positioned on the Continent, and I assume in Japan. I was playing Gears Of War 4 yesterday and it was great. But it is still Gears Of War, that’s not a franchise that’s going to change anyone’s opinion about the Xbox brand.

PS: That’s right. I don’t think Gears Of War is the answer for us in Europe. It’s part of a selection, but I don’t think there’s any one game that’s the answer. Sony has had tremendous success in Europe for generations now. They started this back with the PS1 and PS2, they’ve earned the success that they’d had and we’ve got to earn it as well.

I think it’s having the right console at the right price with the right content and the right brand, and putting the customer at the centre of what we do. I believe in the long term approach. We’re long term on trying to win fans in all parts of Europe.

GC: So does that mean more local content is the answer?

PS: When you think of the games line-up that we put up on stage here at E3, we’re looking at that through the lens of a global audience. We had three Japanese-developed games on our stage – Final Fantasy XV, Scalebound, and Tekken 7. And when you look at the diversity of both genre, of rating, frankly even of people presenting. You think about, hey, we want to have a global market with this product, that should mean that we as a team represent the global market that we want to attract.

And where we develop the games… Creative Assembly, you must know them. They’re just south of London. Playground, they develop Forza Horizon, they’re up in Leamington Spa I think.

GC: Royal Leamington Spa.

PS: [laughs] But I think you’re right, our work in any region is unique to the region. Whether you’re in China, whether you’re in Japan, Asia, or wherever. At a company like Microsoft, you can imagine the goal is to have a globally successful product. I feel good about how we’re doing globally, but as you’re pointing out there’s definitely areas where we could do better.

GC: And just a very last question, I was surprised there was no real mention of VR at your press conference. Is that not something that Scorpio could help with, specifically?

PS: Traditionally what we’ve said about VR, and I believe this, is that right now we’re early in the VR revolution and Windows is just a great place for that innovation to happen. We designed Scorpio as a great console that can support VR. We’ll talk more about that later, I just think we’re very early in the VR cycle at the moment.

GC: Have you played the Resident Evil 7 VR demo?

PS: I have not.

GC: It’s impressive in some ways, on the PlayStation VR, but the resolution is really low. It’s like looking through a sheet of gauze. And I’m not sure that’s the sort of experience gamers are going to be expecting.

PS: That’s why we brought a 6 teraflop box. We built a 6 teraflop Scorpio because we’re talking to people like Todd Howard from Fallout, who was in our video talking about what it takes to build a Resident Evil or a Fallout VR experience to the resolution that gamers expects. It’s a 6 teraflop issue. And that’s why we designed Scorpio for that.

GC: That’s very interesting. Thanks very much for your time, I’m sorry to have delayed your lunch.

PS: That’s fine! It’s good to see you again.

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