Microsoft\u2019s Xbox business needs to get bigger. The company\u2019s Xbox Series S and X sales still lag behind Sony\u2019s PlayStation 5, and Microsoft Gaming CEO Phil Spencer has previously admitted its Xbox Game Pass subscriptions were slowing down<\/a>, too. He admitted that in 2022, a dry year for\u00a0Xbox\u00a0games after\u00a0Microsoft\u2019s big exclusive Bethesda game\u00a0Starfield\u00a0<\/em>was delayed.<\/p>\n<\/div>\n An Xbox Game Pass slowdown might be why I\u2019m hearing that a number of Xbox exclusives are coming to consoles with which Microsoft usually competes. Sources familiar with Microsoft\u2019s plans tell The Verge<\/em> that the company is getting ready to launch a select number of Xbox games on PS5 and Nintendo Switch. Weeks of rumors suggest that Hi-Fi Rush<\/em>, Sea of Thieves<\/em>, and even Bethesda titles like Starfield<\/em> and Indiana Jones<\/em> could appear on non-Xbox platforms.<\/p>\n<\/div>\n The first two games that are set to appear on rival consoles are Hi-Fi Rush<\/em> and Pentiment<\/em>, according to sources. Microsoft is also currently planning to launch Sea of Thieves <\/em>on non-Xbox platforms later this year, with other first-party titles also under consideration.<\/p>\n<\/div>\n Launching Xbox games on PlayStation or Nintendo Switch is a seismic shift in strategy, and not one that Microsoft will have taken lightly. It will give Microsoft more reach for its first-party games and an opportunity to generate more gaming revenue, but it also comes with plenty of risks. <\/p>\n<\/div>\n Microsoft\u2019s overall gaming business just passed Windows in terms of revenue<\/a>, thanks to the Activision Blizzard acquisition. That giant $68.7 billion acquisition will be weighing on Microsoft\u2019s mind, particularly when you consider that Call of Duty<\/em> is a big multiplatform game that drives key revenue across these platforms and mobile. That slowdown in Game Pass will also be a part of why Microsoft is even considering more multiplatform games.<\/p>\n<\/div>\n In May 2022, Microsoft had an ambitious goal of 100 million Xbox Game Pass subscribers by 2030. At the time the service, which lets Xbox owners subscribe to a library of games, was sitting at 25 million subscribers, up from 18 million in 2021. It looked set to continue growing rapidly amid Microsoft\u2019s device-agnostic focus on consoles, PCs, and cloud gaming.<\/p>\n<\/div>\n Then Xbox Game Pass started to stall. Starfield <\/em>and Redfall<\/em>, which were set to be major Xbox exclusives, got delayed<\/a> from a 2022 release to 2023, with Starfield <\/em>missing a key holiday window.<\/p>\n<\/div>\n \u201cIt feels like we are likely to go through a gap of almost 16 months between big exclusive launches on our platform,\u201d said Microsoft Gaming CEO Phil Spencer in an internal email to Xbox leaders in May 2022, revealed in the FTC v. Microsoft<\/em> case. \u201cThis is really a disaster situation for us given all we\u2019ve invested in content across studios at our [Game Pass] content fund.\u201d<\/p>\n<\/div>\n In the months since, Microsoft hasn\u2019t provided any update on subscriber numbers to investors. It\u2019s been more than two years since the 25 million figure was announced alongside the company\u2019s Activision Blizzard acquisition, and some analysts estimate<\/a> Microsoft is only at around 33 million subscribers.<\/p>\n<\/div>\n If accurate, that\u2019s around 33 percent growth in two years. Microsoft targeted a 73 percent growth rate<\/a> for Game Pass subscriptions for a single fiscal year that ended in June 2022, but only managed 28 percent. The company then dropped Xbox Game Pass growth<\/a> as a target for Satya Nadella\u2019s executive compensation last year, after first exceeding its ambitious Game Pass internal targets in 2020 and then failing to meet compensation targets for two years in a row.<\/p>\n<\/div>\n Microsoft has instead focused more on PC Game Pass growth this past year and scaled back some of its Xbox Cloud Gaming plans. The combination of Xbox Series S, the effective $299 Game Pass console, and cloud gaming was supposed to drive a big part of the 100 million Game Pass members figure that was leaked in FTC v. Microsoft<\/em> materials, but sales of Microsoft\u2019s latest consoles won\u2019t get the company there alone.<\/p>\n<\/div>\n Microsoft has been looking at other avenues for Xbox Game Pass or gaming revenue growth, particularly on mobile \u2014 a key reason behind its Activision Blizzard acquisition. The publisher\u2019s lineup includes mobile games like Call of Duty Mobile<\/em>, Candy Crush<\/em>, and Diablo Immortal. <\/em>A new Xbox mobile gaming store could launch this year<\/a>, with Microsoft banking on the EU\u2019s Digital Markets Act<\/a> forcing Apple and Google to change how they distribute apps on mobile devices, and ultimately open up their platforms and stores to competition.<\/p>\n<\/div>\n But Apple\u2019s surprise new plan<\/a> to comply with the European Union\u2019s latest tech regulations has left Microsoft and others frustrated. \u201cApple\u2019s new policy is a step in the wrong direction,\u201d said Bond in reaction to Apple\u2019s proposals last month<\/a>. Spencer had previously described the Xbox mobile store and the EU\u2019s Digital Markets Act as a \u201chuge opportunity\u201d for Microsoft.<\/p>\n<\/div>\n All this means that adding a bunch of games to the Switch and PS5 won\u2019t necessarily help Microsoft\u2019s embiggening ambitions for the Xbox. That\u2019s why I suspect Microsoft might need to tease more of its future hardware vision.<\/p>\n<\/div>\n Microsoft held an internal town hall for Xbox employees last week where Microsoft Gaming CEO Phil Spencer, head of Xbox game studios Matt Booty, and Xbox president Sarah Bond all addressed employees. Shannon Liao<\/a> first reported details of the town hall.<\/p>\n<\/div>\n While Xbox executives reassured employees that Xbox hardware would continue, they didn\u2019t directly address the elephant in the room: those persistent rumors about Xbox exclusives coming to the Nintendo Switch and PS5.<\/p>\n<\/div>\n Even rumors of the move rattled Xbox fans with fears that Microsoft may eventually scrap Xbox console hardware, render digital Xbox libraries useless, and just publish games on rival platforms. But after 20-plus years of Xbox hardware, it seems inconceivable that Microsoft would suddenly walk away from the device ecosystem that drives its Xbox platform and revenues. Instead, I suspect Microsoft will have a vision that distracts from some select Xbox games heading to rival platforms.<\/p>\n<\/div>\n There are whispers of an Xbox handheld, with Windows Central<\/em>\u2019s Jez Corden claiming<\/a> earlier this month that \u201cXbox literally greenlit several new hardware projects in the past couple of weeks.\u201d Days later, Corden speculated about a potential Xbox handheld<\/a>, and Spencer liked a post on X describing the handheld as \u201cinevitable.\u201d Microsoft has a habit of teasing future hardware: at E3 2016, it announced Project Scorpio<\/a>, describing it as \u201cthe most powerful console ever\u201d before it shipped 18 months later as the Xbox One X.<\/p>\n<\/div>\n A disc-less Xbox Series X refresh and a new Xbox controller<\/a> leaked last year and those could still arrive, but Spencer pretty quickly dismissed the leak<\/a> as old plans, so maybe that hardware has been canceled.<\/p>\n<\/div>\n Regardless, without some public commitment to future hardware, Microsoft could have a problem. By gradually opening up Xbox games to Nintendo Switch and PS5, this also opens up questions over how many games will be multiplatform in the future. If you can play Xbox games anywhere \u2014 including PC, the cloud, the Nintendo Switch, and the PS5 \u2014 then why would you want an Xbox? That\u2019s the big question that Microsoft needs to answer on Thursday.<\/p>\n<\/div>\n<\/div>\n