Xbox chief: We want to regain trust more than we want to beat Sony

Spencer says doing right by customers is more important than market share.

Kyle Orland – Oct 9, 2015 12:15 pm | 168

Credit: Aurich Lawson

Anyone who’s been following Ars Technica’s regular looks at quarterly console sales numbers knows the PlayStation 4 has a significant lead as far as worldwide market share is concerned. You might think that this sales deficit has caused some consternation at Microsoft, but Xbox’s division chief, Phil Spencer, said he’s not that concerned with relative comparisons.

In an on-stage interview at the GeekWire conference earlier this week, Spencer said he was initially very motivated by the thought of beating Sony right after he took the Xbox chief position last March. “I started off making statements like ‘We want to win,’ making it a competitive thing,” he said.

Since then, though, Spencer said he “quickly realized you can only control, as a leader, the things that you can control. Basing your success on an external view of your share of what Sony’s doing—Sony’s having incredible success with the PlayStation 4, and they’ve earned that. It was much more beneficial and I could have more impact focusing on the product that we had.”

That doesn’t mean Spencer is totally unconcerned with how the Xbox One is selling. The Xbox team still needs to bring in money for Microsoft to keep the system going: “If it’s not a profitable business for the company, I can’t guarantee it’ll be there,” he said. But the fact that the PlayStation 4 is doing well doesn’t necessarily lead to a zero-sum result of Xbox failure, he said.

“[Market] share is important, but more important than share is are we gaining new customers, are they buying games, are they engaged in the service,” he said. “[Sony and Nintendo] can have success and it doesn’t necessarily come at the expense of what Microsoft’s main ambitions are.”

“I don’t know [if we can beat Sony],” he continued. “They have a huge lead and they have a great product. [But] we’re not motivated by beating Sony, we’re motivated by gaining as many customers as we can.”

Spencer acknowledges that this is a position that’s easier to take while Microsoft is stuck in second place. “People will say ‘You’re losing, so of course you’re not going to bring that up,’” he said. Still, he thinks his lack of concern about relative market share would be unchanged even if Microsoft was winning the battle.

Regaining trust

Microsoft Xbox Chief Phil Spencer speaks at the GeekWire conference.

While Spencer wasn’t in charge of Microsoft during the period of the Xbox One’s late 2013 launch, he was a member of the Xbox team during that turbulent time, which included a high-profile reversal of its used game policies and a few other controversies. The company is still working to claw its way back from some of those mistakes, Spencer acknowledged.

“What we fundamentally lost was the trust of our most loyal customers,” he said. “Whether it was always-on, used games, we lost the trust in them that they were at the center of our decision process. Were we building a product for us, or were we building a product for gamers?” Spencer recalls major Xbox fans, people with Xbox logo tattoos, “coming to us almost in tears because they felt like the direction we were going with the product didn’t include them.”

The ripple effects from those pre-launch jitters are still being felt years later. At the recent Gamestop Expo in Las Vegas, Spencer said he heard from store managers who have customers that “still walk into the store thinking the Xbox One won’t play used games… That perception that gets set early on, because consumers have five seconds to internalize your brand and your message and then they move on. They’re not going to spend time to read what you say afterwards… regaining that trust is incredibly difficult.”

But Spencer thinks that trust is coming back, in part thanks to new features like Xbox One’s backwards-compatibility with the Xbox 360. That won’t make Microsoft much money directly—Spencer doesn’t expect to sell a lot of new Xbox 360 software to Xbox One owners—but he said it shows that Microsoft is “spending the time to recognize the value and the investment the customer had made in our product in the previous generation and bringing that forward… If somebody’s going into the store this holiday and you’re a 360 customer… the fact that our system plays games you already own is a big selling point.”