Summary

• Xbox's shift away from exclusivity could indicate a change in strategy amid declining sales and a lacking library of console exclusives.
• The acquisition of game development studios hasn't been enough to boost Xbox's exclusives, with recent releases receiving mixed reactions or launching as disasters.
• Xbox's focus may increasingly shift towards cloud gaming with Game , potentially causing Microsoft's involvement in the gaming industry to be more software-focused than hardware-focused.

As rumors circulate regarding the end of exclusivity for several Xbox titles, including even heavy hitters like Starfield and the Indiana Jones, the obvious, immediate conclusion is that the Xbox has finally "lost" the console war — but the new approach to exclusivity could also be pointing towards a shift in strategy. Compared to its most direct competitors in the PlayStation and Nintendo Switch, the Xbox has been on a downward trend for the past few years, partially owing to a lacking library of console exclusives.

Though the Xbox has historically been home to a strong lineup of exclusive titles, like Halo and Gears of War, the past few years of Xbox releases haven't quite lived up to the console's history, with many of the console's more recent exclusives, like Starfield, garnering mixed reactions — or, worse, launching as complete disasters, as in the case of Redfall. This is in stark contrast to PlayStation's recent exclusive releases, which have included critically acclaimed and high-selling games like God of War: Ragnarök, Horizon Forbidden West, and Spider-Man 2, as well as highly-anticipated titles like Final Fantasy VII Rebirth.

The (Possible) End Of Xbox Exclusives Points To A Shift In Strategy

Xbox Might Be Ducking Out Of The Console War Entirely

Although rumors seemingly point towards the end of Xbox, with the potential release of exclusives like Starfield and Hi-Fi Rush on the PS5 seemingly marking Xbox's "surrender" in the console war, the pivot to non-exclusivity may also point to a change in strategy. While the Xbox consoles have been on the decline, the Xbox Game service has had the opposite trajectory, becoming massively successful off the back of its huge library of games and multi-platform availability. In spite of Xbox games, like those shown in the recent Developer Direct, a strong library of exclusives may not be Xbox's winning strategy.

Xbox's Studio Acquisitions Haven't Been Enough

Although Xbox might be pivoting from exclusives in the near future, the past few years for the console have seemingly been full of attempts to build a strong library of Xbox-only games, with a major component of Microsoft's strategy being the acquisition of other game development studios. Although the tendency of Microsoft to purchase other studios dates back as far as the early 2000s acquisitions of Bungie and Rare, the company's more recent streak of purchases began in 2018, with the acquisition of several notable game developers, including Ninja Theory and Obsidian Entertainment.

Since 2018, Microsoft has acquired nine different gaming development studios or companies: Playground Games, Compulsion Games, Undead Labs, Ninja Theory, Obsidian Entertainment, and InXile Entertainment in 2018, Double Fine Productions in 2019, ZeniMax Media (Bethesda, Arkane, id Software, Machine Games, Tango Gameworks, Zenimax Online Studios) in 2020, and Activision Blizzard in 2022.

In the following years, these initial acquisitions were followed by the purchases of even larger studios, with Microsoft's 2020 purchase of Zenimax Media being especially notable for bringing Bethesda Game Studios under Xbox's wing - presumably meaning that Bethesda's at-the-time titles like Starfield and The Elder Scrolls VI would be Xbox exclusive, unlike the developer's previous multi-platform releases. The acquisition was, ostensibly, a huge victory for Xbox in the console war, guaranteeing the exclusivity of massively popular and successful games.

By far the largest (and most controversial) acquisition, though, was Microsoft's purchase of Activision Blizzard, which, despite raising concerns from both the FTC in the U.S. and the CMA in the U.K., was finalized in 2022. The acquisition of huge Activision Blizzard franchises, chief among them the ubiquitous Call of Duty, and the potential for them to be made exclusive to Microsoft services like Game would lead the CMA to block the deal until Microsoft agreed to grant Ubisoft the rights to provide Activision Blizzard games on their own services in the U.K.

The Xbox May Not Have A Future As A Physical Console

Despite concerns over Call of Duty's potential exclusivity around the time of the buyout, however, Microsoft's strategy for Xbox exclusives wouldn't have allowed for the game to be limited to certain platforms anyway - CoD remains one of the highest-grossing media franchises in the world, and the potential profit from making it an Xbox exclusive would be far outweighed by the loss of multi-platform sales. As outlined in Microsoft's strategy regarding exclusives, shown on X (formerly Twitter) by @Ali_Aldahash, the mass appeal of games like Call of Duty and Minecraft makes it more valuable to keep them multi-platform, giving them as wide a reach as possible.

As Microsoft's strategies seem to shift, however, even games that might previously have been regarded as high-value exclusives, like Starfield and the Indiana Jones and the Great Circle, are rumored to be set for eventual multi-platform releases, marking a potential shift in focus — turning away from the flagging consoles and leaning more towards the company's dominance of cloud gaming with Game . A shift in strategy along these lines would likely lead to Microsoft's involvement in the gaming industry becoming much more heavily focused on software than hardware.

Only Time Will Tell Whether The New Strategy Works

However, while the rumored change in strategy might be the best bet for Microsoft's bottom line, it's also likely to stir up controversy, with more devoted participants on the Xbox side of the console war decrying the loss of notable exclusives, some of which might be the only reason to actually purchase an Xbox over a PS5 for prospective customers. The outcry so far has been enough to prompt a post from Phil Spencer on X, which promises a "business update event" at a currently unspecified date within the next week.

It's important to note, though, that in recent years, Xbox exclusives haven't been "exclusive" in the truest sense of the word — while they appear on Xbox consoles like the series X/S, games like Starfield, Halo Infinite, and even Redfall have been playable at launch on PC as well, making them essentially multi-platform titles. Notably, these games aren't even limited to Xbox services on PC, being playable through major platforms like Steam. Moreover, even Sony has been seen taking a similar approach to exclusives, with major titles like Horizon and God of War receiving delayed releases on PC.

While Microsoft's approach to consoles and exclusives left the Xbox in a bad spot, even after the acquisition of several major game development studios, it's hard to predict how exactly the rumored new strategy will pan out. In the most drastic outcome, shifting focus away from exclusives could eventually lead to the death of the Xbox as a physical console, leaving Sony and Nintendo as the two major console developers left in the industry. While it's still too early to say if it's the end for the console, Microsoft's possible new strategy could lead to a very different future for the Xbox brand.

Sources: @Ali_Aldahash/X, @XboxP3/X