Xbox Boss Responds to Claims that Gaming Is Microsoft's "Ugly Step-Child"

Announcing two new consoles at E3 would be a "strange lead-in" to spinning off the Xbox brand, Spencer says.

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Earlier this week, research group DFC Intelligence put out a report that called Microsoft's gaming business the "ugly step-child." It wasn't a question of if Microsoft would quit the gaming business, but "when and how," the report said. Now, the man who runs all of Microsoft's gaming efforts has responded.

Responding to questions about the report on Twitter, Phil Spencer said it is a "strange" assertion to think Microsoft is not committed to gaming. Microsoft announced two new consoles at E3 last week, the Xbox One S and Project Scorpio, which demonstrates the company's commitment to the gaming sector.

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This is not the first time Spencer has responded to the Xbox spinoff rumors. In March 2014, after executive Stephen Elop was reportedly planning to consider selling off the Xbox brand if he was appointed CEO of Microsoft, Spencer spoke out to reaffirm the company's commitment to gaming.

"In terms of Microsoft's commitment in the [gaming] space, I know both [Microsoft CEO Satya Nadella] and Stephen Elop, I know them well. I've had explicit conversations with them about Microsoft's commitment to Xbox--they're extremely committed to Xbox," he said at the time.

Before that, in November 2013, Microsoft cofounder Paul Allen's investment group urged Microsoft to consider spinning off the Xbox brand.

MCV reported on the DFC report, which also said Microsoft "effectively killed" the Xbox One S by announcing Project Scorpio. The thinking is, why would you buy that system when you know a more powerful one is coming? DFC noted that Sony was in a similar situation with its more-powerful PS4, codenamed Neo.

The report also said Microsoft faces an uphill battle for console game sales. Under Microsoft's new Play Anywhere initiative, many of its first-party games will be available on both Xbox One and PC.

"So why invest in a console? Just upgrade your PC," the report said."

Spencer did not respond to any of these topics on Twitter, though he did explain at E3 last week why Microsoft announced two new consoles at the show. He said he wanted to be as transparent as possible with consumers and developers alike.

"The reason we announced when we did--one is I wanted to give customers a view into what we were doing," Spencer said at the show. "If they say I have an Xbox One now, I'm thinking about an Xbox One S, I want to be as transparent as I can be so they know they're buying with as much information as I can give them. I can't always give them all the information, but I want to give them this information.

"I want to talk about Scorpio so customers can feel like they have a view into what we were doing so they could make the decision that is right for them."

The Scorpio system is the most powerful console Microsoft has ever made, boasting six teraflops of performance. This comes out to four and half times as powerful as the existing Xbox One, Spencer said. Scorpio won't replace the Xbox One, or the Xbox One S, however, as games and peripherals for those systems will work on all Xbox devices.

Spencer also mentioned that it's not uncommon in the PC gaming world for a company to offer systems with different specs, something Microsoft appears to be following with its new console efforts.

"There's a logical question of, 'Hey, Phil, why would you ever announce two consoles at one show?' Why didn't you wait [and announce Scorpio later]? Clearly, other people made a decision to wait," he said, referencing Sony's decision not to show PlayStation Neo at E3. "Supporting multiple spec is something that the PC world has done for a long time; you've got minimum spec, recommended spec, unbounded spec."

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