Xbox Scarlett At E3 2019: Phil Spencer Talks Disc Drives, Future Generations, And More

"I actually never really need that customer to go buy a new piece of hardware."

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Now Playing: New Xbox At E3: Everything We Learned About Scarlett

Microsoft finally announced its next-generation console platform, Project Scarlett, at E3 2019. We know it's coming in Holiday 2020 with Halo Infinite as a launch title, but there are still a lot of unanswered questions about the console and the wider thinking behind it. Xbox boss Phil Spencer sat down with Ian Sherr of GameSpot sister site CNET where he shared new insights on the upcoming platform.

Starting off, Spencer confirmed that Project Scarlett will have a disc drive. He explained that it was important for Microsoft to respect the physical purchases--of games and media--that people made in the past. "What we know is physical media for many people is still where their library is," he said. "We're obviously leaning into the compatibility across all of our generations in a big way."

The only reason this is news is because Microsoft is experimenting with an all-digital Xbox One S model that features no disc drive. Some people naturally wondered about if the new Project Scarlett will have a disc drive, and now it's confirmed that it does. It's also confirmed that the PlayStation 5 will have a disc drive.

It is undeniable that digital is taking up a bigger and bigger share of the games industry. So for those who no longer use physical media, the all-digital Xbox One S--with its lower price point thanks to its lack of a disc drive--may be an attractive option.

Moving on, Spencer responded to whether or not he thinks the Project Scarlett will be the final console from Microsoft. "Honestly, I don't know. I've been around long enough to know that there have been multiple 'this is the last generation.' That's not a new meme that comes out," he said.

Spencer pointed out that, despite the rise of streaming in music, film, and TV, that hasn't slowed down the acceleration of physical hardware. "The number of compute devices around us hasn't gone down; it's gone up," he said.

"Different people will say different things on this, but the truth of the matter is that the best way for you to play a high-fidelity video game for years is going to be with a local device," he said.

Also in the interview, Spencer said Microsoft hasn't finalized a price for Project Scarlett as of yet. He said there is "still stuff we work through and cogs and everything else" before Microsoft announces a price point.

Spencer also spoke about how Microsoft doesn't necessarily need you to buy Project Scarlett. The real money is made in software and services, Spencer pointed out. So if you're already invested in the Xbox ecosystem, say if you already own any of the Xbox One family of consoles, Microsoft isn't overly concerned about if you upgrade to Scarlett.

"I actually never really need that customer [who already owns an Xbox One] to go buy a new piece of hardware," he said. "The business is around software and service growth. That is the profitable part of the business; selling the hardware is not the profitable part of the business."

Microsoft already has Xbox Live, which generates millions of dollars on a regular basis for Microsoft thanks to its monthly subscription price. The company also has Xbox Game Pass, another subscription service that gives players access to a growing catalog of games. This service recently came to PC, while an Ultimate version that gets you Xbox Live Gold and Game Pass was also recently introduced.

"This is a little bit why we've backed away from the race on how many we can sell or announce the the sales of as many consoles as possible," Spencer said. "Not that that's immaterial; I'm not at all trying to say that. But the real root of the business is how many customers are engaged in your service. How engaged are they? And can you keep that number growing?"

It's been reported that Project Scarlett is the name of Microsoft's next-generation console strategy, instead of a single console. The system Microsoft talked about at E3 is reportedly the high-end model, codenamed Anaconda, while a lower-spec version, Lockhart, is supposedly also in the works. However, Spencer doesn't touch on this speculation in the interview.

Go to CNET to read the full review.

More E3 news:

Got a news tip or want to contact us directly? Email news@gamespot.com

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Avatar image for Flyin3lvl
Flyin3lvl

"I actually never really need that customer to go buy a new piece of hardware."

well, ok then. i wont :D

Avatar image for papragu
papragu

Microsoft like:
This is the last windows we make, this is the last console we make. These f*ckers know something we don't? Will technology just stop evolving? Wolrd be taken over by machines? Are we all going to die? XD

Avatar image for onehitta323
onehitta323

Absolutely no reason to buy an x flop. The limited games they do have will be on pc anyway. Looks like Sony and Nintendo destroyed them. Microsoft can't compete anymore. I will get Gears 5 on pc but that's about it. Halo is already dead. Nothing else to even get excited about. RIP Xbox.

Avatar image for xiricon
Xiricon

@onehitta323: can you point out where the bad Xbox touched you? Everything is going to be OK, help is available.

Kids help line: 1-800-668-6868

Suicide prevention lifeline: 1-800-273-TALK

Avatar image for onehitta323
onehitta323

@xiricon: When you don't have facts or logic, just resort to insults. Typical fanboy.

Avatar image for bentleyj10
bentleyj10

@onehitta323: lol wow...pot calling the kettle black here. Look at your childish and evasivly insulting tone with no facts.

X flop, Microsoft can't compete anymore, Halo is dead, nothing to be excited about...and below this post...

Gamepass is mostly bargain bin titles, Forza the COD of racers, not everyone is in to racing games, State of boredom...everyone knows you're one of the trolliest fanboys around lol. Refuting all your slander would take too much time. What I've posted already has. Good day bizzle.

Avatar image for onehitta323
onehitta323

@bentleyj10: Yawn, must have struck a nerve with you as well.

Avatar image for bentleyj10
bentleyj10

@onehitta323: why do you say that I'm not mad or bothered. Just calling out your hypocrisy.

Avatar image for onehitta323
onehitta323

@bentleyj10: Easily triggered by my OG comment. Game over for you, just like the Xbox.

Avatar image for bentleyj10
bentleyj10

@onehitta323: dumb...I don't come here every day and when I do, I see I have notifications and reply to them. Don't kidd yourself kid.

Avatar image for xiricon
Xiricon

@onehitta323: You’re a coward, you spew garbage and then act all dismissive when you’re called out on your behaviour. Try not to cry yourself to sleep tonight, beta male.

Avatar image for onehitta323
onehitta323

@xiricon: more insults by you instead of using logic to counter me. Aaahhhh yes, easily defeated. Can't defend Microsoft this time huh?

Avatar image for xiricon
Xiricon

@onehitta323: You have proven that you are not above insulting, I’m not surprised it bothers you so bad as it is obvious you have been traumatized by it.

You’re confused that I’m defending Microsoft when I’m actually poking at your obsession of hate towards Microsoft. I can trash Microsoft too, but the way you devote so much time to it, that is the joke. Stop stereotyping yourself, or continue and expect more of this. Go ahead, entertain me some more puppet, it is enjoyable for me, I envision you nasally saying “easily defeated”, while trying not to have a breakdown. “ahhhhHHa pff slhlurp”. LOL 😂

https://memegenerator.net/instance/84597416/neckbeard-wrestling-fan-aaahhhh-yes-easily-defeated-onehitta323

Avatar image for xiricon
Xiricon

@onehitta323: I’m not a fanboy of anything, I’m just tired of your useless campaign of shitting on things you don’t like with a cult like mindset. You hate Xbox, we all get it, don’t devote so much futile time into convincing others or maybe you do need help.

Avatar image for onehitta323
onehitta323

@xiricon: Aawwwww poor fanboy. Guess I hit a nerve.

Avatar image for xiricon
Xiricon

@onehitta323: you’re not impressing me at all, you can do better. I was expecting an intellectual response but you keep striking out. Maybe I over estimated you, evidence does indicate that I shouldn’t have lapsed in that judgment but I do try to give the benefit of the doubt.

Avatar image for bentleyj10
bentleyj10

@xiricon: yeah this guy is a lost cause. It's been his MO as long as I can remember. This site has really died too, I still visit it for a different take on things but man the content and community has really fallen off.

Avatar image for xiricon
Xiricon

@bentleyj10: Yeah the moderators are a joke. This invalid should've been banned long ago. I also noticed the hypocrisy in his response, but omitted it from my reply as he tends to just pick out a single thought and ignores the rest of any points you make. Glad you called him on it.

I was really looking forward to seize the opportunity to shut down this troll, but looks like he has already given up. Still some hope he will reply, or maybe I'll get banned before then lol...

Avatar image for consolehaven
ConsoleHaven

@onehitta323: I personally loved my xbox one and love my xbox one x. I played a lot more on PS4 in truth, but I'm happy to have bought both consoles and gamepass right now is frankly amazing. MS is betting huge on first party software next gen and we'll see what happens. Just giving a flip side of the coin as your sentiment is legitimate.

Avatar image for onehitta323
onehitta323

@consolehaven: Why do you think gamepass is amazing? That is fine that you think that but I'm just curious. PlayStation Now has over 850+ games compared to gamepass which has 100. You can download or stream them. Most of the games on gamepass are bargain bin titles that people have no interest in. Also PlayStation Now you can get a whole year for $70. That's under $6 per month. That's cheap.

Avatar image for consolehaven
ConsoleHaven

@onehitta323: Gamepass has over 250 games. Microsoft's first party titles are available through the service on launch day and there are several high profile 3rd party games that are available for download within the year that they launch. As far as Playstation Now is concerned, I dabbled a long time ago but didn't use it much. Just went through for fun to better respond to your comment, though. PS Now has a great list of games and I can't deny it's appeal. Which is why I'm happy to own both consoles. In terms of current gen content I feel like gamepass has a little more to offer. It's all about preference. It's hard to recommend one console over the other depending on what people are looking for in gaming. PS4 still has an edge if we're being objective BUT most people have agreed and bought one already. SO, as it stands, there might be some stragglers who're wondering if now is a good time to buy an Xbox One and to those people I would say yes.

Avatar image for Flyin3lvl
Flyin3lvl

@consolehaven: as it stands, there might be some stragglers who're wondering if now is a good time to buy an Xbox One

best whole comment but stood out part.

Avatar image for onehitta323
onehitta323

@consolehaven: you're right about 250 games on Gamepass. My mistake. I respect your response even though I disagree with you about buying an xbox one at this point.

Avatar image for redviperofdorne
redviperofdorne

@onehitta323:
I would disagree. The new console, which I agree probably isn't really needed, is going to launch with Halo 6. If the price is reasonable (400-450) then you are gonna get a decent amount of people to upgrade. Fable is deep in development. Gears 5 is out in September. Ori 2 is coming out, the original sold over 2 million copies. Cuphead was a huge success and sold 2 million. State of Decay 2 did fairly well despite being a Game Pass game (over 500k in sales, 2-3 million players thanks to game pass). Forza is a consistent hit. Plus they bought a ton of new game studios to make exclusives for them.

They're making all the right moves. A heck of a lot more than they did when the One originally came out.

Avatar image for onehitta323
onehitta323

@redviperofdorne: Wrong. All those games you listed are on pc as well. Like I said, no reason to buy scarlett at all. Even if they were exclusive, they're not gonna sell a console anyway. Bunch of indie games LOL. State of Decay was an epic failure. State of Boredom. Forza is just the call of duty of racers. Same game with an annual release. Yawn. Not everyone is even into racing games either. Pretty sad list if you gotta include State of Decay on your "why you should buy an xbox list" LOL.

Avatar image for redviperofdorne
redviperofdorne

@onehitta323: You said Xbox has nothing to offer. I am giving you a list of games it has to offer, Successful games too. Even if some of them are on PC, They're still Microsoft games. State of Decay sold over 2 million copies (not including the Xbox One remaster sales). State of Decay 2 has sold over a million copies in the first two days of launch, I originally thought it was just 500k total but I looked it up again to be sure. And to say no one is into racing games is ignorant and false. Forza, as a franchise, crossed a billion dollars in sales years ago. The recently release already sold 2 million copies and hit 7 million players thanks to Game Pass.

Avatar image for robertbyronz
robertbyronz

@redviperofdorne: all good points. microsoft has exclusives because guess what... they own Windows. Sony doesn’t have an operating system like Microsoft does. if they did you can bet they’d sell their games there too. it’s about business. Selling games. not about being dead or last. Microsoft selling their games on PC is actually a benefit. Play Anywhere. When i sold my One S to help pay for the One X i have now, i went awhile with out an Xbox. During this time i played Forza Horizon 3 on my PC. when i got my One X and installed Forza 3, my progress carried over. You can’t do that on Playstation. That’s the benefit of Play Anywhere and having an Xbox.... options. play your way.

Avatar image for onehitta323
onehitta323

@redviperofdorne: ok so you twisted my words around and said things that I didn't even say. You also have no clue that all the games you mentioned are also on PC which was the whole point of my comment to begin with. Read what I said again. Not even gonna bother breaking this down. Have a nice day.

Avatar image for redviperofdorne
redviperofdorne

@onehitta323: They can't compete, Their limited games will be on PC and there is nothing to be excited about. Those were your exact words. Sales are sales, Microsoft owns Windows which is PC so it still is very much exclusive. And I just gave you a list of non-console pushers, again your words, that have sold millions of copies. You're just being a troll without a leg to stand on so you resort to trolling since you can't back up your argument.

Avatar image for onehitta323
onehitta323

@redviperofdorne: I guess I have to break it down for you since you have trouble with reading comprehension. I said there is no reason to buy a Scarlett. Yes they can't compete, hence the reason why they're going with a whole different strategy LOL. There are no exclusives because you can just play it on PC if you want the game. Microsoft just shot themselves in the foot as far as the scarlett goes. You didn't even know that the mediocre games you listed earlier was on the PC as well LOL. Those aren't console sellers. The only reason some people bought them is by default. State of Boredom was a complete failure and nobody liked it. There was nothing else releasing or to play on xbox anyways. Just because a game sells a million does not mean the game is good. There's plenty of examples of that. Like I said, NO REASON to even own a scarlett. Sony and Nintendo destroyed them. Xbox done.

Avatar image for Tekarukite
Tekarukite

I love how humble he is. It's a great strategy - and it will be backed up by yet another very powerful console. I love how much freedom this gives gamers!

Avatar image for siarhei
siarhei

Good philosophy.

Worked like a charm for Apple.

Meanwhile Sony completely lost the phone market.

It's all about ecosystem. PC, Xbox, who cares.

As long as they get your money it doesn't matter.

Avatar image for pmanden
pmanden

@siarhei: As long as Microsoft offers a traditional console with traditional psysical games, they will also get my money. Same goes for Sony.

Avatar image for siarhei
siarhei

@pmanden: same here. But only because I don't game on PC. But then again it doesn't really matter to MS.

Avatar image for badhac
badhac

I'll be buying one and already have Game Pass. Looking forward to what Xbox has in the pipeline.

Avatar image for silv3rst0rm
silv3rst0rm

I'm not quite sure what that "Scarlet Project" is.

They're talking about a new "Generation" but somehow they seem to make us think it'll be running the same games?

Have the "Console generations" ended and now consoles will just be like pocket sized gaming PCs?

Will the dev release their games and consoles will handle them the best way their hardware can?

Let's say Forza 8 gets released when "Scarlett" is on the market.

Will it be so that the "optimal" console to run it will be "Scarlett" but still runs on Xbox one X in a "so-so" way and it will be garbage on "Xbox one / S"?

Will the console "generations" fade away instead of suffering a headshot kill when the next one releases?

They say the Xbox One controllers and all will work with Scarlett, so... Will there be an option to buy the console as a standalone? No controller included?

Will consoles become PCs we "Upgrade" every 3 years to get to play the same game libraries to "enhance" the gaming experience?

I really feel we'll be shopping consoles the way we're shopping PCs...

Avatar image for PrpleTrtleBuBum
PrpleTrtleBuBum

@silv3rst0rm: Headshots haven't happened in long time. PS2 got games until about 2010. X360 still got games at least couple years ago.

They will make weaker versions of games for X1 until game devs decide they really can't make the game work on old gen anymore, or when almost everyone have the new device. Cloud will enhance that but right now its just marketing mumbo and probably cloud tech will age too. Facebooks etc force you to get new devices for the apps and stuff even though the basics could easily run on Pentium III or something.

Avatar image for jsprunk
JSprunk

I bought an XboneS a few months ago so I could have Hulu Live on my main TV in my living room. I see now that it would've been a wiser choice to spend my money on upgrading to a smart TV, since buying the XboneS was a huge waste of money, especially with zero exclusives to play on the system.

Other than that, Phil Spencer has proven himself once again to be a dishonest buffoon and should be replaced with someone competent.

Avatar image for Tekarukite
Tekarukite

@jsprunk: how do you even connect those statements with any logic??

Avatar image for jsprunk
JSprunk

@Tekarukite: How do I connect two completely separate statements together with any logic? Not sure if you’re being sarcastic or just low IQ.

I’ll summarize the three sentences that I wrote since they were obviously TL:DR for you and you can figure out the rest.

1.) XboneS was a waste of money

2.) Smart TV would’ve been better

3.) Phil Spencer sucks

Avatar image for spartanx169x
spartanx169x

@jsprunk: I’m sorry but you are misinformed. Your assessment is wrong about the Xbox S being a waste of money. This is why. Your xboxS is a secure closed system device. While smart TVs have all kinds of vulnerabilities in them. They (TVs) are not built with security in mind. Any app on the Xbox will be secure. I can assure you the apps on a smart TV are not.

Avatar image for jsprunk
JSprunk

@spartanx169x: I guess. I’m sure the XboneS is marginally more secure, but I don’t exactly see a huge wave of people complaining about their TVs being hacked. It just turned to be a really expensive Roku imo.

Avatar image for Atzenkiller
Atzenkiller

So how exactly is he going to sell software to people who haven't bought the next Xbox once the current one is dead? At the end of the PS3's life cycle I could buy AAA games on sale for 10 bucks. Not quite the same as buying a new game for 70 bucks, so I'm not sure what profits he wants to rely on.

But at least they're not trying to hide the fact that their online subscription service is all about milking their playerbase. No more bullshit talk about "needing to cover the costs for servers and infrastructure and whatever".

Avatar image for Moonio79
Moonio79

@Atzenkiller: by having Xbox games playable on any device via xCloud. I'm assuming you didn't read the article as he said that the profit is in the software. The ultimate Gamepass will be doing gangbusters by the time Halo Infinite comes out, with no massive overheads for hardware manufacture. Keep up.

Avatar image for Atzenkiller
Atzenkiller

@Moonio79: I must have overread the part where he mentioned that everyone's going to play their games on streaming services soon. Cause I don't see that happening too soon, nor do I see how a decently priced streaming service for maybe $10 per month could generate anything close to what MS is making now by selling games for $60. $10 per month equals $120 per year, which is the price of 2 full price games. They'd have to charge a lot more than that to make it worthwhile, like $20 per month at least, if they were to offer all the newest games on it at launch, just to make up for all the money lost from traditional game sales.

And as far as I'm aware this gen consoles have been profitable again, unlike how it was with the PS3. So what would they gain by not releasing their own console that forces you to use their online store, their online subscription service, etc.? Being a console manufacturer has always been a very profitable business and it still is. If there were no Xbox, then MS' streaming service would also be worth shit because you could play anything on any other streaming service, like Google's, just as well.

Avatar image for spartanx169x
spartanx169x

@Atzenkiller: how you ask? Streaming. This will be a good choice for slow adopters and for people that only buy one or two games a year.

Avatar image for Atzenkiller
Atzenkiller

@spartanx169x: Because those people make up a majority of their profits, huh? Not the guys that buy a new game every month, paying extra for any special super turd editions and dlc, etc. Sure, a streaming service that costs a few bucks per month and lets you play all games as soon as they get released, including all dlcs, could totally compete with that. Maybe in the distant future, but no, I actually don't see how this could ever happen. The differences in potential profits are just way too big. Which is why I'm still wondering why they all want to go through with it. As an additional income source for those who don't wanna buy a console? Sure. But there's just no way how it could replace their core business, unless they ramp up the prices to something like $60 per month. Which they most definitely would if cloud gaming really were to take off.

Avatar image for spartanx169x
spartanx169x

@Atzenkiller: Streaming at this point is not really about profits, but more about being first to the market. Over time that library of games will grow to be huge. The bigger it grows the more attractive it will become. Also, it give them time to perfect it. MS has dropped the ball a few times by not being more proactive in going after tech. It also appears that they consider Google to be a serious threat. I still have serious doubts about the issue of latency. But over time I think it will get better and better. I also like knowing that option will be there. Nobody took Netflix seriously until they became huge. Time will tell.

Avatar image for Vodoo
Vodoo

That hack from Cnet? He's a lying, misleading, disrespectful, and ignorant fool that THINKS he knows something about the game's industry. In reality he's a clown, dressed up as an informative source.

He bashed YouTubers that report on anti-consumer practices towards us and tried to get a bunch of them demonitized. He's the one riding on the coat tails of his website's noteriety, where YouTubers have to earn their subs. And he goes and calls their advertisers to leave? Real respectable guy!

After his despicable "blog," I won't even look at Cnet for as much as a tv review anymore.

Gamespot is the only mainstream game site I visit anymore because most other sites have started to go off on wild tangents about games. I want to hear about game news, not how niche communities (in the gaming world) are under represented in every game, every day.

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