Phil Spencer Believes Next-Gen Console Success Will "Not Be A Reflection Of Demand – It’ll Be A Reflection Of Supply"

The executive VP of gaming at Microsoft, Phil Spencer, believes that the next-gen war will “not be a reflection of demand — it’ll be a reflection of supply,” adding that he refuses to declare “a winner and… a loser” between sales of Xbox X/S and PS5.

The exec also believes initial sales of Xbox Series X/S and PS5 won’t reflect their popularity but will simply indicate which company can keep up with demand after launch. In an interview with ShackNews, Spencer says supplies this holiday season will determine which next-gen console outsells the other.

Asked about the delayed launch of Halo Infinite, Spencer says that although he had hoped for a simultaneous release, he has prioritized “the safety and health of the team,” apparently referring to staff burnout. He added that “I think the possibility of Halo Infinite launching beside Xbox was more of a brand and heartfelt moment for us than it was critical to the launch.”

Spencer recognizes that the 2021 holiday season will be challenging given the overwhelming number of preorders, but he hopes that supply will be met early in the next year for new orders. Despite the rush to get the next-gen consoles out, the development process highlighted power and performance, according to the exec.

“We made some compromises in terms of our timeline where we waited longer than some of the competition to lock in our silicon and our plan because we wanted to get the specific platform that we were able to get with Series X, and we did that,” he said.

In terms of COVID-19, Spencer says the pandemic has affected the timelines of games more than consoles, noting that many games intended for release this year have been delayed until 2021. Hardware, however, has also proved challenging since development teams haven’t been on the supply chain since January. He assures consumers that teams have been effectively able to complete the work remotely.

As for those who have already received a preview edition of the Xbox X/S, Spencer says the response has been overwhelmingly positive. He does admit though that he misses launch events where he can interact directly with fans. For fans hoping to get their hands on a console at launch, he recommends that people still maintain safety protocols and social distancing, rather than lining up massively at stores.

Still, in the interview, Spencer seems to be deflecting the crux of the question – which consoles do buyers prefer and why? He also seems to ignore the fact that previous experiences with either console will influence buyers’ choices this time around. Pricing is also a factor. The standard PS5, which includes a 4K-Blu-ray drive, costs $499, while the PS5 Digital Edition is $399. Meanwhile, the Xbox Series X costs $499 while the all-digital Xbox Series S is $299.

As for sales, invoking supply and demand as a gauge for how well a product is doing is a bit simplistic. Global sales of Xbox One consoles reached over 48.34 million units in September 2020, while as of August 2020, sales of Sony’s PS4 had increased to almost 113 million units. There was obviously a clear winner in that generation, so it only stands to reason that sales are a good indicator of success.

According to early data, in the United States, Xbox has had 43.02% online searches compared to the PS5’s 56.98%. Similarly, the UK showed 42.72% for Xbox and 57.28% for PS5. Piers Harding-Rolls of Ampere Analysis claims that by the end of the year, the PS5 will have sold 5 million units, while the Xbox Series X and Xbox Series S will have sold a combined 3.9 million.

Finally, in an unlikely statement from a sales exec, Spencer says, “I just want to keep us in context that the be-all, end-all on the planet is not us selling Xboxes. There are things that are more important than that, both for our teams and our customers, and that’s important for us to keep in mind right now.” That seems like a healthy perspective but are we honestly expected to believe that those are a company’s goals? My guess is not.

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