Things have been topsy-turvy in North America for the last six months as the new console generation got underway, and serious changes took place at both an executive and market level. The big surprise was that Microsoft, once the undisputed leader of the North American market with the Xbox 360 and its emphasis on online first person shooters, took a backseat to Sony and its PlayStation 4. The reasons for that are, in hindsight, pretty obvious. A less powerful machine for $100 more with an emphasis on general home entertainment, rather than gaming, was never going to be a big hit with early adopters. Now both Sony and Microsoft are experiencing changes in leadership. Jack Tretton of Sony Computer Entertainment America has been replaced with Shawn Leydan, who comes from Sony’s Network Entertainment unit. Meanwhile Don Mattrick, who debuted a “For everyone else” Xbox One last year to thunderous objection, has now been officially succeeded by Phil Spencer, former head of Microsoft Game Studios. Layden comes to Sony just as the company prepares online initiatives like PlayStation Now and expanding its Sony Entertainment Network. Microsoft, on the other hand, brings Phil Spencer on the eve of their latest 180; taking the focus away from casuals “and everyone else” and concentrating on the core gamers that they lost to Sony during the launch of the newest consoles.
In other words, the new heads of these respective divisions represent the new directions these companies would like to take their hardware.
In the case of Phil Spencer, this is probably the smartest thing Microsoft could have done. Like Sony before them, during the early PS3 era, Microsoft swaggered into the next generation assuming that their position in the industry was locked down, and nothing could challenge their supremacy. Therefore, they could do whatever they liked, and their audience—one they assumed was mindlessly loyal—would lovingly embrace whatever was given to them. And, as with Sony, this has not turned out to be the case and the market responded by buying into the competitor that appeared to be catering more closely to their needs. Microsoft lost a lot of gamers when the gamers themselves believed Microsoft had abandoned them for the casual audience.
Phil Spencer now has the chance to turn things around. Obviously, since he comes from the game studios division, his own focus is on the gamers, and the products they consume. There’s a perception that even if Don Mattrick and former Microsoft CEO Steve Ballmer didn’t care about gamer, Spencer was probably excited over a new Halo or Fable game. After all, it was his job to ensure that the Xbox 360 had games that people wanted to play. He oversaw what would become the 360’s dominance in the USA as people associated the 360 with the “shooter box,” the machine people used to play Call of Duty and other first person games.
If Microsoft wants to regain that leadership in North America, it’s going to have to become the “shooter box” again with the Xbox One. That’s the association people make with the hardware. Titanfall is definitely one step in that direction, but if Microsoft is serious, they’re going to need to exploit the legacies of Halo and Gears of War as well. And of course, it’s in their best interests to get friendly with Activision again, since Call of Duty is the game most people play. That relationship is probably not as close as in the past, thanks to the exclusive deal Microsoft struck with Activision’s competitor EA (for Titanfall exclusivity) but it’s essential that Microsoft repair whatever damage there may be. When tens of millions of Americans think of the Xbox 360, they think of Call of Duty. Phil Spencer needs to do whatever he can to make sure that association continues with the Xbox One. And if anyone at Microsoft has the credibility to do it, it’s him.