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

It's too bad MS needs to keep responding to the Smear Campaign but Phil does it well.

The Story.

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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.

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.

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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Also, MS and Phil on the other hand have been so damn classy....

Xbox Head Praises New Zelda, NX

"Zelda looked good at E3."

http://www.gamespot.com/articles/xbox-head-praises-new-zelda-nx/1100-6441172/

I mean, he's right. At this point it's pretty clear that no matter what Microsoft and Xbox do, those who want them to leave the market will manage to spin it into something negative regardless.

You know what is even stranger Phil? Making sure your brand new Xbox S will be DOA by announing a new, better, stronger console is coming out in a year or so. Way to waste money bro :P

/s <- due to popular demand.

Anyone who a decent brain knew this already. Why would you release a new console in August and another more powerful xbox holiday 2017 if you wanted out of the console business? Personally, i think Scorpio has got the Playstation crowd upset and they are grasping for something to hold on to.

Not at all- did the announcement of the 3DS kill DSi XL sales? It did not (the DSi XL as a matter of fact is the second highest selling DS model). Microsoft has a good enough lineup this year that those who want to play it have the option to spend (less) money to get an Xbox and play those games. Those who don't particularly think the lineup is appealing have the option to wait for the Scorpio and play those games then- but those people who would wait are, by and large, people who would not have bought the Xbox right now anyway.

The Scorpio announcement has everyone flipping out. Announcing the most powerful console in all of human history will do that. I didn't think that there would be reactions like this though. And as odd as it sounds, the S model is already selling preorders. So its not the end of Xbox like predicted.

@Desmonic:

I dunno bout that. I think it's clear they're trying to cater to different audiences with different levels of income. The X1, X1s is the entry level and the Scorpio for those with the cash and like the higher end of Video gaming and what comes with it.

@charizard1605: Two things:

1) Handhelds =/= Home consoles (+MS=/=Nintendo);

2) Didn't really think I needed the /s, but /s :P

Thats the spin the media is doing to downplay. And Playstation fans are following their lead.

How the hell is the xbox slim redundant when it has the cheapest 4K HDR bluray player on the market? Its only june 2016. The console is not out for another 18months!

And xbox one is out three years already. By the time the Scorpio release it will be 5 years.

And Phil Spencer already said all your xbox one games and xbox one accessories will carry over you lose nothing! And he said all games made for Scorpio will be playable on the xbox one at launch.

The bias against xbox is unreal. 299 dollar system that that likely play exclusives for another 3 to 4 years? Are people upset about it really is this just people not thinking it through properly?

Don't you just love Spinner Spencer, worse than Don imo.

That seems extremely utopical to be honest.

Considering most exclusives (the reason people with cash buy all systems, or most of them at least) will be Win10 compatible in the end, why exactly would someone with cash (and just to be clear, I'm assuming someone who isn't afraid to spend money on decent hardware, aka PC, to get what they want) go for the Scorpio vs a new graphics card or something of the sort? I'm sure there is a market for the Scorpio, but given some of the factors already announced it does not seem as big as it otherwise could be.

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In any case, my "point" was a joke dudes. Calm down bros :P Clearly if someone is confortable with launching two systems (even if in a way that I have serious doubts will work well) they are not looking to exit the damn market anytime soon lol

This^

SMH mang... Like I am many others seem to need to restate over & over to that line of thinking. Because millions & millions just like myself are console gamers that want to game on console, Sheeesh, well that and we would'nt hit a dog in da azz with PC gaming.

And yes, that last part is me joking. Don't jump down my throat. :P

Sarcasm or stupidity???

This was pretty obvious. Microsoft just revamped DirectX and announced 2 new consoles. And PC gaming is only growing, afterall, and will keep me on the Windows platform indefinitely. Also, with so much potential to gain market share in the phone arena and mobile gaming market through PC gaming, it's clear to me atleast that the analyst making these claims did not know nearly enough about Microsoft in general. I'm fully expecting Microsoft to muscle their way into the mobile market by including the DirectX API in their Windows 10 mobile platform. Hopefully, they're already working on ensuring that there are DX compatible drivers ready for Surface phones when they hit the market. Imagine the millions of PC gamers that will flock to Windows phones just because they can play PC games on them...

Well with the PS4 being the current gen 8 world's most powerful video game console, I dont think MS is going anywhere either. They have to save face from being embarrassed at reveal and try to turn around the tarnishing of the Xbox brand.

I would love to hear your reasoning as to why. Phil may come across as a goober, but things are getting done as they should. The XBox Scorpio is more powerful than the Playstation Neo, as it should be, and they're working with Oculus Rift to ensure that VR is available for the Scorpio when it launches.

I know there might already be an 'inb4' but, seriously, what do you expect the head of Xbox to say in response to this?
"Yeah we just announced two new consoles SKUs, but sure after that we'll definitely be packing up shop!"

I think the article is more alluding to the atmosphere around MS towards the Xbox division when Scorpio & the S class likely under perform like the Xbone has.

@charizard1605: From a business standpoint they could just be trying to inflate the value of the Xbox brand before selling it off. If they sold it now with how the One is performing now it would be dirt cheap. If Scorpio and S are successful they could get more for it.

Just a thought

@Star67:

From a business standpoint they could just be trying to inflate the value of the Wii brand before selling it off. If they sold it now with how the U is performing now it would be dirt cheap. If NX is successful they could get more for it.

Just a thought

Couldn't resist, just sayin. :P

And PS5 will launch in 2018/2019, then we are back into "the Xbox is a weak piece of shit". Sorry, complete knee jerk reaction from MS, a strong piece of HW at a expensive price in 2017. Complete waste of time, as much as i like the 360, the Xbox is just a pointless product on a Global scale.

It's not impossible - and the recent announcements position MS to pivot out of gaming with the right circumstances. They're in a similar situation as Disney when they scrapped Infinity: even if it's popular at the market, it's not worth the time and attention for the profit it generates, not when other business activities are far more lucrative.

I take Spencer at his word but the decision to spin-off Xbox is not in his control. And based on MS' push to unify Xbox and Windows, it sounds like the heads at MS are exerting authority over Xbox more than ever before.

But MS won't sell off Xbox until they admit defeat to Steam and partner with them. If their actions don't reflect the attitude that Steam harms UWP and Xbox, the sell off rumors will persist.

@SecretPolice: XD

Nintendo doesn't have to do anything. If they ever wanted to sell Disney would be all over them for Billions.

@Basinboy:

Eh, this is all wishful thinking by life long MS/Xbox anti fans; MS been goona spin off Xbox about as long as Sony's been doomed and Nintendo going third party. . :P

If you flush logic and embrace wishful thinking MS is definitely making moves to sell the Xbox brand.

@Star67:

MS doesn't have to do anything, they're making billions plus all the XBLG $$$$$$$$$ Xbox brings in that would be lost if they spin off Xbox and just went PC is just mooaar icing on an already tasty cake. :P

For me, what happened at E3, it was more a sign that they are committed to the gaming business. They showed a great lineup of games and Horizon 3 announcement did not disappoint as the game seems to be doing much more than Horizon 2. The 2 new console announcements, customize your own controller, etc....they are just giving more options on the hardware space as well.

@Random_Matt: I doubt we see PS5 and Xbox 2 till 2020 if not 2021. Sony needs to make money back on PSVR before they move on to R&D for a brand new console.

I don't see them leaving gaming, but I can see them leaving the hardware scene. Xbox could be like Steamboxes, where 3rd party companies would make the XBox consoles. Not saying it would happen, but I could see it happening in the future if their consoles aren't profitable for them to continue to make. With Windows 10, they have the perfect formula for that to happen. Personally, I don't want MS, Sony, or Nintendo to leave gaming. They all brig something a little different imo.

Another day and more cow hate.

The Xbox S isn't doa contrary to popular cow wishful thinking sentiment.

Everyone won't want to spend the extra money on Scorpio. People without 4K Tvs won't really see a benefit.

Xbox S launches in August Scorpio isn't coming til 1.5+ years from now. There are plenty of people that potentially could be in the market to buy an Xbox and with the new games coming the new S makes it more attractive especially since it's a 4K player going into the holiday season.

The S is part of their reboot strategy which leads into Scorpio. Cows love to whine and complain about how the Xbox One looked well the S changes that.

I don't really see how this is any different than when slim versions of the last gen consoles were launched. People weren't whining then so what makes it so bad now?

Ive learned to take anything Phil says with a grain of salt. I'll take the wait and see approach with this one.

Don't be daft, the cows on SW know better then everyone else in the gaming world and because they have said it, it WILL happen.

The media loves these catchy headlines,XBOX getting out console business EXTRA EXTRA read all about it.

I almost feel physically ill reading these kinds of bait articles it just needs to stop.

Gen 8 ?

You mean the shortest gen known to men ?

I like the idea of Scorpio, but I think its going to hurt the Xbox S sales a lot. Microsoft will lose another few billion on R&D of a 4k console. It will likely be sold at a significant loss (like the launch PS3), and may have very few buyers....even if it turns out to be a great machine. Microsoft doesn't mind blowing it money, it seems. They throw billions at companies and products that never turn them a profit, like Skype, Nokia, and now $26 billion for LinkedIn. I thought Satya Nadella was going to stop these "Ballmer-like" purchases.

So true...I don't understand why these big corporations don't come to forums like these to find the next CEO or heads of their gaming divisions. Unstoppable

it will end up being longer than 5 years. Both New/Scorpio are still gen 8 machines as game disks will work between launch consoles and these updates,

And what exactly has Phil said in the past that turned out to be false? He's more trust worthy and forthcoming that anyone has ever been with Sony.

Bubb but teh negative

@SecretPolice: I presumed as much from TC, but I try to contribute to generate actual conversation and food for thought.

Personally, there's a distinct chance it could happen if the UWP push falls apart. I'm still trying to grasp why developers and publishers are better off giving a chunk of revenue to Xbox instead of partnering with Steam or distributing on their own (via Origin or Uplay). And MS' own statements make it difficult to express confidence that Xbox can transition into the PC space if they aren't going in with the purpose of waging war on Steam. And I am doubtful that any PC gamer is going to be attracted to the Xbox ecosystem if they have to pay for XBL and the games are built with a console audience in mind. And I still have yet to see anything from MS that indicates they are ready and willing to give that up.

I wait for the Scorpio 1.5 announcement

Sounds like a bunch of excuses for the end of gen 8 :P

PS4 can have it's crown. What a patheticly short gen ^^

They might not be leaving the hardware market anytime soon but they sure don't have the games to support their hardware. How can such a rich company like MS only manage to put out low budget trash like Recore? Yet according to lems Sony will go bankrupt yet they have too many big budget exclusives to count including goddamn Spiderman.

They are not leaving the game business and it's stupid to think they would invest all that money into the S and into the most powerful game console ever made, to just exit. People are not smart.

@NathanDrakeSwag: low budget trash is the stuff you usually post not ReCore.

The majority of games played on console are multiplats anyway. Using your same dumb logic how did the ps4 manage to sell huge numbers of units when the first two years almost all they had was multiplats marketed as first party games and indies?

Even their president was asking why the fans don't like indies .

@kingtito: naw, he hasn't. But I'm not getting into it.

Many people prefer consoles over PC, so there is definitely a market for the XBox. I understand what you're saying, though. With consoles essentially using low budget PC parts now, proprietary software is just about the only thing that sets them apart from personal computers. And, in that respect, Microsoft is blurring the lines between PC, XBox, tablets, and phones. But, consoles are also much simpler to use and maintain, which is what many people prefer about them. They do cost more in the long run, mainly due to the price of games and online, but they have their advantages, too.

That being said, the XBox did ultimately lead to policies that damaged Microsoft in the PC gaming market, but the blame should be placed on mismanagement and poor decision making. For instance, the attempt to charge PC gamers a fee to play GFWL games online was a terrible decision, especially with Steam already dominating the market. They should have known that PC gamers would turn against GFWL if they tried a stunt like that. Hell, it took the threat of linux becoming a full blown gaming OS, among other things, for the stubborn, older crowd at MS to pull their fingers out of their ears and fix Windows 8. People did not want the Metro interface on their desktop computers, they did not want to lose their taskbar and start menu, but Microsoft execs tried to force the unwanted changes on everyone anyway. This, along with their many bad decisions in the tablet and phone markets, lost them quite a bit of market share. They can get much of it back if they play their cards right, though.

And, terrible decision making didn't just harm the PC sector, as I'm sure you noticed. The momentum from the XBox 360 was nearly obliterated by Don Mattrick and crew. They made short sighted decisions for quick money that cost them big in the long run. The 360's Kinect did bring a quick cash injection from the casual crowd, but they betrayed the massive pool of loyal XBox fans that took many years and a ton of cash to gain the trust of. There were absolutely no quality exclusives to speak of once the Kinect was released. Putting every developer resource into Kinect was a terrible move. Without a VR headset, the thing was nearly useless for gaming, as turning your body meant that you could no longer see the tv. By the end of last gen, the PS3 not only caught up to, but surpassed the number of XBox 360's sold.

Then, there were the countless disasters of the XBox One. I swear that the only purpose for the laggy, unusable HDMI input was for their stupid joke about people playing the PS4 on their XBox One. The input lag is far too terrible for even just that, though. The HDMI input is utterly useless. And, aside from the fact that nobody wants a creepy camera in their children's bedroom while their kids are changing clothes, the shortcomings of Kinect for gaming on the 360 were not even addressed. I was expecting a new type of 3D VR technology out of the gate to make the thing usable for gaming, but any reason was lost in the sea of bureaucracy. And, speaking of games out of the gate, the XBox One launched without a single decent shooter, which was a terrible, terrible move. The PS4 had Killzone and Call of Duty running at 1080p/60fps. The XBox One had vastly inferior versions of multiplat shooters, and that was it. It did have a nice variety of game types, but that's not what people wanted. The XBox has always been a console for shooters first and foremost.

And, I won't even get into the always online DRM fiasco, with Don Mattrick telling those without internet, such as people in the military, to stick with the XBox 360. That was just terrible. Hell, the XBox One wasn't even equipped to be an online console for digital game downloads. The 500GB harddrive size was laughable for such a purpose, just as much of the hardware was, and would have been far too insufficient for digital distribution. Game downloads are well over 50GB a piece these days. And, the damn harddrive wasn't even upgradeable. The entire console, from concept to hardware design, was a mess. Mandatory kinect, always online DRM, claims of cloud assisted graphics coming that were literally impossible to achieve due to latency, the blatant waste of die space and APU budget, leaving it overpriced and underpowered, the list just keeps on going.

Back to my original point though, Phil Spencer is doing infinitely better at managing the XBox division than Don Mattrick. If they go back to maintaining the superior GPU status of XBox consoles, as it looks like they will be, then all that is left is for them to do is invest heavily in first party studios. Phil desperately needs to get plenty of fresh games onto the XBox One that will make people actually want to move back to, and stick with, the XBox brand. But, just as they're having to rebuild trust with PC gamers, it will take time to rebuild the XBox fanbase to the level that it was during the peak of the XBox 360. I do not think that they should abandon the platform, though. They should keep moving towards integration of PC, mobile, and XBox games, while also keeping the XBox console on the market as both a cheap, budget PC type gaming system, and as an easy to use, easy to maintain system for people that prefer to consoles over PC's.

Announcing two consoles killed the one in the one in the middle.

You know what else strange? Not having any exclusive for your platform.