When we created Project Scarlett, and it was years ago that we started, we had the discussion as a leadership team: should we do another console?
The team didn’t ask about game streaming but did ask if there is “a design point that matters beyond what Xbox One is capable of today?”
The answer to that question was yes, and that’s why Microsoft is planning to release the Xbox Project Scarlett over the 2020 holidays. However, Microsoft may have a different answer if it asked itself that today.
Consoles are no longer the most important part of the Xbox business. Microsoft has put a huge amount of resources into developing its game streaming and services. It has been testing Project xCloud, a service that allows players to stream games on any device; fans can also subscribe to Xbox Game Pass, which gives them access to a large library of games.
Microsoft would probably like it if everyone purchased an Xbox One console, but it seems happy for people to play its games in any way that makes it money.
It’s not the only one with this kind of model. Sales of the iPhone are falling, which is why Apple has created services such as Apple Music, iCloud, and Apple Arcade. When people aren’t buying new phones, they may be spending more money on the services. By getting users to use services, it can also make then much more loyal. And if those services have more features when used with that brand’s devices, they will be less likely to buy devices made by other brands.
Microsoft was unable to sell more Xbox One consoles than PS4s because it had fewer quality exclusive games and because it was more expensive when it was released. It’s unclear if Xbox Project Scarlett will sell more, but however many consoles Microsoft sells, it could be planning to make the console its last.