[DEBUNKED] Did Phil Spencer really shoot down xCloud on Switch?

August 1, 2020 admin 0 Comments

This started out as a simple reply to a comment but turned into a 10+ hour long writing session of a huge wall of text! Hope you can still read it, though, as it will answer all your questions and doubts 🙂
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CONTEXT
I made a video on why Master Chief in Smash makes perfect sense as a marketing buzz for xCloud on Switch (as well as Halo: Infinite, especially since it’s F2P), but then Phil Spencer (head of Xbox) seemingly said Game Pass/xCloud isn’t coming to Switch/PS4 in an interview. Let’s analyze that!

Video on why Master Chief in Smash makes sense
Phil Spencer’s interview (6:11)
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TL;DR: read headings “In Conclusion” and “Final Conclusion”

== Analysis ==

People seem to be jumping to conclusions from Phil Spencer’s statement, so let me clear this up after carefully analyzing his words:

The thing about other gaming console platforms is we’re not able to bring a full Xbox experience on those platforms

According to him, they’ve brought the “full Xbox experience” on PC and mobile devices:

In places where we have [been able to bring a full Xbox experience], like mobile phones, like we’re doing now with xCloud coming to Xbox Game Pass Ultimate [and] what we’ve done with PC and bringing our full Xbox experience there.

so, What does “full Xbox experience” exactly mean?

(continued directly from last quote) Because we know when somebody is playing one of our Xbox games there is an expectation that I’ve got my Xbox Live community, I have my Achievements, Game Pass is an option for me, my first-party library is there, is completely there…

And the other, you know, competitive platforms, aren’t really that interested in having a full Xbox experience on their hardware. But for us, we want to be where the gamers want to be.

“Full Xbox experience” consists of:

He mentions this list twice in the full interview! But is he sure about Nintendo not wanting such an experience on Switch? Let’s tackle these one by one for Switch.

Xbox Live

Xbox Live is already implemented in Minecraft for Switch (Bedrock edition). You can sign in with your Microsoft account (required for cross-play and servers), earn achievements, join Microsoft friends’ worlds, and online doesn’t require Xbox Live Gold (only Nintendo Switch Online)! The achievements you earn and skins you buy will be saved to your Microsoft account (aka cloud saves).
- Xbox also officially stated that Cuphead for Switch would receive Xbox Live support (March 2019), but as of writing, that still hasn’t happened
Voice chat and text messaging shouldn’t be an issue either, because some games like Fortnite have native messaging and voice chat, which is NOT a part of Nintendo’s app

Game Pass

He doesn’t specify Game Pass through xCloud or directly, but I’m assuming that on Switch it’s Game Pass through xCloud, since that’s the most feasible technically
Game Pass would seem to be the biggest barrier as people say that it would cannibalize the sales of Switch games in three ways:
- Switch and Game Pass have a shared library of indie games that people think will see less sales of on Switch, which means Nintendo lose out on sales (because they get like a 30% cut of every sale).
- Having a great library of 100+ games available for $10/month would seemingly render buying games useless on Switch, which again means Nintendo losing sales because Game Pass is plenty enough.
- 3rd party ports and AAA titles would seemingly decline as they can just release their games on Game Pass and tell Switch users to “play it on xCloud”.
But does Game Pass on Switch really need to have the same library as on console/PC to be considered as a “full Xbox experience”? Can’t they just release xCloud on Switch with a limited library to mitigate competition with Switch sales?
Turns out Phil Spencer considers Xbox console as a “full Xbox experience” AND also PC as a “full Xbox experience” ™.
- The problem is that Xbox Game Pass for PC and for console are two different services. They offer different games, even if many are shared, but you can’t say they’re the same. The fact that Phil Spencer still refers to both of them as the “full Xbox experience” means that the number of titles in Game Pass isn’t part of the “full Xbox experience”.
- PC-only games include: Halo 3, Halo MCC, Saints Row IV, and Age of Empires II
- Xbox console-only games include: Halo 5, Soulcalibur IV, Kingdom Hearts III, Red Dead Redemption 2, Nier:Automata, The Witcher 3, Devil May Cry 5, Mortal Kombat X, Tekken 7, Fable, DiRT 4, PUBG, Quantum Break, and Banjo-Kazooie
- Clearly you CANNOT call them the same!
Yet, he is calling both the Xbox console and PC as a “full Xbox experience” each, meaning the Game Pass libraries don’t have to be identical to be considered as part of a “full Xbox experience”!
So, what’s really stopping Xbox from having a separate Game Pass library of games for xCloud on Switch?
- If Nintendo aren’t “that interested in having a full Xbox experience on their hardware” because of competing sales of shared titles, then simply remove those titles from Game Pass on xCloud for Switch!

1st Party Titles

First-party Xbox titles should definitely not be a problem for Nintendo. More AAA titles on Switch are always welcome, and being 1st party Xbox titles would mean nothing to compete with on Nintendo eShop.
Halo, Gears and Forza on Switch would only help drive Switch sales!
These games wouldn’t otherwise be ported, so cloud streaming is the only way.

In Conclusion

Xbox Live is already mostly implemented in Minecraft for Switch, and planned for other titles like Cuphead
Game Pass doesn’t need to have an identical library across platforms to be considered as part of a “full Xbox experience”
1st party Xbox games shouldn’t be a problem for Nintendo to have on their platform
Which means:
- There’s already a “half Xbox experience” in place on Switch (Xbox Live)
- If Nintendo is having an issue with the other half of the experience — Game Pass through streaming — then Xbox should simply remove the games Nintendo don’t wish to have on Switch as competition. According to Phil Spencer, that should still be considered a “full Xbox experience” ™.
  - Xbox likes to offer choices to players (a large part of the interview), which is why Xbox games are published on Steam, as well as on their own Microsoft store and Xbox Game Pass for PC (separate app), because gamers want that choice.
  - However, people who buy Xbox games on Steam won’t get the benefit of cross-buy, though. That means they’ll have to re-buy the game on consoles and other platforms. With Microsoft store/Game Pass, it’s buy once, play anywhere. This benefit is not carried over to Steam.
  - Xbox is willing to accept sacrifices on their services if it means giving players choices**.**
- There should really be no problem for Xbox to give into this criteria of limiting their Game Pass library for Switch.

Conclusion: release Game Pass on Switch through xCloud with a limited Game Pass library, and it should still be considered a “full Xbox experience”, meaning Phil isn’t being 100% honest about Nintendo not wanting a “full Xbox experience” on the Switch.

B-but, Nintendo gains NOTHING!!

Then there are those who claim that Xbox Game Pass coming on Switch is a loss for Nintendo, as they wouldn’t get a cut from the monthly fee of subscriptions, and it would only take over Nintendo’s sales.

Technically, they could reach an agreement where Nintendo gets an x% cut of each subscription made through Switch, OR they could get an x% cut of every microtransaction made on Switch through xCloud
- In Minecraft on Switch, buying coins leads you to the Nintendo eShop where you perform the transaction, meaning Nintendo already get like a 30% cut of every microtransaction made on Minecraft for Switch!
- If Xbox is serious about putting xCloud on every device imaginable, then they must’ve prepared for platform fees and royalties. This shouldn’t be a problem for them.
Hulu on Switch (USA only) has been there since 2017, but AFAIK it’s not possible to login or buy memberships through the Switch app. You have to login through a web browser on your PC/smartphone, just like how logging into/registering a Microsoft account in Minecraft for Switch works. Nintendo seemingly don’t profit off of this (unless there’s a separate deal in place).

But still, wouldn’t Game Pass cannibalize Switch sales?

Actually, it’s been proven time and again that putting a game on Xbox Game Pass increases its exposure, playtime, and most importantly, its sales across platforms!
The same argument can be made for the Xbox console: wouldn’t putting a game on Xbox Game Pass cannibalize sales of that game on the Xbox console?
- But that’s not the case. Descenders, as mentioned above, is a great example of an Xbox game being added to Xbox Game Pass and actually increasing its sales greatly!
  - Phil Spencer said in 2018 that putting a game on Game Pass raises its awareness, which generates word-of-mouth, which then starts trending on Mixer, Twitch, people talk about it on Discord, etc., and that helps bring in more sales, because people “play based on what everybody else is playing”. Here are hard numbers for Game Pass (2019) — most notably being 25% increase in preorders, and 10% increase in franchise sales.
If anything, Xbox Game Pass through xCloud on Switch might just increase sales of games, thereby giving Nintendo more revenue!

The most convincing argument, that many seem to fail to grasp, is that cloud gaming is the future, it’s coming in hard and it’s here to stay. How is Nintendo, with its portable Switch, prepared for this wave?

Switch will lose even more if xCloud comes to mobile phones and NOT the Switch, because that would be in competition with Switch’s and casuals wouldn’t have a reason to get a Switch. Gaming AAA games portably on their smartphones for only $10/month will be a viable and cheaper alternative to Switch, especially to parents and casuals/non-gamers. Nintendo will face competition regardless of what they do, so by not putting xCloud on Switch they would be losing out on the growing curious non-gamer market.
- xCloud with its amazing games line-up and value for money would definitely pose a threat to console gaming because of the extremely low entry barrier, both economically and accessibly — especially to Switch, because of portability. More and more companies are most likely coming with their own cloud gaming services, so preparing for this wave is inevitable for Nintendo.
- I realize that Stadia isn’t a success AFAIK, but xCloud has a much better pricing and value for money, and thus a much better chance at capturing the market!
and Let’s face it, who’s going to pay $300 for a Switch and then only use xCloud?? That’d be like paying $1000 for a MacBook/iPhone just to use Facebook, or get a Switch just to play Fortnite and watch YouTube… oh, wait…
- Jokes aside, those who’ve bought a Switch must’ve been allured by its unique aspects, like portability, offline play, its hybrid nature, different playstyles, 1st party games and their creative playstyles (like Super Mario Party), etc. The rest is icing on the cake. Cloud gaming won’t just come and replace that! Maybe it will replace some 3rd party games purchases for some, but the gameplay will be heavily dependent on internet and a good stable connection, which will limit portability!
The best case scenario for Nintendo is to embrace cloud gaming early on and let people experience it through Switch with xCloud. They can’t compete with it.
- Microsoft has the perfect cloud infrastructure to pull this off, while Nintendo still struggle with their horrible netcodes (read: Smash Bros Ultimate). They’d be wise to jump on the superior cloud gaming service than to try and cook up a half-baked version of their own later down the line.
  - Besides, if they do try cloud gaming, it’s highly unlikely they’ll make their own cloud infrastructure. They’ll anyways have to go with something like Microsoft’s Azure cloud infrastructure, just like how Sony have partnered with Microsoft for their own cloud streaming service, because that’s Microsoft’s main business.
  - And let’s face it, Nintendo’s 1st party games rarely go on sale, except for on the eShop, because they know their games keep selling for $60. I don’t think they would want to make an Xbox Game Pass replica and sell their 1st party games for $10/month. Heck, they recently stated that they’re focusing less on mobile games because it’s not quite working out for them and the recent success of Animal Crossing has them realize where the true money lies — on their hardware.
  - But, Nintendo have in fact acknowledged that cloud gaming will be widespread in the future, and that they “must keep up with such changes in the environment”. But they emphasize on their unique aspects as selling points, even if cloud gaming is to take over the industry. Also cloud gaming will only increase the number of gamers, so Nintendo will have even more people to sell their hardware to, or so they believe. But just like how they lagged behind in the mobile market, it’d be bad if they embraced cloud gaming too late.
- Game Pass has already 10 million subscribers, reportedly, and it’s only going to grow since Xbox is pushing it as their true next-gen “console”. Nintendo had better jump on that before it really takes off with xCloud on every device without them getting any exposure from it.
If Nintendo don’t accept xCloud now, which will anyways come to every device out there, they risk losing out on potential Switch buyers from the user base of xCloud subscribers on mobile! It’s only in their best interest to embrace xCloud on Switch now, as they might get a share of xCloud users on to the Switch, because once casuals have tried xCloud on mobile, they might look for Switch with its dedicated gaming controllers as one of their many devices to play xCloud on. This also holds true for Xbox owners, who might be inclined towards getting Switch as a portable extension to their Xbox consoles. And once they’re on Switch, Nintendo can push their 1st party titles and unique aspects.
- Nintendo’s 1st party games are still the biggest revenue makers on Switch. Almost 50% of Switch owners have bought Mario Kart 8 Deluxe! Besides, the unique aspect of Switch’s many forms and playstyles isn’t something cloud gaming can replace. So once people are onboard on Switch, they may buy other games, and thus increase Nintendo’s revenue.

The last argument remaining for why this is bad, is that 3rd party developers can just put their games on Game Pass and tell Switch owners to play it there through xCloud

One question: do developers get paid for every time someone plays their game on Xbox Game Pass? — NO! They most likely get paid once upfront, and have to rely on microtransactions to keep revenue coming in. Yes, xCloud on Switch might increase player base and thus revenue from microtransactions, but indie games with no microtransactions will suffer from this.
The whole point of Game Pass is to raise awareness and thus increase sales! Meaning they want the exposure to translate into hard sales. Otherwise they probably won’t earn anything from it.
Putting 3rd party games on to xCloud and just telling Switch users to play them on Game Pass is a horrible business model! They need to make ports/Switch versions available as well so people can actually buy them from all the exposure. This way the developers actually earn cash, AND Nintendo get a 30% cut from the revenue — win/win!
- unless we’re talking about EA here — this would only incentivize them to halt all future Switch ports, save money on that, and milk microtransactions…
However, that’s not to say that some developers may still tell Switch owners to play their games on xCloud. That way they can test the waters and get a better insight on engagement from Switch users, to assess if making a Switch port is worth it. This means more 3rd party games having a higher chance of getting a Switch port, which is only great for Nintendo!

Final Conclusion

The cloud gaming revolution and games subscription model is coming and it’s here to stay. It will compete with the Switch as a viable and affordable alternative. Nintendo have no choice but to embrace it, either now or later on.
Nintendo ought to put xCloud on Switch to act as a hook and a gateway to their own Nintendo ecosystem.
- As Game Pass is growing with its currently 10 million subscribers, it’s going to be everywhere with xCloud on mobile devices, and Nintendo need to tap into that user base to not lose out
- By putting xCloud on Switch, Nintendo give xCloud/Game Pass subscribers an option to use xCloud on a Switch — which has dedicated gaming controllers and a portabie form factor better suited for gaming than smartphones — thereby pulling them in Nintendo’s ecosystem.
xCloud on Switch won’t cannibalize sales either, but may rather increase sales!
Xbox should put xCloud on Switch with a limited Game Pass library (or not limited), and Nintendo should embrace the coming age of cloud gaming and take advantage of it while they can!