Don’t worry, Xbox is not ditching the High Street

There is just one Microsoft-published game on the release schedule.

Gears of War: Judgment launches on March 22nd and when MCV asked a rep yesterday if that was it, we were pointed to the array of Xbox Live Arcade titles on the way.

It’s not exactly the answer GAME or Tesco was hoping for.

Perhaps its unsurprising that Microsoft is being increasingly wooed by non-physical product. It’s most successful game last year was Minecraft on Xbox Live Arcade, while titles such as Trials Evolution were big sellers.

And then there was the rhetoric from Phil Harrison – Microsoft’s new European studios chief – during the reveal of Microsoft’s new UK studio: Lift London. A studio dedicated to building games in the cloud and not creating physical product.

"I wanted to create from scratch a 21st century studio. Not a studio that would make retail products," he said.

And then added: "We’re Moving from being the maker of packaged products to the operator of connected services.”

Then Lift Studio’s new boss, Rare veteran Lee Schuneman, took to the podium and said: "We are also here to create new IP in new business models. Europe is our main focus. We are here to deliver entertainment as a service, when, where and how you want it. We are going beyond the box, onto tablets, mobile and TVs.

"With its massive up-front-design and development costs, the traditional retail games release model as we know it is…"

And we expected the next words to be ‘dying’ or ‘going away’ or ‘no longer viable’

But in fact what he said was:


Microsoft, much like its neighbours over at Sony and Nintendo are not ignorant to the benefits of the High Street. As an overall business, with the launch of Windows 8, Surface and its new array of mobile phones, retail has become even more important to the giant than ever before.

Then there’s those persistent rumours that Microsoft could be set to launch its own range of shops globally.

Whenever Microsoft has a new digital offering, whether that’s a new dashboard or a new Xbox Live Arcade game, it’s tried to involved the High Street. Sometimes through new hardware configurations or points cards. In fact, Xbox Live subs, points cards and download cards were amongst last year’s top selling accessories in the UK.

In reality, Microsoft’s vision of gaming in the cloud is nothing new. And it’s ‘connected services’ dream can be seen with Halo 4, with its regular release of episodic ‘Spec Ops’ missions. An initiative Harrison has mentioned in both his speech yesterday and his talk during London Games Conference in November.

Purchasing a product from retail on a disc is a great starting point, and 90 per cent of your content is on that disc,” said Harrison.

By and large what you get on that disc is the extent of the product. What I would encourage you to think is that the disc is the start of a five-year relationship with the gamer, we will try to refine and extend the product over many years. It is not mutually exclusive. We don’t have to stop doing disc products to be cloud-centric.”

The challenge for the High Street is to make sure they can play a role in that five-year relationship.

And the good news is that Microsoft will want them involved, just as retail was involved in the launch of Xbox Live. You can guarantee that Xbox will be working with GAME and co to make sure its cloud-based gaming dream becomes a reality.

Microsoft’s words regarding packaged media may sound concerning, but in many ways this is retail’s best opportunity to work out what role they can play in the future of the games industry.

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