Microsoft Losing to Sony Is a Wrong Gamers’ Perception, Says Pachter; They Want to Win Business, Not Console

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Following the rumors and then the confirmation from Microsoft that several Xbox exclusives (Sea of Thieves, Grounded, Pentiment, and Hi-Fi Rush) would launch on rival consoles from Sony and Nintendo, many gamers took that as an admission of defeat in the console war. However, Wedbush Securities analyst Michael Pachter shared a completely different view in his latest appearance on Pachter Factor, believing that to be an incorrect perception of Microsoft's true gaming plans.

He said the Windows and Xbox company intends to win the gaming business rather than the much smaller console business. They could do that by pursuing a much more aggressive pricing strategy on console hardware, which they would have the pockets to sustain, but that's not their plan. They will instead leverage the content they have at their disposal following the acquisitions to get the Game Pass subscription service up to 250 million.

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I think the whole development and promotion of Game Pass was always an acknowledgment that the Xbox is a platform and not necessarily a device you need. I think that Microsoft will be perfectly happy in a future where there are no consoles and everybody has a dumb terminal attached to the Internet, to the cloud, and they stream all their games.

Game Pass, that's their long long game, and I think Microsoft recognized very early on in this cycle that the future is the cloud and that if you don't have to sell a console your addressable Market goes from 200, 250, 300 million people who own consoles to 3 or 4 billion people who play games. That's their endgame, much like Netflix said 'how many people watch TV?' and the answer is 4 or 5 billion, so Netflix has 260 million now.

I think that they, Satya Nadella being the architect and Phil Spencer being the field general executing the strategy, I think they're trying to get 250 million Game Pass