Xbox founding member: 'Microsoft may not understand what it's doing and is just trying things'

Laura Fryer, who helped launch the original Xbox console in 2001, shares insight on the current Xbox fiasco and indicates that Microsoft could just be experimenting to see what works.

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Xbox isn't very popular right now. After heavy layoffs, project cancellations, and studio closures, Microsoft seems to have burned the other end of the bridge by raising prices on Xbox consoles and Xbox Game Pass. As a result, there's now a modern generation that includes a $800 games console.

Original Xbox founding member Laura Fryer has a particularly interesting take on the situation. She says that it's entirely possible that team Xbox simply doesn't know what they're doing--not in a derogatory way but more of an assessment. The higher-ups at Xbox might be trying everything to see what does and doesn't actually work. After all, Fryer says, no one really knew what they were doing when the original Xbox released decades ago.

"It could also be that they're just incompetent, that they just don't understand what they're doing and they're trying things.

"When I used to work at Xbox, I always found it amusing to hear what people outside the company thought about what we were doing. We were often painted as these supervillains.

"The reality was that we were just trying to figure things out. We had no idea what we were doing."

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This air of experimentation feels like it has some truth to it, as Xbox hasn't been consistent with its messaging and is often a volatile subject, often due to mistakes that were made many years ago.

Losing the Xbox One generation set Microsoft back big time, but the business model of unprofitable hardware has been an albatross for Microsoft since the original Xbox. Unlike PlayStation and Nintendo consoles, Xbox systems don't ever make a profit, and are loss leaders. Microsoft instead profits from games and content.

Game Pass in itself is an experiment, and one that has apparently worked--or at least it worked well enough to generate $5 billion or 21% of Xbox's annual revenues last year.

The subscription is an effort to pry games and content from the console ecosystem and place them into a digital, recurring subscription. These kinds of models are more profitable--as Xbox's CFO Tim Stuart puts it, subscriptions like Game Pass are 'high-margin businesses'.

The former Xbox exec goes on to say that she believes the controversy will harm Xbox. And that's already happened--enthusiast gamers aren't happy with the brand, especially those that have invested their digital personas into the ecosystem.

The negativity could make it harder for Xbox to hire new people, including game developers, Fryer says.

"I believe all of these changes, and drama, will harm Microsoft's brand as well. When we launched Xbox, Microsoft was not a beloved company. All that changed with Xbox.

"I can't overstate Xbox's impact on Microsoft's public image. It made the company feel approachable, fun, and less serious. It sparked excitement across the organization.

"Amid recent controversies, that advantage is fading. When the source of your cool factor starts to seem greedy, it hurts your ability to attract and retain talent."

Fryer ends the video saying that Microsoft needs to rebuild trust with gamers and fans, which seems like the right way to go. That might be hard to do once advertisements start showing up in dedicated console games, though.