Report: Microsoft execs want any Xbox game on PlayStation, no exclusions or exceptions

Xbox is reportedly under pressure to increase margins, and breaking exclusivity on more first-party games might be the solution.

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Like most games companies right now, Xbox has a problem. The industry just isn't growing despite Microsoft's best efforts. Game Pass subscribers have stalled, and Xbox hardware sales are down significantly. Excluding Activision's contribution, Xbox games division revenues are flat year-over-year.

Despite all of these burdens, Xbox is still expected to deliver not only profit, but some measure of growth. The current games industry debacle comes shortly after Microsoft bought Activision for $72 billion. After the buyout, Xbox is on the hook for the merger and Microsoft's executives and board of directors expect returns. This extra pressure, combined with Xbox's general flagging presence in the hardware market and sluggish topline growth, see the games-maker encumbered by the heavy weight of financial pressures.

One solution to help boost Xbox's margins is to break exclusivity in select first-party games.

We saw this with four titles, Sea of Thieves, Grounded, Pentiment, and Hi-Fi Rush. The move has apparently been successful. Two of these games--Sea of Thieves and Grounded--regularly appear on the top 25 best-selling PlayStation Store games list in the U.S. At the time, execs were careful to say that Indiana Jones and Starfield were not coming to PlayStation, and Xbox CEO Phil Spencer said at the time that he 'wanted to use what PlayStation has' in order to grow Xbox.

According to a new report from Windows Central, this plan isn't over. Microsoft is reportedly developing new games to port over to PlayStation, and the company's top brass, including CEO Satya Nadella and CFO Amy Hood, want there to be a no exceptions policy in regards to which first-party Xbox games can break exclusivity.

It's said that other parts of Microsoft's gaming team are pushing back against the clause.

This isn't the only topic causing infighting at Xbox; new reports also suggest that Xbox is conflicted on whether or not launching new Call of Duty games onto Game Pass is a good idea.

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During the FTC v Microsoft evidentiary hearing in June 2023, Microsoft CEO Satya Nadella said that he had "no love" for exclusivity.

"If it was up to me I would like to get rid of exclusivity on consoles. The dominant player has defined market competition using exclusives. I have no love for that world," Nadella said at the time.

Pressures from corporate HQ are normal for Xbox. The games division has missed projections for multiple years, and during the same evidentiary hearing regarding the Microsoft-Activision merger, Xbox CEO Phil Spencer gave a candid description of these pressures.

"Gaming runs as a standalone profit and loss business inside of Microsoft, We have a commitment to the company and the board to run a profitable business. We are effectively a standalone business," Spencer told Microsoft lawyer Beth Wilkinson in his testimony.

"We have both gross margin targets, and accountability margin targets/profit. We have to grow the business at the topline, the revenue, and the profitability of the business," Spencer said.

"If we're not able to grow enough revenue to cover cost increases, we have to find other ways to cut costs to meet accountability margins, you can see job eliminations, cutting back on spend on other things in the market, because the profitability of our business is non-negotiable at the company."

Microsoft has not announced any more plans regarding more games breaking exclusivity and being offered on PlayStation and/or Nintendo Switch.