Xbox chief Phil Spencer has admitted that he doesn't know whether Microsoft will be able to overtake Sony this generation, acknowledging that PS4 has a "huge lead" over Xbox One.
Asked whether Microsoft could beat Sony this gen during a panel at the 2015 GeekWire Summit, Spencer told the audience: "You know, I don't know. You know, the length of the generation... They [Sony] have a huge lead and they have a good product. I love the content, the games line-up that we have.
"One thing that probably I didn't realise as much as I should have when I started in this role was the impact that the launch had on our team here in Redmond, the Xbox team," he continued. "Because it's easy to read the blogs and the sites and my Twitter feed and see what the customers think of our brand and our product, but the team in Redmond took as much of a hit as the external community did around the launch. And I sit back and I think about an [organisation] of thousands of people, you're down in the organisation and some words and some actions from executives kinda just trash all the work that you've done over the last three years, many weekends and nights, and you start to question why am I doing this? Why am I working so hard when a few crass comments can actually position our product more directly than any work that the team was doing?"
Regaining confidence amongst the team was "job number one" when Spencer took over the role as head of Xbox last April, he adds, "and being very forthright with them about where we were and our ability to do things like beat Sony was critical. What I've seen in the 18 months that I've been in the role is the team is getting more work done in a day than I would expect.
"Every time I sit down and I do a product review, mostly every time, the team comes in with surprise and delight around the momentum that they have, more than I'm able to add. And when I see that transformation of a team that's questioning the leadership of the organisation to a team that's motivated by the customers that we have and their ability to delight them, I see a team that's making amazing progress. [Backwards compatibility] was one. We didn't know back compat would work. We started it. A few ninja engineers went off and figured it out, how do you go from PowerPC to X86 and translate game code that's about as time-critical as any piece of code that you would want in terms of its performance, and they got it done. So I would never question the ability of our organisation, but I'll say we're not motivated by beating Sony, we're motivated by gaining as many customers as we can."
Earlier in the interview, Spencer said that he felt Microsoft had "fundamentally lost... the trust of our most loyal customers" around the time of the Xbox One's launch.
"Whether it's always-on, used games, whatever the feature was, we lost the trust in them that they were at the centre of our decision-making process," he said. "Were we building a product for us, or were we building a product for the gamers? And as soon as that question came into people's minds and they looked at anything, whether it was the power of our box, our launch line-up, microtransactions, any of the features that you talked about, what you find is very quickly you lose the benefit of the doubt. You lose your customer's assumption that the reason you're building your product is to delight them and not just build a better and more maybe manipulative product.
"And that really set with me going through the launch and just watching the reaction, as you said, of the most loyal fans, people that had Xbox tattooed on their arm. And them coming to us almost in tears because they felt like the direction we were going with the product didn't include them. Have we recovered? I feel really good about the position and the product and the brand right now, but I was at the Gamestop Manager's Meeting about three weeks ago and I'm sitting with 5,000 Gamestop managers in Las Vegas and they'd come up and they still have customers that walk in the store that think that the Xbox One won't play used games. Just to be clear, Xbox One has always played used games from day one. But that perception that gets set early on, because consumers have five seconds to internalise your brand and your message and then they move on. They're not going to spend time to read what we say afterwards. 'Oh Xbox One, that's that thing. If I want it I'll go buy it and if I don't I won't.' Regaining that trust and the mindshare with the customer, the gamer, is incredibly difficult."
Microsoft faced major criticism from fans in the run up to the Xbox One's launch back in 2013, forcing it to reverse its decisions on online requirements and the restrictions on pre-owned games. It later took Kinect out of the box, too.
The platform holder hasn't officially updated Xbox One's sales figures in almost a year, when it revealed last November that the console had shipped almost 10 million units. Sony, meanwhile, announced in July that PS4 had sold 25.3 million units worldwide.
If you've got a spare half hour, you can check out the full interview with Phil Spencer below.