Xbox's Extensive Library: A Key to Success

A notable aspect of Microsoft's efforts to acquire Activision Blizzard is the company's willingness to downplay its competitive position in the market. By highlighting the performance gap between Xbox and PlayStation, Microsoft aims to convince regulators that the acquisition will not significantly disrupt the industry. This approach is a deliberate strategy, as Microsoft seeks to acquire Activision Blizzard for a substantial sum and needs to demonstrate that the deal will not harm competition. The claims made by Microsoft are accurate, as Xbox lags behind in terms of hardware sales and its library of intellectual properties. Microsoft acknowledges this weakness and has focused on backwards compatibility to offer a unique selling point. The company's efforts have resulted in an impressive library of older games, available through the Game Pass subscription or for purchase at a low cost. This extensive library is a significant advantage for Xbox, setting it apart from its competitors. Microsoft's commitment to backwards compatibility has been successful, with recent examples including the restoration of matchmaking functionality for Xbox 360 era Call of Duty titles. This move led to a significant increase in players, with around 100,000 people playing the games online. The company has also improved the matchmaking system for its 2007 title Shadowrun, demonstrating a willingness to invest in backwards compatibility. While Microsoft cannot fix every issue with older games, its unique position in the industry allows it to work on backwards compatibility where possible. The company operates a large cloud computing platform, enabling it to move services from dedicated servers to cloud-based solutions at a relatively low cost. This capability sets Microsoft apart from its competitors and provides an opportunity to make backwards compatibility a major competitive advantage. The potential appeal of online services for older games may seem limited, but the benefit of being the default platform for these experiences is clear. With the rise of viral content, older games can experience sudden boosts in attention, providing a halo effect for the Xbox platform. Microsoft's focus on backwards compatibility is well-timed, as the industry has never seen a point where a longer tail of games remains playable and enjoyable by modern standards. The company's commitment to managing its back catalogue has the potential to be a smart long-term play, ensuring that today's titles remain playable and functional in the future. By enforcing rules on its platform, Microsoft can guarantee the stability and quality of its back catalogue for decades to come. As the gaming industry follows other media in valuing well-managed and accessible back catalogues, Microsoft is well-positioned to make this a major competitive advantage for Xbox.