Editorial

Does the way Microsoft report its Xbox numbers really matter? Absolutely.

While speaking at the Spring Showcase event, Phil Spencer took some time to address some of the controversial changes on how Microsoft is reporting its Xbox numbers. Among the changes, the biggest is a transition from reporting Monthly Consoles Sales to Monthly Active Users (MAU). While the claim is that this is a more appropriate metric to report a cloud service - and I would mostly agree - it doesn't go without saying that they are trying to minimize the ability for the media to compare them directly to their biggest (and currently leading) competitor, Sony and their PlayStation 4 console.

Sony will still report monthly console sales instead of MAU, so there will be no real way for the media to directly compare the two. Sure, there are services out there that will still be able to estimate the amount of monthly unit sales, but those numbers are always seasoned with a few grains of salt and sometimes vary widely from company to company. You could attempt to derive potential monthly sales from the increase in the MAU number over a period of time, but there too is a problem with this that I will discuss later.

"Somebody could buy a console and puts it in a box 2 years after buying it", said Phil Spencer, emphasizing a way by which reporting monthly console sales may prove less notable or accurate. While this may be true, I'm skeptical to say that people are boxing up their current generation consoles with the periodicity that he suggests. People aren't buying these consoles and putting them directly into closets - they are putting them in their living rooms and bedrooms and using them.

I will give credit where it is due, however, and in many ways Phil Spencer is right. In this day and age in gaming, where the majority of services have online components, it makes sense that the MAU number is one of particular and important interest. "It's an important metric to explain the health of any online service." This is true. If people aren't signing into Xbox Live and if people aren't using their services, this number is going to go down month-over-month.

This presents some new challenges, some of which Phil Spencer highlighted, but they all could have long reaching affects across the entire Xbox ecosystem. Almost anything can positively and negatively affect the MAU number. Big service outages, lack of compelling titles, and monthly hardware sales can all drastically change the number, opening up the table to discussion on what is actually impacting the MAU number.

While the MAU number matters to Microsoft, the media, and of course, its fans, there is another major player in this - the game developer. While it's highly unlikely that the MAU number would ever decrease month over month, if it ever did in any significant fashion, it's a trend that might catch a developers eye when evaluating what consoles they want to invest time into. With the Xbox One being the underdog in this fight, they can't afford any negative press, and they definitely need to minimize scenarios where developers might get cold feet.

Another important note is how they are getting this number. Note how I said monthly hardware sales, and I don't even mean just Xbox Ones and Xbox 360s. With the new reporting metric, Microsoft is going to be considering any platform which Xbox games run on. These users will only be counted once, regardless of how many gaming products they own, as they should, but this also means that even the casual Xbox gamer tapping away at Minesweeper will be counted side-by-side with the console and PC gamer. We don't know how Microsoft is going to break down their numbers yet, so while it could be extremely revealing or it could be equally vague.

Breaking down their numbers into what platforms their users play on would be an interesting and important factor in whether a developer would choose to work with the Xbox platform. To not do so would be even less revealing then their current reporting metric turning the performance of the Xbox brand and service into a guessing game.

Ultimately, if they want to be transparent to their fans, these numbers will have to be revealed or broken down to some extent. Saying the number of active users increased or decreased could be caused by any number of things and failure to disclose looks more like they are attempting to hide their performance rather than bring it into the forefront like they claim. They haven't released any numbers yet, but time will tell just how clear they plan on being. Leading a distant 2nd in the console wars, they need fans and developers on their side more than ever, but I'm not sure if this is in the right direction.

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