Ask Paul: February 27 ⭐

Happy Friday! After a huge week for Xbox, it’s not surprising that we’re all wondering about the future. Of Xbox. The post Ask Paul: February 27 ⭐ appeared first on Thurrott.com.

Happy Friday! After a huge week for Xbox, it’s not surprising that we’re all wondering about the future. Speaking of which… Have you ever played any of the Ultima games? I’ve been thinking about the series lately because I used to play Ultima Online and looking to unofficially revisit that world in tabletop form by running some games in Brittania. It’s a series that was very influential for its time but sadly seems to be left in the past.

Yes, but these were the very earliest Ultima games and so this was over 40 years ago. The last one I had was Ultima IV for the Commodore 64, which came with a little metal ankh (that vaguely resembled a Monopoly game piece) and a cloth map of the world that I ended up using as a printer dust cover. A friend and I would play that one pretty regularly, but I can barely remember it now. But this kind of thing was a big deal in that era, generally and for me personally.

I was an avid reader of Tolkien and related fantasy/sci-fi. I played Dungeons & Dragons (and a few similar games, like Traveler) with a group of friends regularly. We all spent time with physical board games and early computer games. One of my first Commodore 64 games was a dungeon crawler-type game that came on cassette and I was able to break out of it and into its source code, amazingly it was written in BASIC, and that fascinated me.

But there was this progression from the Adventure/Zork text-based games to kind of static graphic games that were still text-based or maybe had text choices to pick from, and then on to truly graphical games like Bard’s Tale and so on. Thinking about this now, the big thing that happened right after this was 16-bit computers like the Amiga and Atari ST, and then 16-bit game consoles. And the former could play the Sierra adventure games like King’s Quest, and that was what I wanted at the time.

I had an Apple IIGS and then an Amiga 500 and went through any number of Sierra games and similar games like Maniac Mansion from Lucasfilm Games and The Pawn (which I had to look up), and things just got more sophisticated. Or at least more beautiful: Defender of the Crown is in the upper echelon of Amiga games because it looks so good, and it was fun to play, but it was very simple too. Anyway, it’s been a while.

For me, growing up or whatever, there were these amazing Amiga side scrollers as well as the fantasy/adventure games, and then we got into the first-person era with Wolfenstein 3D and then DOOM and that was all she wrote. I do have this vague memory that Richard Garriott (I believe) was hosting a live event in what I assume was Ultima Online and someone showed up and assassinated his in-game character, which is hilarious.

But I have no idea where this game series is at right now, if anywhere. EA, I guess? It looks like the latter Ultima games have a Diablo-style look and feel. Speaking of which, Diablo was a big deal for a while there, despite all the FPS stuff that was happening at the time. There are all kinds of reasons. But the biggest are that they support all modern devices (via PDF and EPUB), they offer a much higher royalty rate, they offer variable pricing, they work natively with Markdown documents (Kindle does not), and I can very easily publish a book that’s in-progress and not yet complete.

So that’s what I’ve done for all the recent books. I am planning to put De-Enshittify Windows 11 on Amazon when it’s done, and in this case, it’s a book that can be “done” in the sense that it’s a finite topic and won’t change too much in a given year; I will likely need to update it at some point, of course, but I’m hoping it’s more of an annual thing. But most of my other recent books are on Kindle, it’s just that it’s very difficult to update there.

The other thing is that just putting a book on Amazon doesn’t guarantee anything, just as putting an app or game in the App Store doesn’t. These are big marketplaces with tens of thousands or more of new titles appearing every single day, and the chance of being found in that mess is tiny. I’ve been very successful selling directly through Leanpub. I would have to sell 5 to 10x as many books on Amazon for that to even come close, and Amazon does things with sales and so on that devalue books and lower the royalty rates dramatically.

Anyway, I will put this one on Kindle. But it’s a lot of work with little reward. I know you have been thinking about the iPad as a work device/daily driver, but will tablets ever be more the consumption devices? What needs to happen for businesses to say, “you don’t need a laptop or desktop…here take this tablet”? I’m not sure about the business use case per se, I would imagine that it varies by business and that bigger businesses are now driven largely by inertia and fear of change, and perhaps have legacy line of business apps that only run on Windows or whatever.

But the iPhone found its way into businesses pretty quickly, despite Apple’s lackluster support, and there’s little reason to think that the iPad couldn’t as well. I was thinking about this the other day regarding what became Some Thoughts About Alternative (Computing) Lifestyles ⭐, that there is this interesting middle ground between “device” and “computer.” As Steve Jobs would say, the question arose whether it makes more sense to take something complicated (Windows) and try to simplify it to make it more device-like or to take something simple (the iPad, in this case) and make it more sophisticated.

But maybe either way can work if done right. To me, the biggest deal is having a desktop-class web browser. This makes sense in Chrome OS, where you can also run Android (mobile) apps and Linux apps. It would make sense for iPadOS, if Apple would just give it basically the desktop version of Safari while retaining the rest of the system as-is. We’ll see what Google can do with Aluminum, its coming combination of Android/Chrome OS, but the miracle of the iPad today is that you can get what you want.

If you like the iPad as-is, as this consumption-first and touch-friendly tablet, it’s there. If you want it to work like a laptop, you have a choice of keyboard covers and can do that, thanks to the advances in iPadOS 26. You can also have both. The key there is the same as it is with businesses, really. It depends on what you’re doing and what you need. It depends on your ability to adapt if you can’t get exactly the same workflow, or apps, or services, or whatever it is that you expect from a traditional laptop, Windows or Mac.

But to me, this is like the conversation one might have about Windows 11 on Arm. There are these fringe extremists who insist this thing can never work, while it’s clear to anyone who actually tried one that it works great and is perfect for almost everyone. I feel like the iPad is pretty much there, too. It benefits from a decade and a half of developers actually adapting their apps to the bigger screen and not just upscaling them as is so typical on Android.

And now the system itself is powerful enough to support any use case. Was the Activision/Blizzard purchase equivalent to Microsoft buying Nokia in order “save” Windows Phone? i.e. despite the purchase the Xbox could not be saved No. These things are on completely different planets. In fact, there’s a way to compare these where the outcome is that they are the opposite of each other. That is, Microsoft acquired Nokia not because it wanted or needed anything it had, but because not doing so would have meant the instant death of Windows Phone as a platform.

But Microsoft acquired Activision Blizzard knowing that the logical outcome would be the death of Xbox as a hardware console business: Along with the Microsoft Games, Bethesda, and Mojang titles it already had, this cemented the business as a game publisher. And for that to be successful, those games need to be everywhere possible: PC, console, and mobile. Tied to this, Nokia was a $7.2 billion acquisition in 2014, whereas Activision Blizzard was a much bigger bet on the future at $68 billion ($75 billion in the real world given later adjustments).

Windows Phone was never even a tiny slice of Microsoft revenues (I bet it never exceeded even 1 percent), but Microsoft Games/Xbox is a sizable revenue generator, $23.5 billion in the most recent fiscal year, our of $281.7 billion, so about 8.5 percent. Microsoft is a big company, but it’s not going to write down or write off Activision Blizzard, even if doing so somehow made sense, which it does not.

This is a viable business. Consoles have always done something that PC can’t. They deliver more than the sum of the parts. They offered developers direct access or as close to direct access to hardware. Layers of abstraction reduced and the net result was performance greater than what the hardware would be capable of under general computer use. Consoles have also evolved. For a long time, any given console was set in stone and could never be updated, and many were incompatible with their predecessors.

(Think Atari 2600/5200, NES/SNES, etc.) In time, we started to see consoles that were updated mid-stream in a given generation, as with the PS4 and Xbox One, the latter of which had three distinct versions. When Microsoft launched the Xbox Series X and S, it offered two tiers of capabilities at the same time, for the first time. The basic consistency here is that games would work on any console of a given generation, but you could as a customer upgrade to a newer, more capable console and get better graphics, performance, or both.

So in this sense, consoles became more like PCs while retaining the simplicity bit that I do think is core to that experience. You just pick up a controller, power on, and play. The question here is whether Microsoft can adapt Windows to make it simple enough to make sense as a console OS. But that’s already settled, really. Every Xbox except for the Xbox 360 was/is a Windows PC, really. The Xbox One/Series X|S architecture is an adaptation of Hyper-V Server, which is Windows.

And so the thing they’re trying to achieve is what Apple did with the iPad (as above): A system where you can have either or both. It can be “real” Windows if and when you need that, and it can be a streamlined version of the OS that is less resource intensive and more similar to what we see on consoles. It’s getting there. Windows is complex, for sure. But Windows also brings the broadest and best compatibility out there, and that will be doubly true if/when Microsoft brings Xbox console game Backward Compatibility to the mix.

Until then, we still get our choice of stores (Steam, Epic Games, Xbox, whatever else), which is something we have yet to see on any console. And aside from the Switch, which is technically limited in many other ways, none of the modern consoles are in any portable. So you need to be in one room in one building anytime you want to play games. That is not how the modern world works. The Xbox Everywhere model is what makes sense in this world, as is adapting Xbox as a “console” to be based on real Windows, opening up that compatibility with the biggest game library (really, libraries) in the market.

The second part was the nature of the software, the OS was light, focused and stripped down, no bloat. I’m not sure what to say to that given that I, as an Xbox user, suffered through literally 20 straight years of slow-moving Xbox Dashboard software over three major hardware revisions that Microsoft was never able to fully solve. The OS should be minimalist, but it’s not clear that it ever was, unless you go back to the OG Xbox.

I’m also not sure if it’s fair to say that the thing you run games on “should” be anything, honestly. The most popular platform for games is mobile, and the iPhone and Android are general purpose personal computing platforms just like the PC. There are differences, obviously, especially around sandboxing and illegal lock-in, but we can do that in Windows, too. As above, things change. Consoles evolved, and will continue to evolve.

It’s doesn’t feel right to me that we somehow got it right at some slice in time in the past and we should always just do that thing, no matter how things change elsewhere. If the OG Xbox or Xbox 360 were somehow perfect to our memory, we’re forgetting things. That brings me to the next generation Xbox, running “full Windows”. Why as a gamer do I want it? Why would I prefer it? But more importantly, why would it be beneficial to Microsoft?

As for Microsoft, the reasons are even more obvious why it is and should be doing this. It has never built profitable hardware and no Xbox generation has ever been profitable as a result. But game publishing across platforms is a hugely successful business. If Microsoft dropped hardware today, or outsourced it to third parties (like ASUS with the Xbox ROG Ally), that problem goes away and this business would be profitable.

What’s the future for Xbox? It’s hard not to come away from the past weeks’ shakeups thinking the prospects are grim. I don’t see anything changing. Microsoft isn’t going to reverse Xbox Everywhere to start focusing solely on some console lineup that no one would buy anyway. This is a good example of insular thinking, in that of course we, as enthusiasts, have all these strong opinions and want things to be the way they were (while ignoring that that sucked in many ways), but to the broader world, none of this matters.

Xbox as a business will be successful when/if Microsoft offloads the hardware. That’s not changing. What I wrote in What’s Next for Xbox? ⭐ is still very much the case. This is going to be a successful game publishing powerhouse. But it has to get rid of the hardware. There was a rumor last summer that Phil Spencer was going to retire but it was squashed with “not anytime soon.” My cynical hot take is that later in the year it was determined to cancel Magnus due to the rising prices of RAM and SSDs and the fact that there would be even less uptake of this console compared to the Series S/X.

In other words, it would no longer work with Amy Hood’s margin requirements and still be at a price palatable to consumers. Thus, Magnus is now going to be the planned AMD chip sold to OEMs like Asus and Lenovo who will sell “Xboxes” at whatever margin they can afford. Spencer was thinking of retiring but was originally going to stick around until after the Magnus launch, then decided to leave early when it was cancelled.

Sarah Bond was too tied to him and that plan to continue, so she essentially became collateral damage. There are a lot of things happening there and we don’t have the full story yet. I do have two informants internally there who shared a few things that are relevant here, however. First, Phil Spencer originally planned to retire once the Activision Blizzard deal was finalized. This makes sense, as it should have been the crowning achievement of his 38-year career at Microsoft, during which time he transformed the failing business he inherited in the wake of the Xbox One debacle into a huge game publisher that now includes Mojang, Bethesda, and Activision Blizzard in addition to the previous Microsoft Games titles and franchises.

But there were a number of problems in subsuming Activision Blizzard and he stuck around to try to get past that. No one wants to leave on a sour note amid layoffs, studio closures, and so on. Also, the rumors that Spencer was going to retire last summer were true. Satya Nadella convinced him to stay through the holiday season and threw a lot of money at him. But the assumption was that Sarah Bond would succeed him, and there was a campaign internally to prevent that.

This came to a head and triggered his eventual retirement (and her leaving unceremoniously). I’m not sure what to say to rumors that Bond was difficult to deal with internally, but I do know she was right about the strategy and that Microsoft’s external partners in gaming loved her. Getting rid of Bond was perhaps the biggest mistake in this whole nightmare. Spencer wanted Microsoft to sell an Xbox-branded portable gaming machine, but that was shot down by the board as being too expensive with no payoff in sight, given all the hardware losses over the years.

Honestly, that was probably the right decision, and I think the ASUS partnership on Xbox ROG Ally points to how that could work in the future for other consoles. But we’ll see. There will be some future Xbox console generation, as was always the plan. But this is a distraction, and Microsoft competing with the industry it partners with doesn’t make sense. He writes, looking over at Surface and wondering how the hell that thing is still around.

Do you think this changes Valve’s plan for the Steam Machine? They already had to delay it due to the component cost increases but with the Xbox news my cynical hot take there is that they go for the jugular and try to sell it at cost or at a modest loss and plan to make up the difference with increased Steam store sales volume. You know, the Steam Machine announcement immediately felt like vaporware to me, and I was a bit shocked by the positive initial reactions.

Today, I feel like blaming the RAM costs now is just a convenient way to hide that fact, much like companies will blame AI for layoffs when that has nothing to do with it. That’s just theater. My big question about the Steam Machine has always been the cost, since Valve notably never once mentioned that. Any number of armchair pundits wrote some version of the story “This thing is screwed if it costs more than $x,” where “x” is whatever number makes sense to you.

But the value proposition of the Steam Machine, if there is one, is tied to the conversations above about consoles vs. PCs and devices vs. PCs. It should be simpler, it should perform well, and it should be compatible with some gigantic library of games. And then it should cost … what? Some number. We all feel differently about that number. But a PlayStation 5 Pro costs $750 now. That feels like a good number, given that the PS5 is a solid quality benchmark.

But what if it was $1000? I don’t know. Then again, not long after I wrote this I saw that Larry Hyrb (Major Nelson) was at Microsoft this week meeting with Asha Sharma and now the rumors are flying that he’s coming back. Maybe the old band is getting back together. Maybe they are doing a complete 180. As in Xbox 180? To make the console naming more confusing than it already is? If so, you know Zune, Windows Phone, Band, and Surface Courier/Neo/Duo are all coming back next!

😅 I can’t stand Larry Hyrb, and I will say that what Xbox needs is fewer old white guys and more young talent with new ideas. That may be what Sharma is all about, we’ll see. But the old-timers need to give it a rest and get back on the rocking chair. Their ideas were always terrible and they’re not needed today. We need new ideas. Let’s give the new Xbox a chance and see what they come up with.

But my prediction remains: It will be exactly what Spencer and Bond were already doing. “NASA lost a lunar spacecraft one day after launch. A new report details what went wrong” Paul, I’d love your long-view perspective on Microsoft’s biggest strategic missteps. For context, I’ve increasingly wondered whether Xbox has been a 30-year distraction, capital-intensive, strategically noisy, and ultimately dilutive to Microsoft’s core strengths.

You can argue it strengthened DirectX and developer mindshare, but financially and strategically it often feels like a series of resets rather than compounding wins. One of the themes in videogames today is that they have to compete with other forms of entertainment or casual time wasters like Netflix, Facebook, and whatever else. I don’t see that. Videogames have always competed for our attention, and yes, there are more ways to be distracted than ever before, but you either want to play games or you don’t.

It seems reasonable to me that anyone who wants to play games would also like the freedom to do it wherever they are. Today’s Xbox delivers on that, and is taking steps to improve it. And it’s interesting that this can and will be a successful business if they can ever just get past hardware. The OG Xbox was born in a different world. Microsoft in the 1990s saw obvious competitors in the software industry, but as that decade wound down, videogame consoles were suddenly on the radar.

The PS2, in particular, was a warning sign, this supercomputer in the waiting that could maybe one day replace Windows. So Microsoft did things like WinG to get game developers off DOS and onto Windows, and then DirectX. And then it decided the console market was big enough that it made sense to get a version of Windows in there as well. The model at the time was all about exclusives, so it acquired Bungie for Halo.

The thing that Xbox gives Microsoft, and this is more true now than ever, is a position with consumers, a place in people’s homes. As the world shifted to mobile and normal consumers stopped doing everything on PCs, this became a lifeline. There were all the half-hearted attempts everyone remembers, like Media Center, Zune, and whatever else. But through it all, Xbox remained. It’s still a very strong brand, and based on the numbers that came out of that report I just wrote about–“Of the 2 billion PC/console game downloads in 2025, 546 million were on Xbox, 626 million were on PlayStation, and 857 million were on PC”–it’s perhaps stronger than we realize here in our little world.

Xbox fans have spent at least the past 10 years wringing their hands over whether Microsoft should somehow just let Xbox be free, as a spin-off or whatever, or outright sell it. And there is perhaps some alternative timeline where Xbox as a standalone business, a much smaller business, could be profitable or successful somehow, I don’t know. Well, I sort of do know. I think that ship has sailed, and part of the reason is that AAA videogame development is so expensive now, and there is no company that could start a greenfield console project, attract a relevant number of developers, and be successful.

You almost need the scale of a Microsoft to make this work. But even then, it failed. Again, what makes sense is a cross-platform games publisher. Which is what this business is becoming. If you, Paul, could go back and prevent three major Microsoft decisions, what would they be? Never build Xbox as a console business, instead double down on DirectX, Windows gaming, and PC ecosystem dominance. Never bifurcate Windows into Home and Pro, avoid SKU complexity and messaging fragmentation.

Never skip annual Windows releases. Imagine a steady cadence: Windows 96, 97, 98, 99, 2000… avoiding the Longhorn/Blackcomb collapse, Vista reset, Windows 8 over-correction. Apple proved with iOS that annual incrementalism compounds momentum and reduces catastrophic resets. Even if you disagree with my examples, what are your top three “if only” moments in Microsoft history? In a very general sense, the biggest shift for Microsoft was its distraction during the antitrust era that led to it not competing effectively with Apple, Amazon, Google, and Facebook as those companies rose and created and then dominated new markets.

The pre-antitrust Microsoft would have killed those companies easily, but that all happened at exactly the wrong moment (for Microsoft) and it was hobbled. To be clear, we’re actually better off with this kind of heterogenicity. But from Microsoft’s perspective, that’s when it dropped the ball and ceded most of personal technology to others. (It rebounded nicely with cloud computing, of course.) That it claimed More specifically, the biggest mistake Microsoft made strategically was tied to Longhorn and a stunning and sudden reversal of Bill Gates’ decision to embrace web technologies everywhere.

I wrote about this is in Programming Windows: We Fought the Web and the Web Won (Premium), which is now part of the book Windows Everywhere, but dropping web technologies and going all-in on proprietary embrace and extend technologies (like .NET) was when the decline of Windows really began. Huge mistake. Microsoft should never have allowed Google to acquire DoubleClick. It could have had that company and dominated web advertising instead of Google.

Which, by the way, made $82.3 billion in revenues for Google in the most recent quarter, more than all of Microsoft combined. Microsoft should have just let Nokia go. Yes, that would have killed Windows Phone, but that happened anyway, and very quickly, and sometimes ripping off a band-aid quickly is the right decision. When Nadella became CEO, he killed the platform almost instantly, but he also telegraphed that this would happen.

It was irresponsible for Microsoft to buy Nokia. Regarding the product editions, Microsoft had great success with multiple SKUs in Office, so doing that with Windows seemed to make sense, and the more expensive SKUs performed better than the least expensive ones there too. But the world changed. Apple would make fun of Microsoft for having so many product editions, when it had only one, but Apple’s market was tiny, so that was an obvious choice for them.

Microsoft served different tiers of consumer and business markets, unlike Apple, and mostly through third-party partners, so these are somewhat unfair comparisons. I will say that when Windows finally became free (with Windows 10), that that was the right time to maybe scale back to a single edition. I suspect there are those at Microsoft who will explain that Pro sells better than Home and is thus more profitable, and that both need to exist for that to be true.

I don’t know. It feels silly now, but when Windows was very important, this system did work. Given that Fortune 500 CEO tenure often runs roughly 10 to 15 years, and Satya Nadella is now deep into his run, Satya became CEO of Microsoft in February 4, 2014, 12 years, let’s assume hypothetically he retires within the next two years, cuz AI bubble goes pop? Who would you want as the next CEO of Microsoft, and why?

From my viewpoint, he has already retired. He ceded strategy to Amy Hood and the bean counters years ago, and last October, he ceded what I would describe as “his remaining CEO duties” to Judson Althoff. Today, Nadella is essentially what Bill Gates was when he stepped down as CEO and became its Chief Software Architect for about 8 years. Someone who is a public face for the company, an advisor of sorts, and is more hands-on with the technical stuff.

But Microsoft is in so many ways today not even a technology company, it’s a land and asset management firm with a technology side business. He runs that, I guess. I suppose one could view Nadella and the possible AI bubble pop as being similar to Phil Spencer and the Activision Blizzard acquisition: You want to go out on a high note, but there are questions about what’s happening and maybe this isn’t the best time.

CEOs are like coaches of professional sports teams. It doesn’t matter how much success you have, at some point no one cares anymore and it’s time to move on because you’re holding back the organization. I assume many do not handle that well. Here’s the bottom line, though. Microsoft’s financial success under Nadella (really, under Amy Hood) isn’t just dramatically better than it was previously, it is almost literally exponentially better.

He oversaw one of the greatest economic runs in history, and while I have my doubts about whose hands were on the wheel during all that, history is written about the leaders, not the underlings. And right now, that is what he is associated with. If he waits to see whether this bubble bursts, he risks being seen as a villain, the person who squandered all that success. We’ll see. As for a successor, it’s gotta be Althoff.

I feel like Brad Smith might have been a great choice, but he’s getting older and apparently has some ideas about politics. “‘Pokemon Winds’ and ‘Pokemon Waves’ Revealed for 2027; Browt, Pombon, and Gecqua Revealed!” Are you still planning to write an article on your customized iPhone camera settings? I never adjust my settings on either iPhone or Android so I am curious to know what you changed to produce better results.

Most of it involves spending a lot of time learning how to use the stupid Photographic Styles interface to arrive at an overall look/feel that you like and then a bunch of small configuration changes. The iPhone may never have that incredible Google Pixel experience where you just pick up the phone, open the Camera, and take a photo and it’s incredible every single time. But I feel like I got it close.

I still babysit it a little in that I review important shots to make sure they’re not blurry or whatever. But not as much as before. Anyway. I will look into writing this up. But it’s worth spending time learning how to best configure the camera app on whatever platform for photos and videos. This will vary somewhat by person, and by platform, but there are a lot of commonalities too. Thurrott Premium delivers an honest and thorough perspective about the technologies we use and rely on everyday.

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Summary

This report covers the latest developments in iphone. The information presented highlights key changes and updates that are relevant to those following this topic.

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