Xbox Paid Devs Up To $20 Million To Secure Day One Releases For First Console

Xbox began its journey in the gaming industry in 2001. Over two decades ago, PlayStation was leading the console market with the PS2, which would later go on to become the best-selling home console of all time.

As a new competitor, Xbox struggled to find its place between Sony and Nintendo’s already dominant position. However, Microsoft was not ready to give up easily and ensured that Xbox would survive in the market.

According to a recent podcast, Microsoft resorted to paying developers and publishers to ensure they would prioritize Xbox as a platform.

Why it matters: This was an essential step in ensuring the survival of Xbox. Had Microsoft not taken such measures, the gaming giant may have been left in the dust during its first generation.

Peter Moore says that Xbox had to pay millions of dollars to publishers and developers to get games day one on Xbox. They were all in Sony's pockets

Source: Iron Lords Podcast pic.twitter.com/1kO69c0Dia

— PeterOvo (@PeterOvo5) August 20, 2023

During the recent episode of the Iron Lords podcast, Peter Moore, who worked as VP of Microsoft’s Interactive Entertainment Division, was featured as a guest. When discussing the history of Xbox, he pointed to Nintendo and Sony’s strong hold over the market.

Peter Moore elaborated that publishers and developers knew the majority of users would be found on Sony and Nintendo platforms. This made the recently launched Xbox console a low priority.

This meant that Microsoft had to offer developers an incentive to work with their platform. These offers usually ended up with Microsoft saying:

“If we give you $5-20 million to support your team, can we at least get day and date with the others if not an exclusive?”

Peter Moore also pointed to the failure of the Sega Dreamcast, which gave Sony’s PlayStation an even stronger position in the market.

Recent years have seen Microsoft returning to such incentives, choosing to buy publishers and developers or paying them for Game Pass deals. As a result, upcoming releases like Lies of P will be headed to the service.

The gaming giant is currently treading toward finalizing its $68.7 billion deal for the purchase of Activision Blizzard, which was recently approved in New Zealand.

This incident shows the gaming industry can be extremely difficult to break into, and Microsoft had a long and difficult road for the Xbox in 2001. However, the gaming giant continued to work with developers and eventually created its best-selling console, the Xbox 360.