Xbox VR Strategy: What’s Going On?

Xbox VR Strategy: What’s Going On?

Microsoft may have yet to throw its hat in the ring for console VR with any conviction, but all the signs point to VR coming to its forthcoming Project Scorpio, due out this time next year. During this year's E3 presentation, we were thrilled to hear Phil Spencer, Head of Xbox declare that, “The next step change for gamers and developers must deliver... high fidelity VR”. But then, Microsoft also made the ridiculous claim in a teaser video just seconds later at the same event that Project Scorpio would have, “The highest quality pixels that anybody has seen.” So you’ll excuse us for being skeptical...

Phil Spencer, Head of Xbox at E3 2016

With hardware already in production to meet a release date of ‘holiday 2017’, Microsoft is confident that the Scorpio will be, 'The most powerful console ever built.' The released specs show that Scorpio will have an 8-core CPU alongside a GPU capable of 6 TFLOPs (Trillion Floating-point Operations Per Second). That’s only 0.5 TFLOPs behind Nvidia’s GeForce GTX 1070, which is already proven as a great choice for a VR graphics card on PC.

Impressive specs for the next Xbox console make for a great VR system!

Designed As VR-Capable

With Microsoft HMD’s available from third party manufacturers at around the same time as their new console, it’s exciting to think that Scorpio could be a viable VR system out of the box on release.

Microsoft VR HMDs will be manufactured by HP, Dell, Lenovo, Asus and Acer.

Most of these things I’m playing now feel like demos and experiments.
Phil Spencer

Exciting, certainly – but is that a realistic expectation? In a recent interview with Stevivor, Spencer said that, “We designed Scorpio as a VR-capable console.” Great! But then he went on to say, “Whether that happens this year, next year or the year after… It’s so early, I think we’re a couple of years before we’ll really see [VR] hit mainstream.”

Spencer owns both Rift and Vive and believes that, “VR will find its spot in gaming; I would make that bet.” But he’s less enthusiastic about the VR games that are already available saying, “I don’t think the creators in the game space have perfected the craft of building VR games. Most of these things I’m playing now feel like demos and experiments. I think it will take time.”

The hardware may be in production, but this is all we've seen of the internals.

We will focus our first party efforts on Mixed Reality.
Phil Spencer

Cut The Cables

In the same interview, Spencer was similarly skeptical about existing tethered hardware saying, “The idea that I’m going to put on a head-mounted display and have a wire hanging out the back of my head that connects to some box in a room [is wrong]. It’s gotta go away. Most non-core gaming people are not going to do that. We need untethered solutions.”

Looking further into the future of Microsoft’s VR and MR hardware, Spencer said, “With HoloLens, we picked where we think the tech’s going to be in ten years.” Well, that would explain the four-figure price tag today...

Microsoft might be partnering with hardware manufacturers to produce VR headsets now, but Spencer is clear where the company’s focus lies, “We will, as a platform company, focus our first party efforts on something more in a mixed reality world with the belief that that’s where this all plays out eventually.”

The beating heart of Xbox Project Scorpio brings true 4K gaming to console.

Learning From Mistakes

Working with third party hardware manufacturers to produce its VR headsets enables Microsoft to neatly sidestep the hardware production costs for a medium that has yet to establish itself in the mass market and demonstrate profitability.

Could it be that the Redmond company is reluctant to repeat the mistake it made with Kinect on Xbox One, where user apathy led to the unit being removed from retail bundles to achieve an aggressive price point for the console alone?

Xbox One: did bundled Kinect hinder early sales?

Microsoft isn’t quite on the sidelines for this playoff, but it’s hardly going for MVP in the VR Superbowl with this strategy.

Sporting Metaphors

While some are of the opinion that by delaying its entry into the sector, Microsoft has handed Sony the console crown for VR, it also has the benefit of seeing how the audience develops before committing itself to an unproven technology. Long term, Microsoft knows that not only does MR have more real-world applications, but it also requires more computing power – something they know a thing or two about.

Are they playing the long game by building on their advantages over competitors with HoloLens, while watching and learning the related lessons that VR will offer as it develops? Microsoft isn’t quite on the sidelines for this playoff, but it’s hardly going for MVP in the VR Superbowl with this strategy.

A wait-and-see approach may not be the enthusiastic thrust for VR that we’d hope for from one of the biggest tech companies on the planet, but it makes a lot of commercial sense. Maybe Microsoft has an eye on the overall championship and not just the divisions...


Managing Editor

Steve is an award-winning editor and copywriter with nearly 25 years’ experience specialising in consumer technology and video games. He was part of a BAFTA nominated developer studio. In addition to editing, Steve contributes to,, and, as well as creating marketing content for a range of SMEs and agencies.