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Xbox chief says game on: 'I'm focused on winning'

Microsoft was criticized after its E3 media event barely mentioned the Kinect motion sensor or new TV initiatives. But the Xbox maker had its reasons.

Microsoft's Phil Spencer says Xbox is "not winning today, so I'm focused on winning." James Martin/CNET

LOS ANGELES -- Phil Spencer is laser-focused on games for this holiday shopping season.

The new head of Microsoft's Xbox group, who was named to the position in March, said in an interview at the Electronic Entertainment Expo here that he has been working to bring focus to the team, particularly for this upcoming holiday shopping season.

"I wanted gamers, Xbox fans, and everyone else to know we are a games-led platform," he said.

That was underscored by Microsoft's E3 media event Monday, during which Spencer and his team showed more than two dozen games over the period of an hour and a half, including crowd pleasers like an update to the Halo space-age war games and a new racing title from its Forza series.

While the company claimed this represents the best lineup of titles in its history, it's unclear if the market agrees with its message.

When Microsoft's Xbox One video game console launched in November of last year, sales were swift. The device sold more than 1 million units in its first 24 hours on the market, the best launch in the company's history. But Microsoft has since fallen behind its rival, Sony's PlayStation 4, which hit store shelves a week earlier than the Xbox One.

Microsoft in April said it had sold more than 5 million units to retail shops since Xbox One launched. Sony, meanwhile, has said it confirmed more than 7 million units had been sold to consumers over a similar time frame.

The Xbox maker has shifted position in response.

Its Kinect motion sensor, which had launched as an accessory in 2010, was a mandatory purchase with the Xbox One in 2013, contributing to a price tag of $499, higher than Sony's $399 sticker price for its PlayStation 4. Last month, Microsoft said it will offer a version of its Xbox One for $399 by removing the Kinect from the packaging and selling it separately.

Spencer is enthusiastic about video games. As the former head of Microsoft's game-making division, he says he makes a point of playing every title his company creates, and often plays those by competitors as well.

He also recognizes Microsoft isn't at the top of the heap right now.

"We have a lot of work to do," he said, adding that his team has identified its lineup of games as its biggest strength this year. "I'm never going to look at being in second place and say I'm fine."

The message within his organization has been to focus back on core customers, a stark contrast from the company's marketing message last year that discussed games in addition to television capabilities, video chat, and other functions. Spencer said the customers he will target this holiday are the ones who have so far sat out because the games haven't compelled them to buy.

No rush to virtual reality or set-top boxes

Spencer said he's intrigued by virtual reality technology, an effort Sony plunged into when it announced its Morpheus goggles in March. Facebook, the social-networking giant, surprised the industry when it purchased Oculus VR, the virtual reality headset maker, shortly after that for $2 billion.

But Spencer isn't convinced the devices appeal to the mass market yet.

The same goes for streaming-media set-top boxes -- like the one Sony talked up on Monday. The PlayStation TV, as it is called, will retail for $99, with a catalog of nearly 1,000 games on tap in addition to other capabilities streaming video and entertainment.

Spencer said he's unsure what price point is the right one, noting that Google's Chromecast streaming device, which also plugs into a television, costs $35. Roku, another competitor, sells its device for as little as $49. And both Apple and Amazon sell their respective devices for $99.

Microsoft has quietly worked on its own set-top box, but so far has yet to bring it to market.

Right now, Spencer said, Microsoft is focused on the devices it does make, and getting back to the top of the sales chart.

"I'm not winning today, so I'm focused on winning," he said.