Microsoft’s Phil Spencer seems a little down when talking about Xbox’s performance.

Speaking to Kinda Funny Games, Spencer said that while the company isn’t in the business of “consoling Sony or Nintendo,” there’s no real solution or win for the company.

Because of this, and sitting in third place, instead of waging a console war, Microsoft decided to instead focus on the cloud and subscription services like Game Pass with its new generation of consoles.

“The truth is when you’re third in the console market and the top two players are as strong as they are and in certain cases are very discreetly focused on doing business and other things that make Xbox hard for us as a team — that’s up to us, not anyone else,” Spencer said.

While Microsoft is focused on creating great gaming experiences for Xbox users, Spencer says the company recognizes that it can’t win against Nintendo or Sony using traditional console strategies.

“I see it out there. I see comments that if you just made great games, everything would be reversed,” he said. “It’s just not true that if we go out and make great games, you’re going to suddenly see a dramatic shift in console shares. We lost the worst generation to lose, the Xbox One generation, where everyone built their digital gaming library.

“This idea that if we just focus more on making great games on our console, we’re going to win the console race somehow, I don’t think that fits most people’s reality.”

While the console is the core of the company’s Xbox segment, Spencer said that its competitors sometimes give the console team a hard time as a whole.

“We’re not in the business of comforting Sony or Nintendo. There’s not really a great solution or win for us.

“But I know some people want to paint us as a better green version of what the blue guys are doing, and I’ll just say there’s no gain for Xbox by staying in someone else’s wake.” We need to go out and do our own thing with Game Pass, with the stuff we do with Xcloud and the way we develop our games.”

All in all, Spencer seems bullish on devices that allow consumers to play purchased games on various devices like consoles, PCs, and handhelds like Steam Deck. While that’s wonderful, Spencer said not to expect Microsoft to forego the console market to focus entirely on vaping.

This is especially true as 90% of console buyers are in the camp they prefer, be it Nintendo, PlayStation or Xbox; Also, it’s not profitable for consumers to buy a console that doesn’t allow them to transfer older games to the newer generation.

“This is the first generation where the big games they play are games that were available in last generation if you think about Fortnite, Roblox and Minecraft,” Spencer said. “The continuity from generation to generation is so strong.

“I see a lot of pundits out there wanting to go back to a time when we all had cartridges and discs and each new generation was a clean slate and you could switch the entire console share.

“It’s just not the world we’re in today. There’s no world where Starfield is 11 out of 10 and people are selling their PS5s. That will not happen.”