Xbox has a content problem: There are simply too many games.
In a recent announcement explaining a major restructuring of Xbox, Microsoft described just how much the market has changed:
“Since 2018, we have aggressively expanded our studio portfolio while the number of games created each month across the industry now outpaces the last ten years combined.”
For years, Xbox pursued a straightforward strategy for growth: create more and better games. It acquired more studios, invested more money in development, expanded its portfolio, and distributed those games across more platforms.
The underlying assumption was that a bigger portfolio of better games would attract more players and produce more revenue. If Xbox could create enough great content, it could win. In other words, Xbox thought it could ContentMaxx its way to growth.
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But while Xbox was investing in more content, everybody else was creating more content too. According to Microsoft, the number of games created each month now exceeds what the entire industry produced over the previous ten years combined.
Against that backdrop, Xbox says its investments “did not grow at the pace we expected.”
When everybody can make more content
That's the problem with ContentMaxxing. More and better content doesn't give you a sustainable advantage when your competitors can also respond with more and better content.
You invest more in your content, while your competitors invest more in theirs. New competitors enter the market with even more content. The amount of content keeps growing, but the amount of human attention available to consume it doesn't.
That's the Content Arms Race: Everybody pumping out more better content in an attempt to capture attention, and in the process dividing that attention even further.
The only way to escape the Content Arms Race is to find something beyond content to monetize. And Microsoft's announcement shows us what that could look like.
Minecraft generates Community Revenue
Microsoft wrote:
“Mojang and King… have increasingly become platforms and are our largest by monthly active players.”
Mojang is the company behind Minecraft. While Mojang creates the game, a lot of what keeps people coming back comes from what the players do with each other.
Players build things together, run servers, share their creations, and form relationships. Some pay for Minecraft Realms, which gives them a private space where they can play and build together.
There's also a marketplace where creators can make worlds, maps, skins, and other experiences that other players purchase. Mojang doesn't have to create all of the value itself.
It creates a space where players can create value for each other, and Minecraft generates revenue by cultivating that community space.
That's Community Revenue.
You don't have to create all the value
There's a useful lesson here for content creators. When you're used to building an audience, it's natural to assume that growth requires you to keep creating more and better things for that audience.
But once you've attracted the right people, you can also look for ways to help them create value for each other. They might share what they know, help each other solve problems, collaborate, or simply develop relationships with people who share their interests.
That changes the role you play. Instead of constantly hoping the next piece of content earns their attention, you can create a space that gives people a reason to participate and come back.
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