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It's no surprise that the broader tech industry has largely moved away from physical disks to digital subscription-based models. But Microsoft's Gaming CEO Phil Spencer says Xbox isn't trying to do away with disks just yet—even though making disk slots could become challenging in the future.
"Our strategy does not hinge on people moving all-digital," Spencer said in a recent interview with Game File. "Getting rid of physical, that's not a strategic thing for us."
While Spencer implied that disk slots have become somewhat old-school at this point, Xbox consoles will continue to offer both disk-compatible and diskless options if gamers still want to choose. Xbox hasn't confirmed yet whether the previously leaked diskless Xbox refresh of the Series X console is still coming, though.
"Gaming consoles themselves have kind of become the last consumer electronic device that has a drive," Spencer conceded, calling it a "real issue."
Because so few manufacturers are still making physical disk slots, it's possible making consoles with them could become cost prohibitive in the future.
"When you think about cogs that we're going to go put in a console—and as you have fewer suppliers and fewer buyers—the cost of the drive does have an impact," Spencer said.
The number of Xbox console gamers has also stagnated over the past five or six years compared to PC and cloud gaming, the executive said.
"I don't think we're doing a good enough job finding new players," Spencer said, adding that Xbox consoles are in about 200 million households globally.
While Spencer claimed that cloud gaming is finally starting to see some growth, it's an inherently different market from physical consoles. Cloud gaming is ideal for those with smaller or less powerful devices with an internet connection, while consoles can pack higher-resolution graphics and lower latency for players willing to spend hundreds of dollars on a dedicated gaming console.
For hardcore Xbox console fans, it's unlikely disk support will last forever—but for now, it's here to stay.