When Xbox announced a new feature last month that lets you digitize existing physical game collections, I immediately thought of the Xbox One. Disc-to-digital seems like a clever new feature for Xbox, perfectly timed as a response to Sony killing PlayStation discs. But the reality is that it has been 15 years in the making and is now a big part of Xbox’s ongoing game preservation efforts.
Ahead of the launch of the Xbox One in 2013, Microsoft made a key decision to uniquely identify discs. Sources familiar with Microsoft’s plans tell me the company was exploring the idea of true Xbox digital ownership in 2011, including digital gifting, recycling digital games, and the ability to swap discs at retail stores in exchange for a digital version. Some of those original Xbox One plans leaked out online, and many others have remained secret for more than a decade.
Microsoft’s Xbox One launch hinted at some of these ideas, too. The console was originally supposed to be always online, to enable Microsoft’s vision of digital game sharing, and more. Microsoft walked back those plans after a messy and confusing Xbox One launch created a backlash to the always-online requirement. But some of those original digital ideas are now starting to come to life in different ways.
Microsoft’s decision to essentially embed a serial number on the discs that Xbox consoles can read has allowed it to launch disc-to-digital, a method that lets you turn a physical Xbox One disc into a digital copy simply by slotting it into a disc drive. A decision made 15 years ago has resulted in this useful feature and may well lead to true digital ownership in the coming years.
It’s not something Sony can copy, either. Unless the PlayStation maker has been quietly adding metadata to its discs over the years, it will have to find another method to help PS5 owners move their physical collections over to the digital era.
Microsoft thought ahead, not necessarily to disc-to-digital, but just about identifying discs so it was ready for when console games moved into an all-digital era. That era looks like it’s right around the corner, especially now that Sony has announced it’s killing PlayStation discs in 2028. Both Microsoft and Sony also ship digital-only variants of their consoles, and it’s clear from game sales numbers that most titles are purchased digitally these days.
I fully expect Microsoft to follow Sony and eventually scrap Xbox discs, especially as the number of authorized manufacturers capable of producing physical media continues to shrink. That’s largely because almost every other form of media, from music to movies, has moved on from optical discs. The big difference with Xbox, though, is that Microsoft has always been obsessed with game preservation.
In the same year that disc-to-digital is launching, Microsoft is also bringing original Xbox and Xbox 360 games to PC. The company has also spent years working on its backward compatibility program, to get as many games from the Xbox and Xbox 360 eras working on modern Xbox consoles. Game preservation is a central part of Project Helix, the next Xbox that could play every Xbox game ever made.
It’s not an easy task to pull off game preservation, either. There are the complex technical challenges that need to be overcome, alongside licensing issues and the business challenges from publishers that decide how a game should be sold.
Some of those technical challenges mean that not every single Xbox One disc will work with this new disc-to-digital feature. That could be because some early discs simply didn’t get pressed with the unique identifier. Microsoft warned its internal Xbox testers that “it all depends on how and when the disc was manufactured and it may not have the features we need for this program.”
Discs that are slightly damaged might also not work with disc-to-digital, but run just fine otherwise. That’s why it’s important that Xbox is launching this right now — physical media decays over time.
The licensing and business challenges are far more complicated. Publishers need to agree to disc-to-digital, and some could hold back. It appears that most are on board, and even Ubisoft games started showing up recently. We’ve seen a number of other games come online since Microsoft’s announcement, and the company has been clear that more will follow.
The next challenge beyond disc-to-digital is solving digital ownership. If all we really own of a digital game is a license, I hope that one day those licenses can move freely across devices and platforms. I want to buy a single copy of a game and have that license follow me across Xbox, PlayStation, Nintendo, and PC. I also want to be able to gift or sell that license on different marketplaces, just as we’ve been able to do with physical discs at retailers for decades.
Microsoft envisioned this true digital ownership future 15 years ago, and it has gradually taken steps toward making it a reality. I hope Xbox can eventually pull it off, but the solution will require publishers and platform owners to agree on a shared system for how game licenses are bought, transferred, gifted, and resold. That’s a much bigger challenge than simply getting rid of the disc.
- Microsoft announces Windows and Surface event for October 7th. Microsoft is heading to San Francisco next month, and I’ll be there too. More than two years since the last major Windows event, Microsoft is holding a Windows and Surface event that will include a “conversation on how local AI will shape the next chapter of the PC.” Microsoft CEO Satya Nadella will be in attendance, alongside Windows chief Pavan Davuluri. The surprise guest? Nvidia CEO Jensen Huang. I wouldn’t be surprised if this event is mainly focused on RTX Spark PCs, and don’t be surprised to hear more about the Microsoft Surface Laptop Ultra pricing and availability.
- The Gates Foundation says it’s spending $1 billion to expand access to AI. Over the next two years, the Gates Foundation plans to spend at least $1 billion on improving access to AI in education, healthcare, and agriculture. The funds will go toward creating AI datasets in more languages and making AI access more affordable.
- Microsoft says ‘people matter more than AI’ following safety concerns. Microsoft published a 37-page AI code of conduct this week, in the midst of researchers warning that AI progress could outpace human control. Microsoft’s AI code of conduct makes it clear that “people matter more than AI,” and that AI models are not conscious and “should not be designed to imitate consciousness.” That’s a direct swipe at Anthropic, which has been pushing the idea of AI welfare and model consciousness lately. The code of conduct also commits to ensuring Microsoft’s own models will remain under human control and discourage “patterns of interaction that cause excessive reliance or emotional dependence.”
- Microsoft adds Grok to Word, Excel, and PowerPoint. Microsoft added SpaceXAI’s Grok models to its Foundry service last year, and now it’s expanding access to Copilot itself. Grok models can now be used in Word, Excel and PowerPoint from the model picker interface for Microsoft Frontier users. Microsoft says it’s starting with a preview release to “gather feedback.” This means Office Copilot users can now pick between OpenAI’s GPT models, Anthropic’s Claude models, and SpaceXAI’s Grok models.
- Microsoft issues emergency Windows 11 update to fix its record-breaking patch. Last week I reported on Microsoft’s record-breaking patch Tuesday, and it turns out that this giant set of fixes has caused some issues. Microsoft has had to release an out-of-band patch to fix folder shares on Hyper-V-based Linux virtual machines, Remote Desktop Services sessions, and some USB audio devices. These out-of-band updates used to be a rare occurrence, but there have already been eight this year alone. With AI models continuing to spot even more vulnerabilities in Windows, I can’t see this all slowing down anytime soon. In fact, I wouldn’t be surprised if October’s patch Tuesday breaks another record.
- BlizzCon delivers the return of StarCraft, Diablo on Netflix, and Diablo V. StarCraft is returning in 2030, after more than decade of lying dormant. The new title, announced onstage at BlizzCon last weekend, will be an open-world shooter instead of a top-down real-time strategy game. Blizzard is also working on a new animated series of Diablo with Netflix, and teased that Diablo V is coming in spring 2029.
- Microsoft is finally adding a setting for remapping the Copilot key. If you picked up an Arm-powered Copilot Plus PC over the past years, you may have noticed the new Copilot key that launches Microsoft’s digital assistant. The latest Release Preview builds of Windows 11 add a setting to change the AI key back to a control or context menu button, so you don’t accidentally hit it and launch Copilot.
- Microsoft’s head of comms is leaving after almost 20 years. Frank Shaw, chief communications officer at Microsoft, is leaving the company at the end of the year. Shaw has been at the heart of Microsoft’s communications for 29 years — nearly 20 years as a Microsoft employee plus time at an external agency before that. He’s well-respected across the public relations industry, and has earned a reputation both inside and outside Microsoft as someone who is direct but respectful. Many employees have told me over the years that they always fear an email from him for misspeaking or accidentally leaking product plans. Microsoft hasn’t appointed a replacement yet, but it sounds like a successor will be named in the coming weeks.
- Xbox picks up Kojima’s Physint after PlayStation dropped it. Xbox will now publish Physint, an upcoming game from Metal Gear creator Hideo Kojima, after PlayStation decided to cancel it. The unexpected swap came in a flurry of announcements from PlayStation, Xbox, Kojima Productions, and Kojima. While PlayStation framed the swap as a “difficult decision to step away from collaborating with Kojima Productions,” Kojima revealed it was actually due to an unexpected cancellation notice for Physint in June. The swap now means Xbox is publishing the studio’s next game, OD, as well as Physint. It’ll be interesting to see what exclusivity decisions are made here.
- Xbox is bringing back startup animations from its console history. Microsoft has started testing a new Xbox console feature that lets you enable the original Xbox One or Xbox One X boot screens on an Xbox Series S or X console. The update also includes a new search feature, improved Remote Play quality, and clearer voice chat. It’s great to see Xbox continue on its regular monthly console updates.
- Microsoft has new AI privacy rules for schools. Microsoft agreed to a set of safety and privacy principles for AI in schools a week after two major school systems announced a ban on student-facing AI. The agreement with the American Federation of Teachers (AFT), the second-largest teachers union in the US, sees Microsoft commit to 10 principles that can be contractually enforced. This includes limits on the amount of data Microsoft collects from students or educators and a pledge not to train AI models on this data. New York City and Los Angeles have both implemented one-year bans on AI tools for lots of students, giving the districts more time to consider guardrails.
- Microsoft’s Windows chief wants to remake Windows for both human and agent users. Pavan Davuluri, head of Windows and devices at Microsoft, caused some controversy when he tweeted last year that Windows was an agentic OS. That made many think Microsoft was abandoning Windows users in favor of AI, but Davuluri is now making things a lot clearer in an interview with GeekWire’s Mary Jo Foley. “The user of Windows going forward will continue to be users … but it’s also going to add these agentic workloads,” said Davuluri. “There is no one single sort of ring for a billion-plus users on the platform.”
- Blizzard workers secure a major union contract. The nearly 1,900 workers across Blizzard have secured a contract with Microsoft that include “really strong” layoff protections. The World of Warcraft unit had to fight for a contract, and the teams that work on Overwatch, Diablo, quality assurance, and more helped put the pressure on to extend the union contract to all Blizzard employees. It comes just two months after Xbox announced significant layoffs that will impact 3,200 employees over the course of the current financial year.
- The woman fixing a Microsoft mess with brutal honesty. The Wall Street Journal has published a profile of Xbox CEO Asha Sharma. It’s mostly a recap of Sharma’s career and how she got the top Xbox job, but it also includes some funny anecdotes. Surprisingly, Sharma spends a few hours each month personally responding to Xbox customer support tickets to better understand players. Since becoming Xbox CEO, she’s also received wedding invitations in the mail, presumably from the same fans that paste her face on images of Jesus Christ.
Note: There won’t be a Notepad issue next week as I’m out for part of the week.
I’m always keen to hear from readers, so please drop a comment here, or you can reach me at [email protected] if you want to discuss anything else. If you’ve heard about any of Microsoft’s secret projects, you can reach me via email at [email protected] or speak to me confidentially on the Signal messaging app, where I’m tomwarren.01. I’m also tomwarren on Telegram, if you’d prefer to chat there.
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