October 28, 2022
Photo: David Paul Morris/Bloomberg via Getty Images
Hello, and welcome to Protocol Entertainment, your guide to the business of the gaming and media industries. This Friday, we’re looking at Xbox chief Phil Spencer’s comments during his wide-ranging interview at the WSJ Tech Live conference and what it means for Microsoft’s gaming ambitions.
Microsoft has an ambitious plan to grow its gaming business from primarily Xbox consoles to cloud services, subscription platforms, and screens of all sizes. And if the Game Pass platform is the engine to make it happen, the acquisition of Activision Blizzard is a major source of fuel.
On Wednesday, Xbox boss Phil Spencer took the stage at the WSJ Tech Live conference where he made news on a series of strategic areas for Microsoft, including Game Pass, cloud streaming, and the company’s approach to pricing. Spencer, a master of blending off-the-cuff demeanor with especially astute interview answers, made clear that while regulators are concerned over its nearly $70 billion Activision bid, the company is relentlessly focused on growing its audience beyond the stagnant console market.
Spencer came prepared to make news. Speaking to reporter Sarah Needleman, Spencer doled out some key figures and announcements around areas Microsoft is particularly focused on in gaming.
Spencer was speaking to players, but also to Sony and regulators, too. The most formidable critic right now to Microsoft’s acquisition of Activision Blizzard is the U.K.’s Competition and Markets Authority, which has expressed concern that Microsoft will use the deal to harm PlayStation.
The growth of Game Pass depends on big acquisitions. While Microsoft has a pipeline of games coming from its internal studios, many of its biggest upcoming releases are games from companies it acquired, including Bethesda’s Starfield, Arkane’s Redfall, and an upcoming Elder Scrolls installment.
Sony and regulators aren’t Microsoft’s only concern. The Xbox business faces a number of key challenges to achieving Spencer’s dream of putting Microsoft games on as many platforms as possible.
Spencer covered a staggering amount of ground in a single interview, and it’s clear Microsoft sees clear benefits in having the most high-profile public face of Xbox reiterate the company’s gaming positions amid a fierce regulatory battle.
It makes sense: If Game Pass is profitable and yet growth is slowing, perhaps regulators may see more credibility in Microsoft’s argument that it needs fresh content to expand. And if mobile is truly the next frontier for Xbox, and not just the stale console market, then Microsoft may seem less like a multitrillion-dollar tech titan bullying the competition and more like an underdog trying to play catch-up against incumbents.
It is, in some ways, a matter of perspective. But Spencer’s savvy contextualizing of the gaming business is all about ensuring that Microsoft’s point of view looks as convincing as it can be.
— Nick Statt
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