Phil Spencer Interview: Redfall Reviews, Activision Deal - Kinda Funny Xcast Ep. 137

[Deleted member 11852]

I believe if Sony didn't include backwards-compatibility this time around with PS5, that Microsoft could have dented PS5 sales greatly. Sony finally recognizing that BC was important on carrying over PS users to the next-generation and their ego-system of games/services, was the smartest move they could have done for PS5 and Sony as a whole.

Phil Spencer really should read Beyond3D because I called this back in 2019:

I voiced the same concern in January, speculating that Microsoft were forcing Sony's hand with backwards compatibility and if Sony responded it would make Microsoft's job that much harder next gen. When a new generation meant everybody's game library started over, console makers were on even footing. And this is speaking as somebody who doesn't care about achievements/trophies, some people are as wedded to that stuff as the games themselves.

I think this will bite Microsoft in the butt in the future. It may be good for consumers, but I can't see how this is good for Microsoft.

One thing I absolutely hate about this interview is this silly defeatist attitude Phil puts up in order to defend the acquisitions they are trying to do, as if buying up third parties publishers is the only thing they can do. When it's merely a bandage for a problem they have been suffering from for a long time.

The comment about not being able to compete with other company's [Sony] marketing deals is Microsoft telling the world it seemingly cannot effectively negotiate. Sony's net worth is currently valued at $144bn, and Microsoft were prepared to spent $67bn to get Activision-Blizzard.

How are Sony, a company worth a fraction of Microsoft, able to outbid Microsoft and secure these lucrative marketing deals? Phil, you and your team are doing something very wrong over there in Seattle.

 

[JPT]

Would this comments also been made with regards to the on going scrutiny, ie they are not going out and paint a rosy picture, but rather a doom and gloom one, to sway the public in the current narrative about not being able to compete without being allowed to buy ABK?

 

[Globalisateur]

I believe if Sony didn't include backwards-compatibility this time around with PS5, that Microsoft could have dented PS5 sales greatly. Sony finally recognizing that BC was important on carrying over PS users to the next-generation and their ego-system of games/services, was the smartest move they could have done for PS5 and Sony as a whole.

Not really finally as Sony already knew that important strategy and applied it when it was realistically doable. PS2, PS3 (PS1 and PS2 on first models) and PS Vita (digital PSP games) already had BC with their predecessors.

And we know why it was not possible on PS4 as Sony didn't want to again include the old console chip in the new like it did on PS2 and PS3 as it was obviously too expensive.

 

[Deleted member 11852]

They're behind Nintendo in making games for 20 years and PlayStation by 10.

Seven years for PlayStation, which launched globally in 1994/95, and Xbox in 2001/02.

 

[Nesh]

Phil Spencer really should read Beyond3D because I called this back in 2019:






The comment about not being able to compete with other company's [Sony] marketing deals is Microsoft telling the world it seemingly cannot effectively negotiate. Sony's net worth is currently valued at $144bn, and Microsoft were prepared to spent $67bn to get Activision-Blizzard.

How are Sony, a company worth a fraction of Microsoft, able to outbid Microsoft and secure these lucrative marketing deals? Phil, you and your team are doing something very wrong over there in Seattle.

Yes also Sony has less money to spend for exclusive and mergers. Not only because of size. But because their liabilities outweight their ability to meet them. Sony's current ratio is 0.62. Microsoft's current ratio is 1.91!
Nintendo's current ratio is at 4.01!
When Sony spends money on their Playstation business it is not extra money. It is high risk money they are investing hoping that their returns will be enough to improve their capacity to meet their obligations. If there is one company that has more chances of dying it is Sony. If their Playstation business goes bad, they are literally facing an existential crisis. Sony is in a desperate need for liquidity. This is why they are focusing so much on the PS business. It is their healthiest and biggest business and the only one that can improve their situation at this point. This is the real reason why they were desperate to stop the ABK acquisition at all costs.
If Sony faces another PS3 situation and MS takes the lead while owning these ex-multiplatform giants, it is going to be impossible for Sony to ever recover. They will become a high risk company that whatever they spend to recover will be borrowing money that might or might never give returns. Sony is neither a monopoly, nor a company that has the ability to buy it's success back. They are investing and planning to secure their safety.

 

[Shifty Geezer]

The comment about not being able to compete with other company's [Sony] marketing deals is Microsoft telling the world it seemingly cannot effectively negotiate. Sony's net worth is currently valued at $144bn, and Microsoft were prepared to spent $67bn to get Activision-Blizzard.

How are Sony, a company worth a fraction of Microsoft, able to outbid Microsoft and secure these lucrative marketing deals? Phil, you and your team are doing something very wrong over there in Seattle.

However, it's a position plenty of people are buying into given a narrative that now focusses on Sony's exclusivity deals as winning them the console war and MS being unable to compete. No-one ever talked about exclusivity deal advantage prior to this acquisition - exclusives were only talked about when people got pissed that companies secured various deals from timed exclusives to DLC content to second-party titles, but it was never identified as a victory strategy, "this company got that game so are going to win 10% of the market as a result" or "that company got that DLC extra level so are going to secure 10% of this generation."

But now it's all about the exclusive content, and that's a debate that's largely on faith because there's no data other than a list of exclusive content people can draw up with no idea of the situation behind that content.

As a PR move, MS appear to have managed to establish themselves as the underdog! And is that deflecting off their own failures? I kinda feel it is. Yeah, Sony's had some big advantages in Japan and maybe some content has helped, but there's way more to the argument than Sony's very limited content. Honestly, what fraction of all console gaming is a Harry Potter extra level, etc.?

I feel Question 7's response pretty telling:

We lost the biggest console generation there is to lose so when we build on Xbox, we want it to feel awesome. So if we focused on great games, that doesn't mean we'll win the console race. When people walk into a store, they're already in 1 out of the 3 ecosystems,

We've seen people transition ecosystems before. Accepting you can't sway people guarantees you won't sway people. The real reason MS isn't competing as well? Their heart just isn't in it! They're set upon cloud and streaming. They've just managed to phrase the current console market in a way designed to win points with the merger regulators. If the ABK merger wasn't happening, the entire narrative around the entire industry would be different now.

 

[Inuhanyou]

The comment about not being able to compete with other company's [Sony] marketing deals is Microsoft telling the world it seemingly cannot effectively negotiate. Sony's net worth is currently valued at $144bn, and Microsoft were prepared to spent $67bn to get Activision-Blizzard.

How are Sony, a company worth a fraction of Microsoft, able to outbid Microsoft and secure these lucrative marketing deals? Phil, you and your team are doing something very wrong over there in Seattle.

The silliest part was earlier on when people were arguing for the ABK deal saying Sony was bad at negotiating and business because they were claiming MS owning COD and having direct arbitrary control over it would hurt their business.

When Sonys latest financials actually proves them right. First party games for Sony are a good attraction for their core consumers, but a vast majority of the sales on the platform are from third party studios like activision. Infact every year CoD sells the absolute most on Playstation.


Sony has always found the most success due to courting third party publishers first, with their core first party lineup only becoming a real selling point last generation.

So it stands to reason that they would be making deals and utilizing the relationships they have built with third parties over many years as they always have.

And now that playstation makes up a significant part of their wider company than it does MS(which despite all their investment into Xbox is still largely a pet project for them), it's that much more important for them to be agressive about keeping that third party space at the very least open to all.

If I was Jim Ryan, I probably would not have been dumb about the argument and made it about the Activision business in general as opposed to just Call of duty which unfortunately infinitely narrowed the scope of Sony's viable argument, but they absolutely had a winning case that even if the deal had gone through, could have forced MS to keep ABK games on their platform indefinitely. If they had argued the right way.

 

[mr magoo]

I am a bit late to the party it seems: but I am shocked to read the answer to question 7!! I thought it is mistranslated so I wachted extra the video...I cannot believe that he actually said this infront of everyone?! I think it is absolutely untrue. I think gamers will gravitate towards nice and shiny: you make good games, gamers will follow. However, it sadly shows what is going on with Xbox and why they do not focus on killer games anymore.

I can remember the X360 days, in the beginning, where they had the absolute best games with for instance Gears (especially MP) and Mass Effect - and everyone bought a X360 and wanted to play it. All my best buddies that had absolutely no interest in gaming whatsoever - showed them one round of Gears at one time, next day all had their X360 bought with Gears. PS3 in my opinion only made the comeback when they put out some good games after all.

I truely believe (my opinion) that Xbox can easily turn the tides by focusing on super killer games, exclusives, that are show cases (also graphically). I hope they do. It is sad for me that I have nothing to really look forward to on the Xbox currently and I hope this changes as MS games in the X360 era had a certain coolness factor to them, that made the brand special imo.

You cannot win gamers without games. They launched XSX/S without ANY next gen game. Not even one! How the hell do you prioritise your work knowing that you launch new console and dont prepare anything!?!? This is not the first console they launch. Seriously WHAT THE F...!
And the other thing that baffles me is why does it take so long to develop games for MSFT studios? Since nex gen started for example Capcom has launched RE village, RE4 remake, Monster Hunter Rise, and SF6 (in few weeks). I dont count here RT remixes for RE2+RE3 and DMC5.
And they did that for PC+PS5+XBOX/S. Respawn developed Jedi Survivor in 3,5 years on PS5+PC+XSX/S soooo whats going here?

 

[Shortbread]

Not really finally as Sony already knew that important strategy and applied it when it was realistically doable. PS2, PS3 (PS1 and PS2 on first models) and PS Vita (digital PSP games) already had BC with their predecessors.

And we know why it was not possible on PS4 as Sony didn't want to again include the old console chip in the new like it did on PS2 and PS3 as it was obviously too expensive.

If I'm not mistaken, it was Sony who mentioned that PlayStation gamers weren't engaging enough with BC titles (PS2-PS3), and as such, many of the BC resources went to other key features and products. One of the reasons why later-on the PS3 hardware (and later software emulation solution) stopped supporting PS2 software correctly, and why so many PS2 games on PS3 play terrible, or simply don't work. Plus, Sony found it more beneficial and lucrative to offer prior generation titles on scaling up the PSN gaming catalog, and of course, offering remakes and remasters.

PlayStation's Long, Complicated History with Backward Compatibility - IGN

How Sony's PlayStation line went from being the undisputed champ of backward-compatible gaming to struggling to keep up with competitors.

www.ign.com

Shifts by Microsoft show that backward compatibility can gain trust by giving players access to decades-old titles, alongside the promise that every new game will be compatible going forward as well. Sony, however, has historically put the future first, opting to resell, remake, and remaster its classics rather than sorting out a long term solution to backward compatibility, covering enough of the biggest hits to keep a vocal majority happy. As Sony moves forward, it seems like it will attempt to add enhancements to the top PlayStation games, with bigger remakes in the works as well.

 

[Scott_Arm]

Microsoft wouldn’t be trying to buy activision if they didn’t think they could increase their market share. Winning the console war is a different story. It’s not likely unless Sony shoot’s themselves in the foot somehow.

 

[Nesh]

You cannot win gamers without games. They launched XSX/S without ANY next gen game. Not even one! How the hell do you prioritise your work knowing that you launch new console and dont prepare anything!?!? This is not the first console they launch. Seriously WHAT THE F...!
And the other thing that baffles me is why does it take so long to develop games for MSFT studios? Since nex gen started for example Capcom has launched RE village, RE4 remake, Monster Hunter Rise, and SF6 (in few weeks). I dont count here RT remixes for RE2+RE3 and DMC5.
And they did that for PC+PS5+XBOX/S. Respawn developed Jedi Survivor in 3,5 years on PS5+PC+XSX/S soooo whats going here?

I think the answer goes back to the why they made the XBOX in the first place.
It wasnt the console business itself that bothered them. Interviews of XBOX history are very telling.
They tried to promote Direct X and Windows CE on the Dreamcast to boost PC game support. Then they made a proposal to Sony to make the PS2 a DirectX console which was rejected.
The reason they entered the market was to block Sony from becoming an unstoppable force in the entertainment industry where the console market would be interfering with and cannibalize their Windows gaming and enertainment business. Bill Gates took notice how Sony was setting the foundations to become a broadband household device for entertainment purposes that would potentially put another OS in homes. This is the vision Ken Kutaragi had and you can put the pieces of the puzzle from Ken's interviews. You can see that vision manifest closer in the PS3 (albeit a failed one) and the Cell being originally designated for multiple purposes.
The XBOX prototypes were originally planned to be Windows boxes that would simplify PC game development and could play PC games and Gates was infuriated when his R&D team saw this as an unviable option. So the XBOX business was transformed to a more traditional device that focused on bridging game production and support between Windows and Console industries unlike Sony which was evolving the industry into one that was competing with Windows. Game development before XBOX 360 was shifting towards consoles and the Windows PC gaming was losing support.

 

[orangpelupa]

Their goal should be getting a stable amount of releases from their studios out in a consistent amount of time. This would require a lot of structural reconfiguring with their teams but it would be worth it.

Trying to "beat" Sony in areas they are clearly strong in won't work. Especially if most of your focus is taken away from outside of the console space focusing on cloud, services and trying to tangle with bigger players.

Yeah. He downplayed the important of good quality games. He also touched that people play games in the platform that their friends already are. But isn't that's no longer as important as before due to cross play?

Anyway, Surely i am not alone in buying console for the games?

I even bought Nintendo switch just to play zelda botw. Then more and more games flooding in, I even bought ring fit adventure.

Xbox no longer have must-have games. I can simply play them on pc.

It doesn't have unique kinect games. It doesn't have immersive vr games. It doesn't have haptic triggers and HD vibrators....

Heck, the last Xbox exclusive I bought a few months ago was Xbox 360 kinect your shape fitness evolved (the disc is so old, it's moldy) because my current disc is scratched to hell and no longer readable.

Sure quick resume is amazing. But that feature alone wouldn't make people want to buy Xbox IMO.

But then again Microsoft focus is in xbox play anhwhere platform, no longer in only Xbox console...

So... Why not improve the Xbox on windows?

Maybe windows 11 Xbox version, released with Rog ally?

Maybe bringing quick resume to windows 11?

Maybe fix the buggy AF windows store, or release Xbox on windows with it's own store that's much more reliable?

 

[Shortbread]

You cannot win gamers without games. They launched XSX/S without ANY next gen game. Not even one! How the hell do you prioritise your work knowing that you launch new console and dont prepare anything!?!? This is not the first console they launch. Seriously WHAT THE F...!
And the other thing that baffles me is why does it take so long to develop games for MSFT studios? Since nex gen started for example Capcom has launched RE village, RE4 remake, Monster Hunter Rise, and SF6 (in few weeks). I dont count here RT remixes for RE2+RE3 and DMC5.
And they did that for PC+PS5+XBOX/S. Respawn developed Jedi Survivor in 3,5 years on PS5+PC+XSX/S soooo whats going here?

From a gaming perspective, I believe DirectX is apart of the problem. DirectX as a whole needs a fresh start... too much legacy code on supporting prior game titles. There is a reason why DirectX 12 isn't living up to what was expected feature and performance wise. I'm not trying start the "tools" argument again, but Microsoft trying to consolidate PC gaming and console gaming under one development environment (GDK) could potentially be creating some problems, especially for day-1 Xbox titles on PC and Series consoles.

 

[Shifty Geezer]

And now that playstation makes up a significant part of their wider company than it does MS(which despite all their investment into Xbox is still largely a pet project for them)

MS got into consoles because they feared the console would become the home content gateway (first they wanted to be the OS, and when the console companies rejected them, decided they needed their own hardware). That didn't happen, with the development of mobile and smart TVs coming from nowhere. Now they don't know what XBox is to them and I think that's obvious with how it's been operated since its 360 hey-day when MS were still invested in the idea. Now looking at gaming as a revenue generator, Xbox is meh to Spencer. He wants MS gaming, branded Xbox, where the console isn't that important other than for branding I guess, and his heart isn't in pushing hardware. He's told us as much! "Sony sells more than us. But honestly, we don't care because console gaming isn't all that and Sony and Nintendo have it covered."

Whereas for Sony, PS is a economic pillar of their business so they just run it better! They can't afford it to fail. And to their credit, they've done a good since PS1 and won a lot of fans inside the developer community as well as outside (and lost goodwill betweentimes with PS3). eg. Healy and Evans came from working directly under MS at Lionhead to founding MM. They created a prototype, went to Sony, not MS, Harrison loved it and won them over. That's just business! We can point to Sony "acquiring" Media Molecule, but they basically befriended the devs who clearly weren't enamoured enough with MS after years working for them to give MS the opportunity.

 

[orangpelupa]

One thing I absolutely hate about this interview is this silly defeatist attitude Phil puts up in order to defend the acquisitions they are trying to do, as if buying up third parties publishers is the only thing they can do. When it's merely a bandage for a problem they have been suffering from for a long time.

No one should believe that when a ton of these silly rookie mistakes MS is doing is their own fault and no one else's. It's not Sonys success in the video game market which forced MS to launch redfall like this and not put out a single big game for the past 18 months. It's just not the case.

MS has the capability to make good games, but their teams are not organized enough to put them out beyond Forza and gears at a stable and consistent rate. Especially with 343 being so mismanaged as it is. The smaller games are great but that shouldent be all there is.

They should have bought bungie back, outbidding Sony. Instead of bungie becoming part of Sony now.

Bungie is a mess. But at least they consistently release stuff that are still passable as a minimum viable product to keep destiny addicts getting their fix.

Make some of the team to work together with 343i to release an even bigger destiny (like when bungie was helped by 7 different Activision studios), or work together to make a new and better halo.

While keeping the mysterious project with tencent alive (it's supposedly will be a mobile phone game, so it would help Microsoft reach in that space)

 

[Inuhanyou]

I'm buying series S for the games I've missed out on in Xbox one era, old Xbox and 360 titles, as well as new Bethesda games like hi fi rush and stafield. I will buy a switch 2 for all the switch games I've missed out on.

Anyone who says you don't buy into a platform for it's games is playing a weird rhetorical trick on you

 

[Shortbread]

They should have bought bungie back, outbidding Sony. Instead of bungie becoming part of Sony now.

I don't think Bungie would have wanted to be under MS leadership again (a been there, done that situation).

 

[iroboto]

Their heart just isn't in it! They're st upon cloud and streaming. They've just managed to phrase the current console market in a way designed to win points with the merger regulators. If the ABK merger wans't happening, the entire narrative around the entire industry would be different now.

I’m looking at it from a pure data perspective. If I categorized every single game into a data table with release the number of platforms on release, what those platforms were, what the game was targeting in terms of game type and graphics, and release quality.

I’m nearly 95% positive that Machine learning would look at all of those features and return that releasing your game day one with PC is arguably the largest factor that’s going to bring down your quality score and your overall game score.

It’s a trend across the whole industry and the only games not affected by this additional burden are exclusive titles.

There’s only a handful of studios consistently capable of delivering a fully polished multiplatform release with incredible graphics and unsurprisingly, MS is trying to gobble that talent up because they are struggling to have enough of it.

Everyone is dying metaphorically. It would be a lie today that Naughty Dog isn’t dying, they are too. They just don’t have to release on as many platforms as multi platforms do.

https://twitter.com/x/status/1238199242256052224

People are kidding themselves here expecting every game can be a banger in todays world. I largely suspect, on the average, across the industry, games are failing to deliver in comparison to previous generations.

At the end of the day, MS has chosen the play your games on any device agnostic path. That is going to be an uphill battle for them for a very long time. And if I were to catalog of MS best times with first party titles, they were nearly all released before they switched to release day 1 with PC.

 

[orangpelupa]

I don't think Bungie would have wanted to be under MS leadership again (a been there, done that situation).

Most of bungie are new blood, so they mostly hasn't experienced how it is under MS.

But yeah, many of key persons are still from the Microsoft era.

I wonder if they feel Sony will reign them in / give them more concrete direction / more hands on.. And they want that kind of relationship?

As iirc from interviews, Microsoft was pretty hands off with bungie.

 

[mr magoo]

From a gaming perspective, I believe DirectX is apart of the problem. DirectX as a whole needs a fresh start... too much legacy code on supporting prior game titles. There is a reason why DirectX 12 isn't living up to what was expected feature and performance wise. I'm not trying start the "tools" argument again, but Microsoft trying to consolidate PC gaming and console gaming under one development environment (GDK) could potentially be creating some problems, especially for day-1 Xbox titles on PC and Series consoles.

But then all studios working with it would have issues. And looking at capcom and respawn examples others are managing. So I don’t think DX is the problem here.