A bit cynical, but I can certainly see why they would be. And while it may turn out that way, I'm seeing a different trajectory for MS.
I see Microsoft Gaming potentially following in the footsteps of MS productivity software groups. That means eventually embracing all platforms regardless of how outsiders think that might impact Microsoft's bottom line.
In the earliest days of MS, the OS was the bedrock of the company WRT revenue and profit generation and it's still a large part of that. However, despite that they committed fairly early on to releasing their Office products and other productivity products on MacOS machines.
Of course, back then when MS was still a cutthroat company, MacOS represented little threat to the company. Fast forward a few years and Linux becomes a serous threat as it eats away at the more lucrative server and commercial revenue streams. Fast forward some more years and suddenly Android and iOS become very serious competitors to Windows OS.
So, first things MS attempted to do? Isolate and compete head to head by extolling the virtues of Windows, keeping their products off of those platforms and even going so far as to buy Nokia in an attempt to offer a competing MS products for smartphones. All attempts to limit or blunt the effects of rivals to its lucrative Windows revenue.
But then something interesting happens. As MS did with the MacOS ecosystem, they've mostly embraced those competing platforms. Linux is now a first class or almost first class citizen in Windows. Android is starting to get to that point as well. If MS could allow iOS to be installed within Windows they would likely do that as well. They now offer their productivity suites on Android and iOS devices and have for years. Their productivity suites are availble in the cloud making it available across all competing platforms (OSes).
All of that comes at some cost to the Windows OS revenue stream, but MS sees benefits to having as much of their products available across as many platforms as possible regardless of its impact on the Windows OS.
That brings us to gaming. We see a similar trajectory here, albeit still at the stage where many MS games are still limited to certain platforms (Xbox consoles and PC). But we do see some outliers like Minecraft, Minecraft Dungeons, Ori and the Blind Forest and Cuphead appearing on NSW. At one point Phil Spencer talked about potentially allowing more MS games on Nintendo platforms, although he's gone quiet on that front recently.
We see Microsoft Game Studios games made available in the cloud, allowing them to be run on any platform that allows a client to be installed on it or has a performant browser capable of streaming it in a browser. Basically MS has already committed to allowing its competitors to have Microsoft 1st party games on their platforms if they want it.
The only holdout now WRT Microsoft games completely following in the footsteps of Microsoft Productivity software? Native gaming in competing OSes (hardware ecosystems like competing consoles). I see that potentially changing in the future as well.
But, that change hinges on one thing, IMO. Getting Game Pass and the Xbox Cloud Gaming client on competing hardware.
Making console hardware (R&D and selling at cost or at a loss) is expensive and making a profit is predicated on locking as many consumers to your platform as you can manage. MS (the corporate entity) likely either [a] wants out of the console hardware business or have it transform into a premium hardware tier (like Surface devices compared to OEM PCs) which can potentially be sold at a profit at the cost of a smaller console hardware footprint in terms of install base.
But there's another play being made here WRT to a future where their games appear on any platform capable of running their games. And that is Azure. If they can also leverage that into increased usage by game developers then that's a win in their competition with Amazon and Google cloud services. An even bigger win would be getting Sony and Nintendo to switch to using Azure for all their backend internet services.
Looking at the Activision-Blizzard acquisition, it (IMO) makes a lot more sense if the long term play is getting Game Pass, Xbox Cloud Gaming, Microsoft Games and Azure adopted on all gaming platforms. For Azure that would be in terms of increased adoption across gaming platforms as it's already available to any developer that wants to use it on any platform.
Currently Microsoft Gaming is the outlier when it comes to how Microsoft operates in the modern day. It's one of the few Microsoft Products that is still somewhat limited in terms of what platforms it's available on. I see Microsoft wanting to eventually align that with how their other software groups operate.
Regards,
SB
