Xbox Business Update Podcast | Xbox Everywhere Direction Discussion

[Shifty Geezer]

1) buy studio X with developer Y
2) developer Y creates most beloved and highest rated new Microsoft IP in years
3) fire developer Y
4) ????
5) profit

^ this makes more sense to you?

Certainly more sense. There's logic here, where MS has said they want to focus on big IPs. Your post is nonsensical on every level. I can't see how any negotiation and agreement could happen where MS is worse off with a developer being successful. And then closes them down to not pay out dividends - how much would those payments have to be for MS to figure closing the studio and losing all its future earnings is better value??

 

[rntongo]

Phil's comments were taken out of context. He was lamenting about how locked to platforms everyone came out of last gen and how great games even don't ensure people will switch platforms. It was all blown out of proportion.

Respectfully I disagree. The criticism was taken within context. The interview was taken in the immediate aftermath of Redfall's launch. Where are the great games, where are the system sellers, these were the questions and he just dismissed them. If Xbox was delivering hit after hit but not bringing in more consumers into its ecosystem he would have had a point but that wasnt the case. He was not in a position to say that especially immediately after the launch of Redfall. That was the context. He was essentially saying "Currently there's this Redfall title that consumers dont like at all but great games dont even move customers anyway because we already lost the generation when we could have locked in the customers". So why did I pay for GP and buy a Series X? He could have said this at the launch of the Series X instead of promising bangers then switching his mind later on. It means he was simply making things up as he goes.

I agree with Ybarra that consistent AAA games are important, but don't agree that a hybrid strategy can't work. I think it's a tough needle to thread, but I don't have a problem with Sony PS users paying for GP Day One games 2-3 years after the fact. Give me Gears 6 on GP in 2026 and put it out as a PS6 launch title in 2028 or 2029. Fine by me. In fact, I think MS should message that to Xbox owners - "You're privileged and get it on GP Day One" and PS users - "Sorry, but you have to pay since Sony won't let us give you GP even though we really want to."

Its a matter of survival at this point. I agree with you that they should deliver more AAA consistently and this requires long term planning since such titles take longer to make these days. I also agree that ideally they shouldnt be releasing new titles in the same year on Playstation but at the moment they have atrophied their brand so much they need to at least in the medium term put their games on multiple platforms including Playstation to earn more.

They have to reestablish trust with Xbox fans through consistency though. If hardcore Xbox fans really believe that Sony PS users are getting the late ports of big Xbox GP titles I don't think they'll care in the end, but they have to believe that Xbox is going to thrive. New powerful hardware announced would accomplish that IMO. Show off an amazing Gears 6 and Fable that runs well on X, but really shines on X+ for 2026. Also bring out the M with full S compatibility. That'll shut up the "Xbox is leaving the business" people.

Yes they really need this. But I dont think adding another hw system in 2026 or this gen is smart. Considering hw bad current sales are for the S/X, and soon lower PS5 prices are going to make this much riskier. I remember when they announced the S I said this two consoles at the same time strategy is going to cause all sorts of issues. If they add a pro X+ console consumers are still going to buy the PS5 pro over it and unless they sell it at an incredible loss, its likely only going to have a few CUs more than the pro which has roughly the same number of CUs as the Series X. Its just a cluster of bad decisions not aligned with the gaming SDLC. The PS5 is going to be competing with the Series S and the X is going to be competing with the PS5 pro.

They just need to focus on making as many great titles and putting them on as many platforms as possible while considering the requirements of each platform. So Xbox first, then PC versions given time to bake. Because the hw between the PS5 and Series X is so similar the PS5 versions will be much much easier to deliver than PC versions. They just need to do this until the end of the gen. Otherwise releasing more hw before the end of the gen is just going to put more pressure on them to support another closed hw system.

 

[rntongo]

From another perspective, most companies I've ever worked for, if I use their equipment on company time, they own what I create. This would be par for the course here for most large enterprise policies. I don't think peoples faces are necessarily upset, as most people are just going through the process of learning something. People are used to Tim being the leader of the company, that is familiar. They are not familiar with MS coming in and superseding him. If we saw evidence they were upset here that would have come out post meeting. I think you're just seeing another case here where people are just looking for anything with or without context to pile onto MS.

Part of the reason why there is moderation to stifle this type of behaviour, as you can see, we've not been moderating this discussion because largely, people are upset. And with respect to the many developers on this forum, I'm not going to say anything. But it's not as simple as this discussion has made it, surely most of the commentary around Phil and the Xbox team is incredibly basic. Find another executive that can run Xbox that has 30+ years of experience being there at the start of when Xbox was founded fully understanding all the challenges they've had up to this point. You're not going to find a large list of people there.

Anyway, but in not doing any moderation, we are starting to see needle in a haystack narratives being tossed around and hoping that catches here. This thread is getting entirely random without any proof of anything that is being said. Just a dumping grounds of information without context pointing towards how bad Xbox management is. Let's continue to ignore the last 10 years of developers actually posting positive things about Xbox.

In the video Tim Schafer himself points out that moonlighting is done on their own time not company time. The other issue is that legally MS has a case if an employee is creating a product that is directly in competition to their employer but not if its in the same industry. A chef could work at iHop while running a food truck as a side hustle but both are in the food and beverages industry. The only issue is if the Chef is using company resources/time or creating products that directly compete with iHop's products. Matt Booty in this case was trying to say any gaming related work done while working at Double Fine belonged to MS. Which is why Tim Schafer stepped in.

The other issue with Booty's approach is that for example if I was a C# developer for Double Fine and I wrote a general purpose application on my own time with my own resources after work that streamlines work tasks for a variety of industries including gaming. Matt Booty could try to claim that it belongs to MS since its somewhat gaming related and I made it while I was their employee even if my employment had zero bearing on its creation. So its a murky thing which shouldnt be generalized like Booty was trying to do. Its also quite hard for devs in the gaming industry, they dont earn as much as they do in other tech sectors so you can see how moonlighting and consulting is compelling. And the laws protect the employer as well as the employee in this case. Personal projects outside of work even when not done for money belong to their creator not the company if it can be proven that they did not use company resources or time or create a product that was directly competing with their employer.

 

[iroboto]

In the video Tim Schafer himself points out that moonlighting is done on their own time not company time. The other issue is that legally MS has a case if an employee is creating a product that is directly in competition to their employer but not if its in the same industry. A chef could work at iHop while running a food truck as a side hustle but both are in the food and beverages industry. The only issue is if the Chef is using company resources/time or creating products that directly compete with iHop's products. Matt Booty in this case was trying to say any gaming related work done while working at Double Fine belonged to MS. Which is why Tim Schafer stepped in.

The other issue with Booty's approach is that for example if I was a C# developer for Double Fine and I wrote a general purpose application on my own time with my own resources after work that streamlines work tasks for a variety of industries including gaming. Matt Booty could try to claim that it belongs to MS since its somewhat gaming related and I made it while I was their employee even if my employment had zero bearing on its creation. So its a murky thing which shouldnt be generalized like Booty was trying to do. Its also quite hard for devs in the gaming industry, they dont earn as much as they do in other tech sectors so you can see how moonlighting and consulting is compelling. And the laws protect the employer as well as the employee in this case. Personal projects outside of work even when not done for money belong to their creator not the company if it can be proven that they did not use company resources or time or create a product that was directly competing with their employer.

I don’t know if we saw the same video? Matt explicitly states they don’t have an issue with it as long as they aren’t making games. And that any games made prior to their purchase would be honoured and any games following would have to be reviewed on a case by case basis.

This understandable because MS will now share data with Double Fine about the industry and that will likely change the trajectory of those looking to make side profits from game side hustles. There are lots of free to play games out there that are side mini games that would fit the description that the developers could be concerned about.

So that would include idea generation of games that aren’t greenlit. And that also makes sense to me. I’m not seeing anything explicit here to MS. If you learn about an idea in a meeting that isn’t greenlit. You get pissed and make it on your own time and it dominates the market. Well MS has a pretty good case that it owns that IP.

 

[XboxKING]

Respectfully I disagree. The criticism was taken within context. The interview was taken in the immediate aftermath of Redfall's launch. Where are the great games, where are the system sellers, these were the questions and he just dismissed them. If Xbox was delivering hit after hit but not bringing in more consumers into its ecosystem he would have had a point but that wasnt the case. He was not in a position to say that especially immediately after the launch of Redfall. That was the context. He was essentially saying "Currently there's this Redfall title that consumers dont like at all but great games dont even move customers anyway because we already lost the generation when we could have locked in the customers". So why did I pay for GP and buy a Series X? He could have said this at the launch of the Series X instead of promising bangers then switching his mind later on. It means he was simply making things up as he goes.


Its a matter of survival at this point. I agree with you that they should deliver more AAA consistently and this requires long term planning since such titles take longer to make these days. I also agree that ideally they shouldnt be releasing new titles in the same year on Playstation but at the moment they have atrophied their brand so much they need to at least in the medium term put their games on multiple platforms including Playstation to earn more.


Yes they really need this. But I dont think adding another hw system in 2026 or this gen is smart. Considering hw bad current sales are for the S/X, and soon lower PS5 prices are going to make this much riskier. I remember when they announced the S I said this two consoles at the same time strategy is going to cause all sorts of issues. If they add a pro X+ console consumers are still going to buy the PS5 pro over it and unless they sell it at an incredible loss, its likely only going to have a few CUs more than the pro which has roughly the same number of CUs as the Series X. Its just a cluster of bad decisions not aligned with the gaming SDLC. The PS5 is going to be competing with the Series S and the X is going to be competing with the PS5 pro.

They just need to focus on making as many great titles and putting them on as many platforms as possible while considering the requirements of each platform. So Xbox first, then PC versions given time to bake. Because the hw between the PS5 and Series X is so similar the PS5 versions will be much much easier to deliver than PC versions. They just need to do this until the end of the gen. Otherwise releasing more hw before the end of the gen is just going to put more pressure on them to support another closed hw system.

I didn’t see that interview but in Phil Speak it probably was (after the redfall fiasco)

”We are very proud of our family here at Xbox, we all strive to be the best, and what I personally love and why I know we are such a strong team, is that we can always find ways to improve our products and already impressive portfolio of industry defying products. We launched day one on Gamepass which is an excellent value proposition unmatched in the industry. I am a father myself, and I just love connecting with other gamers. For me it doesn’t matter if you play on Xbox or PC, in the end what matters is that our customers get the best games.”

?? He always does that, you forget the question and think: wow I really need to get my family on gamepass so that we can connect with eachother like Phil Spencer xD

 

[Remij]

lmao this thread man... I can't believe any of it at all. If someone reputable corroborates it and it comes out in the media... then MS will have a shit storm on their hands.

 

[rntongo]

I don’t know if we saw the same video? Matt explicitly states they don’t have an issue with it as long as they aren’t making games. And that any games made prior to their purchase would be honoured and any games following would have to be reviewed on a case by case basis.

This understandable because MS will now share data with Double Fine about the industry and that will likely change the trajectory of those looking to make side profits from game side hustles. There are lots of free to play games out there that are side mini games that would fit the description that the developers could be concerned about.

So that would include idea generation of games that aren’t greenlit. And that also makes sense to me. I’m not seeing anything explicit here to MS. If you learn about an idea in a meeting that isn’t greenlit. You get pissed and make it on your own time and it dominates the market. Well MS has a pretty good case that it owns that IP.

Yes we saw the same video. If you look back at my response I address some of the things you've mentioned as well as the initial assertion that it was about employees doing things on company time, which wasnt the case. The intricacies of who owns the idea are well articulated by Tim Schafer in the video. As well I gave examples in the previous response.

I didn’t see that interview but in Phil Speak it probably was (after the redfall fiasco)

”We are very proud of our family here at Xbox, we all strive to be the best, and what I personally love and why I know we are such a strong team, is that we can always find ways to improve our products and already impressive portfolio of industry defying products. We launched day one on Gamepass which is an excellent value proposition unmatched in the industry. I am a father myself, and I just love connecting with other gamers. For me it doesn’t matter if you play on Xbox or PC, in the end what matters is that our customers get the best games.”

?? He always does that, you forget the question and think: wow I really need to get my family on gamepass so that we can connect with eachother like Phil Spencer xD

Yes he has that habit of just saying reassuring things and then not delivering and then when things go bad he just says he's going to deliver, but you've already bought into the ecosystem but now you have some negative sentiment. I remember how he kept on saying RedFall was going to be the start of consistent delivery of AAA titles. And when the title came out it was like a 2013 launch title for the Xbox One. I honestly think the idea of day and date on GamePass should be revised for certain AAA titles. Maybe give a discount of $10 for Gamepass owners or something like that. And now we also dont know how financially feasible even AA is on the platform if HiFi Rush is being cancelled. That one was a shocker for me.

 

[iroboto]

Yes we saw the same video. If you look back at my response I address some of the things you've mentioned as well as the initial assertion that it was about employees doing things on company time, which wasnt the case. The intricacies of who owns the idea are well articulated by Tim Schafer in the video. As well I gave examples in the previous response.

I don't think you can conclude anything from that video. Matt literally says in that video, that they'll honor any work done before his coming in, and that they only real conflict of interest is work being made that would be directly competing with Double Fine. And he's speaking specifically about games as being the only issue, and he says that going forward they need to clean it up so that the grey area of who owns the IP is no longer in question.

That's pretty standard, why would a company with the resources of Microsoft leave things open to interpretation and gray area? Double Fine now works for one of the largest enterprises on the planet, this isn't the mom and pop shop in garage where everyone can be wishy washy and do things that feel good anymore.

 

[Johnny Awesome]

I'm sure Sony has the same talk.

 

[iroboto]

I'm sure Sony has the same talk.

Oh for sure. They've always owned the IP for every single game made for them. Xbox had a gray area before, with second party exclusives like Ryse Son of Rome etc. but they wised up on it.

 

[rntongo]

Oh for sure. They've always owned the IP for every single game made for them. Xbox had a gray area before, with second party exclusives like Ryse Son of Rome etc. but they wised up on it.

If they did something with Ryse, Quantum Break(without all the TV stuff), Ninja Gaiden, etc they would be in a much better position than now.

 

[Johnny Awesome]

Much better? Seems like a stretch.

 

[rntongo]

Much better? Seems like a stretch.

Yes some things like goodwill are extremely valuable yet hard to quantify and play a role even when valuing a product. A lot of goodwill has been eroded the past few years. They need to utilize their IPs to set a long term plan of releases. Put in place long term plans to release them; a new Doom title, Quake, release a new Ninja Gaiden, Ryse, Quantum Break, Wolfenstein 3, Alpha Protocol not just FPS or first person everytime. After a while they will have built much of it back.

 

[egoless]

If they did something with...Quantum Break(without all the TV stuff)....

That's called Control with a bonus gender swap . Along the same line, it's great seeing Hi Fi Rush's real scores now without the Xbox Microsoft Tax.

I kid.

That's an excellent point about goodwill. Only dump trucks of free stuff typically brings goodwill back....

 

[Johnny Awesome]

Well, hopefully Gears and Fable will do the trick.

 

[rntongo]

Not to excuse Phil for his mistakes but this analysis makes a lot of sense, there is pressure from Satya on the gaming division to drive growth. The thing the video misses out on are the actual blunders done by Phil by going into multiple directions executing haphazardly. But its clear there is some pressure on him from above especially now with a $70bn acquistion. When I was an Equity Analyst we didnt really care how much money you made a quarter or year on its own. We wanted to know how much are you going to be making quarter after quarter for the next 3-10 years. We wanted to project it out, see what your growth would be like and then model that back to today and that was your present day value. Its why we made EPS estimates regularly to see if the company was beating them i.e growing. He's 100% right that its all about growth. Some people are going to be holding MS or Sony stock for decades, they want to to ensure their investment will be growing during this time.

https://twitter.com/x/status/1790425142859809202

Chris Ding is quite spot on here imho. To reconcile shareholder and consumer demands will require a focused executor who can deliver on both ends.

1. Plan out Gaming Title roadmap before start of gen consulting devs on what hw/sw tools they need to ensure consistent release of quality AAA/AA titles.
2. Deliver a single base hw system that will be the benchmark for designing titles for a gen, based on feedback from devs.
3. Invest in improving software tools for this Xbox hw as well as multiple configs of PC(Microsoft GDK).
4. Offer timed exclusivity to increase revenues(Release on Playstation 1-3 years later, PC day and date to 6 months depending on title).
5. Consider midgen hw upgrade that is 100% architecturally compatible to the base system, since games take longer to make these days.
6. Offer cloud gaming service + subscription service, but no absolutes like day and date for all new titles. Use ASICs developed for Single base hw system for the cloud streaming servers.

The issue with Phil is he tried doing everything. Launches multiple Xboxes at the same time, day and date PC and Xbox for all titles, Instituting Gaming subscription service, major acquisitions. The thing that ends up suffering the most or getting the least attention in all this is the actual management of the studios and the developer. The actual creative part. If MS can fix these they can deliver a lot of quality content. I think Phil expected Starfield and Redfall to be hits and start a cycle of consistent delivery. And they could have been but all the attention was on other things and now we dont know how viable the subscription model is anymore.

Then it also looks like the Activision acquisition was meant to grow mobile gaming which is quite lucrative and could propel Xbox gaming even further. But MS doesnt want to pay App store fees so its going to be interesting to see what happens with the web app store they'll be launching next month.

 

[cheapchips]

It's odd that Ding frames it as Microsoft being a threat to Xbox but doesn't quite go the full distance and state that Microsoft Gaming is a threat to Xbox. I don't think I'm just splitting hairs.

Business structures define how organisation behave and Game Content and Studios are not sat under Xbox. It doesn't matter how well Matt and Sarah get on, or how well daddy Phil arbitrates between the kids, Xbox isn't getting anything from the Content team without offering something in return.

(I'm not saying that Xbox has nothing to offer. No store fees and millions of subscribers are not insubstantial)

 

[Johnny Awesome]

Not to excuse Phil for his mistakes but this analysis makes a lot of sense, there is pressure from Satya on the gaming division to drive growth. The thing the video misses out on are the actual blunders done by Phil by going into multiple directions executing haphazardly. But its clear there is some pressure on him from above especially now with a $70bn acquistion. When I was an Equity Analyst we didnt really care how much money you made a quarter or year on its own. We wanted to know how much are you going to be making quarter after quarter for the next 3-10 years. We wanted to project it out, see what your growth would be like and then model that back to today and that was your present day value. Its why we made EPS estimates regularly to see if the company was beating them i.e growing. He's 100% right that its all about growth. Some people are going to be holding MS or Sony stock for decades, they want to to ensure their investment will be growing during this time.

https://twitter.com/x/status/1790425142859809202

Chris Ding is quite spot on here imho. To reconcile shareholder and consumer demands will require a focused executor who can deliver on both ends.

1. Plan out Gaming Title roadmap before start of gen consulting devs on what hw/sw tools they need to ensure consistent release of quality AAA/AA titles.
2. Deliver a single base hw system that will be the benchmark for designing titles for a gen, based on feedback from devs.
3. Invest in improving software tools for this Xbox hw as well as multiple configs of PC(Microsoft GDK).
4. Offer timed exclusivity to increase revenues(Release on Playstation 1-3 years later, PC day and date to 6 months depending on title).
5. Consider midgen hw upgrade that is 100% architecturally compatible to the base system, since games take longer to make these days.
6. Offer cloud gaming service + subscription service, but no absolutes like day and date for all new titles. Use ASICs developed for Single base hw system for the cloud streaming servers.

The issue with Phil is he tried doing everything. Launches multiple Xboxes at the same time, day and date PC and Xbox for all titles, Instituting Gaming subscription service, major acquisitions. The thing that ends up suffering the most or getting the least attention in all this is the actual management of the studios and the developer. The actual creative part. If MS can fix these they can deliver a lot of quality content. I think Phil expected Starfield and Redfall to be hits and start a cycle of consistent delivery. And they could have been but all the attention was on other things and now we dont know how viable the subscription model is anymore.

Then it also looks like the Activision acquisition was meant to grow mobile gaming which is quite lucrative and could propel Xbox gaming even further. But MS doesnt want to pay App store fees so its going to be interesting to see what happens with the web app store they'll be launching next month.

In a rare conjunction of the stars, I agree with most of your post.

The main things I disagree with are:

1) That the S was a mistake. I don't think it was. It's over 50% of Series sales. S stands for "S"aved Xbox. I agree it should have had a little more memory, but overall it worked. It also means that the M will immediately have 1000s of games if they decide to launch one.
2) Starfield was a hit. It was still one of the biggest games on Steam last year and a ton of people on GP play it. It will also improve a lot over time, just like Sea of Thieves, Forza, and Halo. They should have had more solid launches though.

 

[rntongo]

In a rare conjunction of the stars, I agree with most of your post.

The main things I disagree with are:

1) That the S was a mistake. I don't think it was. It's over 50% of Series sales. S stands for "S"aved Xbox. I agree it should have had a little more memory, but overall it worked. It also means that the M will immediately have 1000s of games if they decide to launch one.
2) Starfield was a hit. It was still one of the biggest games on Steam last year and a ton of people on GP play it. It will also improve a lot over time, just like Sea of Thieves, Forza, and Halo. They should have had more solid launches though.

Glad we agree on quite a few things.

1.) I think I've stated my position on the Series S multiple times. The effort of releasing two consoles at the same time and the level of marketing and software support needed to make it work are not worth it at all imho. We both agree if it had enough memory it would have been more successful for the developers(which is super important). But the pressure from taking a hit on the cost of memory for such a low priced system in the first two years was likely going to raise a red flag in the Finance department. So I dont think they just didnt want to put the memory there, but the cost of releasing two systems at once had gone beyond budget and the areas to cut cost on was the memory and the memory subsystem of the both the X and S. But I think if they have to make another one it must have the same amount of memory as the higher end model.

But the memory only addresses the developer side to some extent. The other thing is will there be demand for it? MS produced more Series S consoles but there wasnt high enough demand for them, which explains why it had close to 50% of sales in the first two years. Those things have always been in stock. But there just werent enough X models in the first year, those were selling out and had more demand but not enough in stock. You need to consider that gaming is a global business and by the time the S reaches large parts of the world the taxes on it dont make it a better deal than the PS5 for example! So consumers globally will always gravitate towards the PS5 and Series X over the S. The 3 consoles are all expensive once taxes and mark ups are considered globally and consumers would rather have the PS5 or X. So dont be surprised if they have been "massaging" metrics for the S sales performance and dont release such a model again. I also dont think MS will be willing to release actual sales figures between the two models but if they do we can reach more solid conclusions. Once my monetary situation improves I will make some calls and see if I can get them.


2.) Well if they can turn Starfield into a cult classic that would be great, but looking at HiFi Rush, which was actually a critical success its hard to take MS figures for success at face value. The other thing you need to consider is what the expectations were before and what panned out. Remember it was marketed as one of the showcase games for a new generation of gaming, this is quite compelling for a lot of consumers. Is it possible there were a lot of compelling aspects about Starfield that will enable it to improve over time? Yes, but was it that next gen banger thats going to bring consumers into the ecosystem? Not at all, the game is so technically stuck in the previous gen, its going to need serious work. But I agree it could be improved over time and grow in that way. And maybe if MS has the conviction to give it a sequel, they can iron out what went wrong and really do the IP justice.

 

[Cyan]

Offer timed exclusivity to increase revenues(Release on Playstation 1-3 years later, PC day and date to 6 months depending on title).

fair points most of them, but I disagree with delaying launching a game on PC, when Windows is at stake. I mean, they don't need to release games day one on Steam -tough decision, that's where the PC sales are- but on Windows Store it'd only be fair.

It's odd that Ding frames it as Microsoft being a threat to Xbox but doesn't quite go the full distance and state that Microsoft Gaming is a threat to Xbox. I don't think I'm just splitting hairs.

Business structures define how organisation behave and Game Content and Studios are not sat under Xbox. It doesn't matter how well Matt and Sarah get on, or how well daddy Phil arbitrates between the kids, Xbox isn't getting anything from the Content team without offering something in return.

(I'm not saying that Xbox has nothing to offer. No store fees and millions of subscribers are not insubstantial)


View attachment 11300

Matt Booty is in there, the one who killed Midway back in 2010. Nice MS hired him :/