GameSpot: Phil Spencer Is Exactly Who You Think He Is

[iareharSon]

That's absolutely not the plan right now. They can make (at least) 4 AA games for the price of a AAA game in significantly less time. They bought studios that were cheap and good at operating on budget and on schedule so that they would have a stable of developers that operate cheaply and on a reliable schedule. AAA game development is long and complicated, and MS simply won't have the resources to do what you are talking about, even if they increased the size of all of heir studios by 50%.

We are not returning to the Xbox of the 2000s where money was no object and losses are largely irrelevant. Spector sold Nadella on staying in the game space by promising that becoming the Netflix for games would mean a profitable gaming division.

As for your back of the napkin math, the issue is the larger the GP user base, the more it will cost to license third party content. Adding in that fact the all major third parties are exploring their own subscription services, you can see the parallel to Netflix runs even deeper: Microsoft needs to start producing a lot of content, fast, so that they can continue to fill out GP as third parties leave it, just as Netflix is doing now.

Don't sell yourself on the idea that MS with GP will be releasing AAA game after AAA game. It's straight up not possible, and wouldn't be for a very long time.

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I absolutely think we're returning to the Xbox of the 2000s where money is no object and losses are largely irrelevant, at least in the short term. You don't purchase seven studios, build two studios - one of which is in the bay area, tack on a 150+ new team onto a recently acquired studio, have your eyes on more acquisitions, significantly bolster the workforce of existing and newly acquired studios, charge $10/month for unlimited access to all of your first party releases, cut into your Xbox Live subscription revenue by tacking it onto GamePass with GamePass Ultimate, allow people to purchase GamePass Ultimate for three years at a rate that's pennies on the dollar, acquire Twitch streamers for large sums of money, etc - unless you're loosening the purse strings to do an all out blitz to cement yourself within the industry.

The Netflix model worked at its best when there were tent pole releases with lesser more consistent releases to bridge the gap between those marquee experiences. Love it or hate it, this is an industry that's largely dictated by its AAA titles, and without those pillars defining the service - Microsoft is going to be doing its subscription service a disservice. I'm not saying that it's going to be a service that's primarily represented by AAA titles, simply that 3-4 AAA titles a year is absolutely a reasonable end goal once Microsoft's first party stable has largely settled into place.

If a AAA title takes anywhere from 3-4 years to make on average. 3-4 AAA titles a year would mean they'd need ~12 studios capable of AAA development? They currently have eight studios that are absolutely AAA-calliber studios, and three studios that are capable of AAA development - but may or may not choose to make AAA titles. Assuming they're not done acquiring or growing their studios, I'd say they're closer to potentially realizing that level of output than you give them credit for.

And I don't think Microsoft will have issues fleshing out GamePass with 3rd party titles. The Publishers who are in a position to offer their own subscription service are: EA, Ubisoft, Activision, etc. Basically a laundry list of Publishers whose games are already not represented on the service. There's a number of Publishers who aren't prolific enough to craft a subscription service of their own, and would ultimately be more successful by participating within an existing platform with an already established user base.

 

[Deleted member 18951]

i knew it. phil spencer is actually phil spencer.

Click to shrink...

 

[kung-fu-owl]

Netflix became Netflix by investing billions of dollars into their platform and content.

I don't think it'll be any different for Game Pass, not to suggest that's not what they've been doing for the last 2 years and change, but I think it's going to ramp up significantly before it simmers down.

Like Netflix, I imagine MS will eventually get to a point where they want a huge percentage of their content to be content they own and produce themselves and that's probably going to happen through leveraging their relationship with indies made through ID@Xbox program into funding games they own completely. Most games don't even break even, let alone make a profit, so I can definitely see a future in which MS is basically funding small indie studios and keeping them on content creation cycles that will keep Game Pass flush with content year in and year out.

I also suspect there will be smaller publishers out there like Annapurna and Focus Home that will continue to put their games on Game Pass as well, which will presumably be considerably cheaper than some of the bigger games they've landed recently.

 

[The Wraith]

Phil stabilized the brand when he was in charge. He listened to consumers and got rid of the shit Kinect and doubled down on games by acquiring a ton of developers. He also has one of the best deals in all of gaming going with the game pass initiative. He's not afraid to take some risks. I'm a fan of his and hope he continues to kick ass as the head of MS.

 

[Deleted member 43]

I absolutely think we're returning to the Xbox of the 2000s where money is no object and losses are largely irrelevant, at least in the short term. You don't purchase seven studios, build two studios - one of which is in the bay area, tack on a 150+ new team onto a recently acquired studio, have your eyes on more acquisitions, significantly bolster the workforce of existing and newly acquired studios, charge $10/month for unlimited access to all of your first party releases, cut into your Xbox Live subscription revenue by tacking it onto GamePass with GamePass Ultimate, allow people to purchase GamePass Ultimate for three years at a rate that's pennies on the dollar, acquire Twitch streamers for large sums of money, etc - unless you're loosening the purse strings to do an all out blitz to cement yourself within the industry.

The Netflix model worked at its best when there were tent pole releases with lesser more consistent releases to bridge the gap between those marquee experiences. Love it or hate it, this is an industry that's largely dictated by its AAA titles, and without those pillars defining the service - Microsoft is going to be doing its subscription service a disservice. I'm not saying that it's going to be a service that's primarily represented by AAA titles, simply that 3-4 AAA titles a year is absolutely a reasonable end goal once Microsoft's first party stable has largely settled into place.

If a AAA title takes anywhere from 3-4 years to make on average. 3-4 AAA titles a year would mean they'd need ~12 studios capable of AAA development? They currently have eight studios that are absolutely AAA-calliber studios, and three studios that are capable of AAA development - but may or may not choose to make AAA titles. Assuming they're not done acquiring or growing their studios, I'd say they're closer to potentially realizing that level of output than you give them credit for.

And I don't think Microsoft will have issues fleshing out GamePass with 3rd party titles. The Publishers who are in a position to offer their own subscription service are: EA, Ubisoft, Activision, etc. Basically a laundry list of Publishers whose games are already not represented on the service. There's a number of Publishers who aren't prolific enough to craft a subscription service of their own, and would ultimately be more successful by participating within an existing platform with an already established user base.

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I mean, OK, you can think that, but it's absolutely not true. The total cost of MS acquiring those seven studios was in the realm of what EA spent on the last one they bought. We haven't seen any sign of the kind of unlimited spending you are imagining. We have seen a very smart and well targeted use of a fair amount of additional resources. And money is only one factor here, like I said, time and manpower are huge elements. MS would need thousands of more developers to do what you described. Out of all the major publishers only Ubisoft is at all close to that content pipeline, and they have around twice as many employees as Xbox does, and still make use of lost of outsourcing. It also took Ubi 10 years to build up that capacity.

I hate that even when I'm praising how a company is going about things I end up looking like a downer because it doesn't match up with completely unrealistic expectations.

 

[Theorry]

I mean, OK, you can think that, but it's absolutely not true. The total cost of MS acquiring those seven studios was in the realm of what EA spent on the last one they bought. We haven't seen any sign of the kind of unlimited spending you are imagining. We have seen a lot of very smart and well targeted use of resources. And money only factor here, like I said, time and manpower are huge elements. MS would need thousands of more developers to do what you described. Out of all the major publishers only Ubisoft is at all close to that content pipeline, and they have around twice as many employees as Xbox does, and still make use of lost of outsourcing. It also took Ubi 10 years to build up that capacity.

I hate that even when I'm praising how a company is going about things I end up looking like a downer because it doesn't match up with completely unrealistic expectations.

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People seem to miss also the expansions of the existing studio's they are all growing very fast.

 

[Deleted member 43]

People seem to miss also the expansions of the existing studio's they are all growing very fast.

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Excuse me if I'm misunderstanding you, but I'm not missing that. They are growing their studios, but by like 30-50%, not the, I don't know, 300%+ they would need to be to persue a completely AAA strategy.

 

[Theorry]

Excuse me if I'm misunderstanding you, but I'm not missing that. They are growing their studios, but by like 30-50%, not the, I don't know, 300%+ they would need to be to persue a completely AAA strategy.

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No i dont mean you. I meant with people that others are missing that money is also spend on expanding the existing studio's. That alot of them easy can be multiple teams studios also.

 

[Deleted member 43]

No i dont mean you. I meant with people that others are missing that money is also spend on expanding the existing studio's. That alot of them easy can be multiple teams studios also.

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Ah, got it.

 

[Franco_Tech]

Someone who talks a lot but produces very little of what actually matters?

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This. I don't care if He is nice or not, just create content for your consumers, but i think Microsoft want to end its console business and become a service app. A guy that green light Crackdown but cancel potentially better games is not a guy that is doing a good job at least in the content department. He is doing a great job in creating excellent services and making its console less appealing every day.

 

[iareharSon]

I mean, OK, you can think that, but it's absolutely not true. The total cost of MS acquiring those seven studios was in the realm of what EA spent on the last one they bought. We haven't seen any sign of the kind of unlimited spending you are imagining. We have seen a very smart and well targeted use of a fair amount of additional resources. And money is only one factor here, like I said, time and manpower are huge elements. MS would need thousands of more developers to do what you described. Out of all the major publishers only Ubisoft is at all close to that content pipeline, and they have around twice as many employees as Xbox does, and still make use of lost of outsourcing. It also took Ubi 10 years to build up that capacity.

I hate that even when I'm praising how a company is going about things I end up looking like a downer because it doesn't match up with completely unrealistic expectations.

Click to shrink...

I honestly don't know how you can suggest that Microsoft isn't spending an exorbitant amount of money. I don't have knowledge on what it took to acquire Playground Games (200+ staff), Undead Labs (60+ staff), Obsidian (170+ staff), IneXile Studios (70+ staff), Compulsion Games (~40 staff), Double Fine (65+ staff), and Ninja Theory (100+ staff). I do know that besides what it took to acquire those studios, they have seven new buildings to care for and 700+ new staff to pay. That doesn't take into account the new studio they've tacked onto Playground Games, the new Age of Empires studio, or the staff additions to the existing and newly acquired studios. This level of additional spending over the course of 1-2 years is unprecedented within gaming. I've never suggested that the spending wasn't logical, strategic or severely needed, simply that it's difficult to argue anything other than Microsoft being very loose with the purse string when it comes to Xbox.

And I think we need to be cautious in how we use AAA. I know people roll their eyes at the addition of AAAA as a descriptor for a new wave of titles that we've seen, but I absolutely think it's needed. There's a huge difference between something like Red Dead Redemption 2 and Control / Metro: Exodus. They're both technically AAA titles, but the budget, scope of development, size of the team behind them, etc. are quite literally worlds apart. I'm not saying that Microsoft is going to be able to release multiple titles at the size and scale of Assassins Creed annually.

 

[Proven]

This. I don't care if He is nice or not, just create content for your consumers, but i think Microsoft want to end its console business and become a service app. A guy that green light Crackdown but cancel potentially better games is not a guy that is doing a good job at least in the content department. He is doing a great job in creating excellent services and making its console less appealing every day.

Click to shrink...

Have you not payed attention to anything MS has done or

 

[Proven]

By investing in multiple new studios and launching a brand new console, seems like MS is planning its exit to me.

 

[Deleted member 43]

I honestly don't know how you can suggest that Microsoft isn't spending an exorbitant amount of money. I don't have knowledge on what it took to acquire Playground Games (200+ staff), Undead Labs (60+ staff), Obsidian (170+ staff), IneXile Studios (70+ staff), Compulsion Games (~40 staff), Double Fine (65+ staff), and Ninja Theory (100+ staff). I do know that besides what it took to acquire those studios, they have seven new buildings to care for and 700+ new staff to pay. That doesn't take into account the new studio they've tacked onto Playground Games, the new Age of Empires studio, or the staff additions to the existing and newly acquired studios. This level of additional spending over the course of 1-2 years is unprecedented within gaming. I've never suggested that the spending wasn't logical, strategic or severely needed, simply that it's difficult to argue anything other than Microsoft being very loose with the purse string when it comes to Xbox.

And I think we need to be cautious in how we use AAA. I know people roll their eyes at the addition of AAAA as a descriptor for a new wave of titles that we've seen, but I absolutely think it's needed. There's a huge difference between something like Red Dead Redemption 2 and Control. They're both technically AAA titles, but the budget, scope of development, size of the team behind them, etc are quite literally worlds apart. I'm not saying that Microsoft is going to be able to release multiple titles at the size and scale of Assassins Creed annually.

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Yes, Xbox's opex has certainly gone up a fair amount from these purchases and other expansions. I'd estimate off the top of my head around 15%. But you seem to be massively overestimating what their new capex expenditures have looked like, probably because their capex has been so depressed these last few years. There are several very expensive studios out there MS hasn't bought. But they have bought seven more reasonable ones.

As for AA vs. AAA:

• Hellblade is an (amazing) AA game, while Uncharted 4 is a AAA game.
  
  
• The Outer Worlds is a AA game, while Fallout 4 is a AAA game. But considering how much more I expect to enjoy TOW over F4, that's not a bad thing.

 

[khamakazee]

That's absolutely not the plan right now. They can make (at least) 4 AA games for the price of a AAA game in significantly less time. They bought studios that were cheap and good at operating on budget and on schedule so that they would have a stable of developers that operate cheaply and on a reliable schedule. AAA game development is long and complicated, and MS simply won't have the resources to do what you are talking about, even if they increased the size of all of heir studios by 50%.

We are not returning to the Xbox of the 2000s where money was no object and losses are largely irrelevant. Spector sold Nadella on staying in the game space by promising that becoming the Netflix for games would mean a profitable gaming division.

As for your back of the napkin math, the issue is the larger the GP user base, the more it will cost to license third party content. Adding in that fact the all major third parties are exploring their own subscription services, you can see the parallel to Netflix runs even deeper: Microsoft needs to start producing a lot of content, fast, so that they can continue to fill out GP as third parties leave it, just as Netflix is doing now.

Don't sell yourself on the idea that MS with GP will be releasing AAA game after AAA game. It's straight up not possible, and wouldn't be for a very long time.

Click to shrink...

I read Spector and thought awesome, we're getting a proper Deus Ex in the future.

You're right, Microsoft already said prior to some of these acquisitions they want games that take roughly 2 years to get done. They don't want to buy studios that might only make 1 or 2 games per generation. That's not really sustainable with that many studios.

 

[kung-fu-owl]

Surely, depending on the time allotted by the pipeline they're building, MS could have teams of 100~150 devs work on AAA games in 3~4 years cycles? Even if they up to 200 devs per team on 3 years cycles, with proper scope and budgeting in mind, 4 AAA titles per years seems very feasible.

 

[Deleted member 43]

I read Spector and thought awesome, we're getting a proper Deus Ex in the future.

You're right, Microsoft already said prior to some of these acquisitions they want games that take roughly 2 years to get done. They don't want to buy studios that might only make 1 or 2 games per generation. That's not really sustainable with that many studios.

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lol, nice catch. I always do that for some reason.

And yeah, MS has been out here saying much of what I am for a while, Booty just did it again. So I'm not sure why some see it as controversial.

 

[OneBadMutha]

I mean, OK, you can think that, but it's absolutely not true. The total cost of MS acquiring those seven studios was in the realm of what EA spent on the last one they bought. We haven't seen any sign of the kind of unlimited spending you are imagining. We have seen a very smart and well targeted use of a fair amount of additional resources. And money is only one factor here, like I said, time and manpower are huge elements. MS would need thousands of more developers to do what you described. Out of all the major publishers only Ubisoft is at all close to that content pipeline, and they have around twice as many employees as Xbox does, and still make use of lost of outsourcing. It also took Ubi 10 years to build up that capacity.

I hate that even when I'm praising how a company is going about things I end up looking like a downer because it doesn't match up with completely unrealistic expectations.

Click to shrink...

Despite the purchases not being overly expensive for a trillion dollar corporation, the operating expenses have gone up drastically. Microsoft had been very stingy with head count up until recently. They've added a ton of employees. Once they've finished staffing up, they'll have far more employees on payroll than they've ever been close to within the gaming division. There's a lot more risk and long term expense committing to Microsoft employees vs contracting a few big AAA games that they can "one and done" if those expensive projects don't hit at the start of a gen.

So regardless of the cost of the studios, commitment is higher in the area of gaming than its ever been.

I agree AA studios still make the most sense. The Initiative won't be releasing anything for a few years. AAA studios making new games for new hardware are 5 year cycles at least. You have to build those from scratch unless you buy a publisher, Bungie, CDPR or Insomniac. AA now and can build AA up to AAA with sequels.

I agree with a lot of what you said up to the conservative investment part. Reading through Nadellas interviews since he became head of Microsoft, he doesn't believe Microsoft should stay invested in markets where they're not aggressive and leading. Either go all in or get out. And in some areas, they've gotten out. A lot of people thought gaming was next after Nokia. Obviously the "leading" here will be with the services and not the plastic. While Spencer is trying to calm fans down about consoles staying because streaming is a long ways off, Nadella is taking openly about the potential of streaming. Getting 1% of 2 billion gamers to subscribe to a service would mean 200 million customers. 5 to 10 years is nothing in the timeline of a trillion dollar corporation when they see that kind of potential.

 

[Franco_Tech]

Have you not payed attention to anything MS has done or

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Tell me, Game Pass, X cloud that is still very early, some Microsoft games coming to switch all to PC, xbox live to mobile 20 different type of xbox, all of that great but is not what i want, I want games and content so if I purchase the console I have the content to play. I think the only new AAA IP that Microsoft make was 2015 Sea of Thieves and was lacking n content. Other recent games was pretty mehh. Maybe in 2022 with the new studios that change.

 

[zedox]

To be honest guys and gals...it doesn't matter between AA and AAA. If the game is good, that's what matters. Microsoft making a hella lot more games per year will drastically increase in comparison to this past generation. There's a reason why they aren't done acquiring studios and it's obviously GamePass but also (as Matt Booty stated) to give teams and themselves a cushion in between MS releases. ID@Xbox is another big part of Game Pass that shouldn't go ignored because it's a really big factor in having enough new games for users to keep their subscription.

To be frank, we should be "celebrating" (I use that term loosely) that MS is highlighting and investing in the spectrum of video games, from Indie to AA to AAA or whatever type of game you are looking and for all different device types. We've never seen that type of investment from a platform holder in the way that they are (aggressively). I'm looking forward to what games XGP brings to us consumers and to gaming.

MS is obviously using a lot of money in this venture and if Phil, Amy, and Satya are right about what they are betting on, gaming is going to be making a lot of money for a lot of people (not only MS).

I still say next-generation is going to be the next golden era of gaming. (To me, the last one was the 90s)

 

[Deleted member 43]

Despite the purchases not being overly expensive for a trillion dollar corporation, the operating expenses have gone up drastically. Microsoft had been very stingy with head count up until recently. They've added a ton of employees. Once they've finished staffing up, they'll have far more employees on payroll than they've ever been close to within the gaming division. There's a lot more risk and long term expense committing to Microsoft employees vs contracting a few big AAA games that they can "one and done" if those expensive projects don't hit at the start of a gen.

So regardless of the cost of the studios, commitment is higher in the area of gaming than its ever been.

I agree AA studios still make the most sense. The Initiative won't be releasing anything for a few years. AAA studios making new games for new hardware are 5 year cycles at least. You have to build those from scratch unless you buy a publisher, Bungie, CDPR or Insomniac. AA now and can build AA up to AAA with sequels.

I agree with a lot of what you said up to the conservative investment part. Reading through Nadellas interviews since he became head of Microsoft, he doesn't believe Microsoft should stay invested in markets where they're not aggressive and leading. Either go all in or get out. And in some areas, they've gotten out. A lot of people thought gaming was next after Nokia. Obviously the "leading" here will be with the services and not the plastic. While Spencer is trying to calm fans down about consoles staying because streaming is a long ways off, Nadella is taking openly about the potential of streaming. Getting 1% of 2 billion gamers to subscribe to a service would mean 200 million customers. 5 to 10 years is nothing in the timeline of a trillion dollar corporation when they see that kind of potential.

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You don't seem to be disagreeing with anything I said. Again I think the problem is one of most just not knowing what things really cost in this industry, and using MS's very conservative approach in the past years as the standard.

MS is absolutely spending a good deal more on games than they have been. They have not done anything to demonstrate a growth in spending of the magnitude some seem to think has happened. Like I said, 15% opex growth this year makes sense. That and the capex expenditures around new studios, xCloud, next gen, etc. means a lot more money then in recent years, and they have used it well. But even though MS has decided to reinvest to try to achieve the Netflix for games vision, they are still a company that has become very results and value oriented. Xbox doesn't have a blank check, or anything close to one.

But don't get me wrong, I'm happy about every additional dollar MS spends in the industry. And I fully expect proven results with Game Pass will lead to even further investments.

 

[Deleted member 6235]

Yes, Xbox's opex has certainly gone up a fair amount from these purchases and other expansions. I'd estimate off the top of my head around 15%. But you seem to be massively overestimating what their new capex expenditures have looked like, probably because their capex has been so depressed these last few years. There are several very expensive studios out there MS hasn't bought. But they have bought seven more reasonable ones.

As for AA vs. AAA:

• Hellblade is an (amazing) AA game, while Uncharted 4 is a AAA game.
  
  
• The Outer Worlds is a AA game, while Fallout 4 is a AAA game. But considering how much more I expect to enjoy TOW over F4, that's not a bad thing.

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I imagine that Playground was the most expensive purchase of the bunch, considering their new studio, talent and even competitiveness around their next project.

Do you think they will up their publishing side of things too? It was quite problematic this generation.

 

[Deleted member 43]

I imagine that Playground was the most expensive purchase of the bunch, considering their new studio, talent and even competitiveness around their next project.

Click to shrink...

That's a very fair guess.

 

[Deleted member 43]

To be honest guys and gals...it doesn't matter between AA and AAA. If the game is good, that's what matters. Microsoft making a hella lot more games per year will drastically increase in comparison to this past generation. There's a reason why they aren't done acquiring studios and it's obviously GamePass but also (as Matt Booty stated) to give teams and themselves a cushion in between MS releases. ID@Xbox is another big part of Game Pass that shouldn't go ignored because it's a really big factor in having enough new games for users to keep their subscription.

To be frank, we should be "celebrating" (I use that term loosely) that MS is highlighting and investing in the spectrum of video games, from Indie to AA to AAA or whatever type of game you are looking and for all different device types. We've never seen that type of investment from a platform holder in the way that they are (aggressively). I'm looking forward to what games XGP brings to us consumers and to gaming.

MS is obviously using a lot of money in this venture and if Phil, Amy, and Satya are right about what they are betting on, gaming is going to be making a lot of money for a lot of people (not only MS).

I still say next-generation is going to be the next golden era of gaming. (To me, the last one was the 90s)

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This.

 

[pswii60]

I'm not sure what is so surprising in what Matt is saying. They'll have the big tentpole AAA releases like Halo Infinite, Fable etc, but in between those they'll have a consistent slew of AA releases. It's surely the best of both worlds.

It's not like Sony is releasing a AAA every month; this year they are releasing only two with Days Gone and Death Stranding, and then a couple of AAs in the form of Medievil Remake and Concrete Genie. Excluding VR of course. And Concrete Genie might be AA but it looks a hell of a lot more interesting than Days Gone.

 

[RedSparrows]

Tell me, Game Pass, X cloud that is still very early, some Microsoft games coming to switch all to PC, xbox live to mobile 20 different type of xbox, all of that great but is not what i want, I want games and content so if I purchase the console I have the content to play. I think the only new AAA IP that Microsoft make was 2015 Sea of Thieves and was lacking n content. Other recent games was pretty mehh. Maybe in 2022 with the new studios that change.

Click to shrink...

Aside from your reductive dismissals, there's also the fact they have also bought a bunch of new studios, founded more, and expanded new and old ones. This is not some hard to decipher secret, nor is the fact the return on investment takes some time to appear.

 

[Verchod]

One of the most hyped games of the year in Gears 5 is coming to games pass day in 3 weeks, not 4 or 5 years. Thanks for the laugh at "average games with the odd gem". There are TONS of great games on games pass right now

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Great. One game from a franchise that in general has had it's day. I bought the original when it came out and loved it. Got bored of the franchise in the middle of the second game. Maybe it's not for me. That's fine, not every game is so that's why you try to have a broad catalogue.
Their first party is lacking for me, that's important as that's why you pick a certain platform.

 

[iareharSon]

I'm not sure what is so surprising in what Matt is saying. They'll have the big tentpole AAA releases like Halo Infinite, Fable etc, but in between those they'll have a consistent slew of AA releases. It's surely the best of both worlds.

It's not like Sony is releasing a AAA every month; this year they are releasing only two with Days Gone and Death Stranding, and then a couple of AAs in the form of Medievil Remake and Concrete Genie. Excluding VR of course. And Concrete Genie might be AA but it looks a hell of a lot more interesting than Days Gone.

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I don't even understand why what I'm saying is considered radical. I'm saying they'll release 3-4 AAA games a year, both internally developed and contracted, and I consider games like Control and Metro: Exodus to be AAA. Sony is literally already doing this, outside of this year which is understandable given then they're focusing on the next generation. I didn't say that AAA would outpace AA development, simply that they'll have 3-4 tent pole titles a year once they're firing on all cylinders next generation.

 

[Zok310]

I like Phil, he a good dude. Gotta give him credit for trying to keep the brand relevant in what has been a very difficult gen for them.
Hopefully his team backs him and if they dont then he should take his talents elsewhere.

 

[ZannrebeI]

How do Sony have many more studios, are they not about equal in numbers now?

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Sony has 12 First party studios Microsoft has 15 now.

 

[Sub Boss]

 

[CrypticSlayer]

That's absolutely not the plan right now. They can make (at least) 4 AA games for the price of a AAA game in significantly less time. They bought studios that were cheap and good at operating on budget and on schedule so that they would have a stable of developers that operate cheaply and on a reliable schedule. AAA game development is long and complicated, and MS simply won't have the resources to do what you are talking about, even if they increased the size of all of heir studios by 50%.

We are not returning to the Xbox of the 2000s where money was no object and losses are largely irrelevant. Spencer sold Nadella on staying in the game space by promising that becoming the Netflix for games would mean a profitable gaming division.

As for your back of the napkin math, the issue is the larger the GP user base, the more it will cost to license third party content. Adding in that fact the all major third parties are exploring their own subscription services, you can see the parallel to Netflix runs even deeper: Microsoft needs to start producing a lot of content, fast, so that they can continue to fill out GP as third parties leave it, just as Netflix is doing now.

Don't sell yourself on the idea that MS with GP will be releasing AAA game after AAA game. It's straight up not possible, and wouldn't be for a very long time.

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What do you think MS views console hardware as? Do they expect to sell more consoles next gen?

 

[slavesnyder]

What do you think MS views console hardware as? Do they expect to sell more consoles next gen?

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that's not the question.
spencer's biggest achievement was to convince nadella to carry on putting obscene sums of money into the transformation from a console brand to a desktop app.

 

[CrypticSlayer]

that's not the question.
spencer's biggest achievement was to convince nadella to carry on putting obscene sums of money into the transformation from a console brand to a desktop app.

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Lool.

 

[Ushay]

that's not the question.
spencer's biggest achievement was to convince nadella to carry on putting obscene sums of money into the transformation from a console brand to a desktop app.

Click to shrink...

Even though I know this is sarcasm, I'll bite anyway.
It isn't a transformation from and to something. It's a platform, plain and simple the foundations are already there. PC, Xbox and eventually mobile via XCloud. Three slightly different markets with a spectrum of players.