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Phil Spencer on exclusivity, monetisation and game development

Clear

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It's not rosy-eyed at all. They have over 10 million subscribers and growing. They now have one of the largest collection of studios in the world.

I don't agree at all with this.

You are saying you disagree by citing two facts neither of which counter anything I wrote.

C'mon. Work still needs to be done. I'm not being unfair on even subjectively harsh. The failure to launch Halo Infinite with Series S/X is a huge self-inflicted wound, it should never have happened. Same goes for the rest of the launch line-up being so anemic .

Hard questions need to be asked and answered.
 
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The_Mike

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He's right about needing more content with broad appeal. They have the Action/WRPG audience covered fifty times over by now. They need to start thinking about other segments of the market.

You forgot racing, and online gaming.

Theres no need to copy the other companies homework to succeed. I know Sony has success with their single player story driven cinematic experiences, but if Microsoft started copying that it would mean they'd gain anything.

People who buys xbox enjoys their focus action, wrpg, racing and online gaming. If Microsoft focused on the same type of games Sony does, thru might lose their current players.

And at the same time it didn't mean that ps players would jump ship. Some are invested in the exact IPs Sony has, and some would just never think of investing in the Xbox system.
 

Edgelord79

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You are saying you disagree by citing two facts neither of which counter anything I wrote.

C'mon. Work still needs to be done. I'm not being unfair on even subjectively harsh. The failure to launch Halo Infinite with Series S/X is a huge self-inflicted wound, it should never have happened. Same goes for the rest of the launch line-up being so anemic .

Hard questions need to be asked and answered.

I don't agree with you especially when you put so much inportance on launch lineup. I don't think it's going to matter much in the future and I'm pretty sure it won't affect anything in their projections this generation.

i think focusing on launch lineup is very short term.
 

Clear

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Actually adding a slew of teams will make things easier and better in the future. The issue is the teams were added to late to contribute to the launch. Going forward from late 2021 - early 2022 they should have a steady output of first party games. Shit takes time unless everyone wants obsidian, playground rpg, inexile second team, ninja theory ect to cut games short or make them less scope to get them out sooner. This is a problem that was not going to be fixed overnight. Even buying studios most were nearing releases of games putting them 4-5 years from another AAA game.

Not if those teams fail to hit deadlines like 343i, release in a bare-bones state like Rare did with SoT, get thrown onto gamepass and left to die like NT's last effort, get crucified by corporate synergy edicts like Crackdown, etc. etc.

More teams = more management, more need for coordination and control. As I wrote, aside from the Forza twins they've not done great at mangaing delivery and franchised in the past. Its far more likely than not the sudden, massive expansion will exacerbate any institutional issues more than remedy them.
 
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Gavon West

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Y
Like literally almost everyone has a phone or pc so the game is available. It may not be on ps5 but its available on something you own. And if those two dont cover everyone they are further working on smarts tvs, notebooks, etc.
I think people are misreading what he means when he says "available to everyone".
They are. Their still wishing Microsoft will put Bethesda games on Playstation, which is laughable. I had no idea the denial stage could last this long. Imma start documenting this shit. This is literally pushing the boundaries of science!
 
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EDMIX

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I see your Minecraft and raise you Jeremy Hinton, head of Xbox Asia;


"Minecraft" is a little special case, and I think it should be considered separately from the platform called Xbox. The idea is that "Minecraft" is itself a platform. It's also used in educational institutions, and by the time we acquired Mojang, it was already on various platforms. "Minecraft" is a unique platform, and it is a sample of how to create a community, and in the TGS presentation, we showed a video focusing on the "Minecraft" community. Xbox has a slightly different idea from "Minecraft". Since Game Streaming and Game Pass are already compatible with mobiles and PCs, I feel that there is not much need to support other devices.

I love that last little sentence there too. So very final.

None of really matters tbh, you could argue that about TES or Fallout. Sooooo yea, those series are "already on various platforms" If being on many systems and spending 2.5 billion results in that, clearly being on many systems and spending 7.5 billion is believed to result in the same situation, if not more so as I'm sure TES VI clearly will cost more to put out then Minecraft Dungeons.
 

Gavon West

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Not if those teams fail to hit deadlines like 343i, release in a bare-bones state like Rare did with SoT, get thrown onto gamepass and left to die like NT's last effort, get crucified by corporate synergy edicts like Crackdown, etc. etc.

More teams = more management, more need for coordination and control. As I wrote, aside from the Forza twins they've not done great at mangaing delivery and franchised in the past. Its far more likely than not the sudden, massive expansion will exacerbate any institutional issues more than remedy them.
Theyve taken risks on certain games. Some did well. Some didnt. This is hardly telling of the entire XGS empire. Your post is full of shit. Youre basing your opinion on more hypotheticals than anything else. Xbox has had some major successful titles this gen too - especially within the last couple of years. That list will only grow in the future. More work to do?? Really??

People were clamoring that Xbox needed heavy hitting exclusives, more studios, more Ip's. They've delivered on all of it and then some. Jesus H Christ, the narrative literally changed over night, from, "Xbox has no games" to "Xbox put your games on Playstation because.....reasons".. TFOH with that "more work to do" nonsense.

You do sound bitter AF tho.
 
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Edgelord79

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Its ridiculous growth! And its getting larger by the day. No doubt they'll be at 20 million subs by the end of this year.

I really don't like the subscription model, although GamePass is just too good not to use for me. I prefer to believe I own my games instead. Ce la vie.
 

Gavon West

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I really don't like the subscription model, although GamePass is just too good not to use for me. I prefer to believe I own my games instead. Ce la vie.
I love me some GPU. I buy the ones I play and can see myself playing again. Games you buy from Gamepass are discounted.
 
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Hitchyhero

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If Bethesda games were definitely never coming to PlayStation, he’d say it. No equivocation.

I still think they haven’t made up their minds yet, and won’t do until hardware and software sales for this gen are established... which makes perfect and correct business sense.

It's for legal reasons. They havnt officially bought the company yet so they can't announce they are cancelling PS releases.
 

Edgelord79

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I love me some GPU. I buy the ones I play and can see myself playing again. Games you buy from Gamepass are discounted.
I use it as a demo service quite a bit as well. I find ultimate to be such a good deal for me, especially with Crusader Kings 3 and the Age of Empires series.

It also saves me from having to keep buying games for my son as he just loves the "free" games on GamePass. It's a parents dream.
 
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Gavon West

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I use it as a demo service quite a bit as well. I find ultimate to be such a good deal for me, especially with Crusader Kings 3 and the Age of Empires series.

It also saves me from having to keep buying games for my son as he just loves the "free" games on GamePass. It's a parents dream.
And how! Best deal in gaming, hands down.
 
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EDMIX

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Why would this be true for TES and not Halo, Gears, Forza, Fable and so on?

Yet you could have asked that about Minecraft too ie "Why would this be true for Minecraft and not Halo, Gears, Forza, Fable and so on?" Maybe being a multiplatform IP? Maybe because they spent billions on it? Who knows.

At the ending of the day, we don't need to see Halo or Forza on Nintendo or PlayStation to have a theory that they might end up with their newly bought IPs on many systems.

Why compare such titles like Halo or Gears?

Its almost as if many don't want to admit that this clearly happened this year.


Yet you are saying they would spend MORE money on MORE expensive development to reach LESS units on once multiplatform games? Once they cross a few billion to buy something, all we have to go on is that its purchase was to make a solid return. It might answer why Bethesda is still self publishing, it might even answer why they are saying "case by case" as those cases are sounding like they mean Fallout and Elder Scrolls or why Phil is making statements like


"I believe great games should be able to be played by as many people as possible. I believe that in my core."

"my goal is: make games as playable by as many people as possible"

"I think for us it's all about priority, and reaching more players"

It makes a tough argument when they are literally putting a new Minecraft game in 2020 on many platforms, and then say stuff like they are saying and then spend almost 8 billion and really, really expect a different result. The only history we have on MS spending money like this in the billions on established IP are to make money on them on many platforms.

Thats all we have to go on and its a fair assessment of this.
 

Clear

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Theyve taken risks on certain games. Some did well. Some didnt. This is hardly telling of the entire XGS empire. Your post is full of shit. Youre basing your opinion on more hypotheticals than anything else. Xbox has had some major successful titles this gen too - especially within the last couple of years. That list will only grow in the future. More work to do?? Really??

People were clamoring that Xbox needed heavy hitting exclusives, more studios, more Ip's. They've delivered on all of it and then some. Jesus H Christ, the narrative literally changed over night, from, "Xbox has no games" to "Xbox put your games on Playstation because.....reasons".. TFOH with that "more work to do" nonsense.

You do sound bitter AF tho.

Why do I sound bitter? I'm just spelling out the reality of it.
I'm not resorting to childish rhetoric like "Xbox has no games", I gave credit where its due and pointed out instances where they'd got it wrong. That there's still no evidence of actual change is on them, not me. Hence my argument that work remains to be done.

If you want to pat Phil on the back for a generation with such weak output as this one, go right ahead, but you are the one with the blinkers on.

Nothing I wrote is in any way factually inaccurate or unfair. If they have struggled all gen to steward their initial roster of studios and franchises, why should I or anyone else assume that adding more workload is going to magically make things better? Its totally counter-intuitive, and if you've spent as long in the business as I have you'd know damn well how disruptive to productivity increasing headcount can be if not handled right.

Bottom line: Since Phil took the reins is marketshare up or down, and by how much? Have they improved market penetration globally? Have their core brands and key franchises grown stronger or weaker? How many new franchises have they established?

These are all fair questions that could be levied against Sony or Nintendo in order to judge their future prospects.
 

Gavon West

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It's for legal reasons. They havnt officially bought the company yet so they can't announce they are cancelling PS releases.
How is it that people still think that after spending $7.5 billion dollars to buy an entire publishing arm, that Phil is effectively going to take Todd's place in negotiating 3rd party deals after the contract for Zenimax acquisition is finally complete? Does that even make sense??? Like, really...
 
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Gavon West

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Yet you could have asked that about Minecraft too ie "Why would this be true for Minecraft and not Halo, Gears, Forza, Fable and so on?" Maybe being a multiplatform IP? Maybe because they spent billions on it? Who knows.

At the ending of the day, we don't need to see Halo or Forza on Nintendo or PlayStation to have a theory that they might end up with their newly bought IPs on many systems.

Why compare such titles like Halo or Gears?

Its almost as if many don't want to admit that this clearly happened this year.


Yet you are saying they would spend MORE money on MORE expensive development to reach LESS units on once multiplatform games? Once they cross a few billion to buy something, all we have to go on is that its purchase was to make a solid return. It might answer why Bethesda is still self publishing, it might even answer why they are saying "case by case" as those cases are sounding like they mean Fallout and Elder Scrolls or why Phil is making statements like


"I believe great games should be able to be played by as many people as possible. I believe that in my core."

"my goal is: make games as playable by as many people as possible"

"I think for us it's all about priority, and reaching more players"

It makes a tough argument when they are literally putting a new Minecraft game in 2020 on many platforms, and then say stuff like they are saying and then spend almost 8 billion and really, really expect a different result. The only history we have on MS spending money like this in the billions on established IP are to make money on them on many platforms.

Thats all we have to go on and its a fair assessment of this.
No. Not really. What you guys are actually suggesting is that after the deal is done, Phil will take Todd's place when negotiating more 3rd party deals with Sony after they spent 7.5 billion dollars to acquire Bethesda.

That's insane..
 

Gavon West

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Why do I sound bitter? I'm just spelling out the reality of it.
I'm not resorting to childish rhetoric like "Xbox has no games", I gave credit where its due and pointed out instances where they'd got it wrong. That there's still no evidence of actual change is on them, not me. Hence my argument that work remains to be done.

If you want to pat Phil on the back for a generation with such weak output as this one, go right ahead, but you are the one with the blinkers on.

Nothing I wrote is in any way factually inaccurate or unfair. If they have struggled all gen to steward their initial roster of studios and franchises, why should I or anyone else assume that adding more workload is going to magically make things better? Its totally counter-intuitive, and if you've spent as long in the business as I have you'd know damn well how disruptive to productivity increasing headcount can be if not handled right.

Bottom line: Since Phil took the reins is marketshare up or down, and by how much? Have they improved market penetration globally? Have their core brands and key franchises grown stronger or weaker? How many new franchises have they established?

These are all fair questions that could be levied against Sony or Nintendo in order to judge their future prospects.
Gamepass grew over 5 million subscribers since April. Their at 15+ million now. You tell me..
 

Clear

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No. Not really. What you guys are actually suggesting is that after the deal is done, Phil will take Todd's place when negotiating more 3rd party deals with Sony after they spent 7.5 billion dollars to acquire Bethesda.

That's insane..

No. Todd will do whatever Phil tells him to do. Same way as Phil will do whatever Satya Nadella tells him to! Corporate hierarchy is everything.
 
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Clear

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Gamepass grew over 5 million subscribers since April. Their at 15+ million now. You tell me..

When their GP subscriber base is larger than their present (third in a field of three) market position in terms of install-base is when you can indulge in hyperbole about how successful it is.

Because as it stands it shows nothing more than a good conversion rate from pre-existing XBL Gold subscribers. Getting better at monetizing an existing audience is a win, but it still begs questions on long-term sustainability and retention.
 
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It's a bet then.

Microsoft wouldn't throw away a shit load of revenue over console wars. It would be the smarter decision to put the games on PS5, take a chunk of the profit to pay for more games on gamepass.

Want to buy TES6 for £70? Buy a ps5, want it for free? Get an xbox.

Like you say, we will see. It's fun speculation for now.
You'll lose this Bet ;)
 

benjohn

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This guy's making me bipolar. He changes his opinions and twists his words by the speed of light.
 

Redlight

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Good question. I believe because Gears, Forza, Halo, Fable are known to be exclusives. Letting them go to another console, diminishes the 'value' of that product. If Halo can be played on any console, it becomes less special, because it used to be a 'rare' (only on one console) product.

The opposite is true with TES. The value proposition is; "well, you can pay full price for it on our competitor console, who make you pay full price, but buy gamepass and you can have it for free!".

See, the big criticism of GP is that free games = shit, because we are all made to believe that something that is more expensive is better (the apple model), and that getting anything for free or cheap, means that the product is shit or cheap. Having games like TES on 2 platforms (especially when the other platform has almost double the customers) means that the game will still look valuable - it being sold for £70 - while adding value to gamepass, because you're getting the game for 'free' from MS.

I base that on thoughts i've pulled from my arse.

This argument boils down to 'I wasn't expecting to play Halo, so I'm fine with that. However I was expecting to play Starfield and I must not be disappointed!'.

Gamepass isn't 'shit' now, who's making that criticism? Surely only people who refuse to use the service, a service that will be even better when all the current first-party studios are publishing to it directly.

In terms of the value proposition, it's simple; you can't play those Zenimax games without buying into the Xbox ecosystem.
 

wolffy71

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Yet you could have asked that about Minecraft too ie "Why would this be true for Minecraft and not Halo, Gears, Forza, Fable and so on?" Maybe being a multiplatform IP? Maybe because they spent billions on it? Who knows.

At the ending of the day, we don't need to see Halo or Forza on Nintendo or PlayStation to have a theory that they might end up with their newly bought IPs on many systems.

Why compare such titles like Halo or Gears?

Its almost as if many don't want to admit that this clearly happened this year.


Yet you are saying they would spend MORE money on MORE expensive development to reach LESS units on once multiplatform games? Once they cross a few billion to buy something, all we have to go on is that its purchase was to make a solid return. It might answer why Bethesda is still self publishing, it might even answer why they are saying "case by case" as those cases are sounding like they mean Fallout and Elder Scrolls or why Phil is making statements like


"I believe great games should be able to be played by as many people as possible. I believe that in my core."

"my goal is: make games as playable by as many people as possible"

"I think for us it's all about priority, and reaching more players"

It makes a tough argument when they are literally putting a new Minecraft game in 2020 on many platforms, and then say stuff like they are saying and then spend almost 8 billion and really, really expect a different result. The only history we have on MS spending money like this in the billions on established IP are to make money on them on many platforms.

Thats all we have to go on and its a fair assessment of this.

When you imply he wants to reach as many people as possible is what you actually mean " he wants to be on as many platforms as possible"

Those statements are not the same and unless you've seen xbox say otherwise i think u need to reevaluate the statement.

If you have a ps5 and cell phone or pc those games will indeed be available to you. But they wont be in the ps5.
 

Bernkastel

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First of all, I would like to say that we haven't acquired ZeniMax. We have announced our intention to acquire ZeniMax. It is going through regulatory approval and we don't see any issues there. We expect early in 2021 the deal will close. But I say that because I want people to know, I'm not sitting down with Todd Howard and Robert Altman and planning their future. Because I'm currently not allowed to do that, that would be illegal. Your question is completely inbound, but I get a lot of questions right now: "is this game exclusive? Is this game exclusive?" And right now, that is not my job in regards to ZeniMax. My job is not to sit down and go through their portfolio and dictate what happens.
 
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STARSBarry

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So what he is saying is he cannot answer because they don't own the company yet and can't see which games currently are bound by contractual agreement to release on other consoles...

On the other hand he's not saying "no" which would be well within his rights even when not owning, if he was not going to make the decision to make games exclusive this would be easy to say as the only reason they wouldent is if he decided they are not.

So the correct answer will be "I dont know, however all future releases not contractually agreed will be exclusive to Xbox"
 
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Bernkastel

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So what he is saying is he cannot answer because they don't own the company yet and can't see which games currently are bound by contractual agreement to release on other consoles...

On the other hand he's not saying "no" which would be well within his rights even when not owning, if he was not going to make the decision to make games exclusive this would be easy to say as the only reason they wouldent is if he decided they are not.

So the correct answer will be "I dont know, however all future releases not contractually agreed will be exclusive to Xbox"
Probably another blog post after the purchase has completed(or maybe Evangelion Unit-01 Evangelion Unit-01 can clarify better).
 
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GamerEDM

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expect nothing, but It would be nice to have their big franchises like Elder scrolls and Fallout to still come to playstation platform.
 
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nemiroff

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Yeah sure. He's not talking to them about future strategy and in general, just not at all.

Believe.

My company just made a similar transition and I can confirm that what Spencer say is true. Its illegal for the execs and employees in these companies to even discuss internal matters while the process is going on. They are required to operate as separate entities until the acquisition is officially done. Even after it was made official we were not allowed to talk to our new colleagues as anything other than competitors until a specific date. This is no trivial matter, it is regulated by law.
 
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Geki-D

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Interested to know how MS intends to make the money they spent back considering their hardware is, historically, the poorest selling on the market with the lowest attach rate and by their own admission, Gamepass is pretty poor at making back money leaving them only PC sales or just going full on GAAS to the extreme. Reason Minecraft isn't exclusive is that they paid so much, they would lose too much money not making it multiplat, this is looking like a similar case.
 

DinoD

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Its not like they have to make that decision right now. They may use it to grow the revenue. They could use it to grow their market share, and lock more people into their eco system.
Perhaps they are really seeing Amazon and Google as their main competitors with the subscription model, and they are "sandbaging". I do not believe that purchasing Zenimax was the tactical move against Sony. Spending 7.5 bil. is a strategic purchase.

Regards
 
D

Deleted member 775630

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Interested to know how MS intends to make the money they spent back considering their hardware is, historically, the poorest selling on the market with the lowest attach rate and by their own admission, Gamepass is pretty poor at making back money leaving them only PC sales or just going full on GAAS to the extreme. Reason Minecraft isn't exclusive is that they paid so much, they would lose too much money not making it multiplat, this is looking like a similar case.
Game Pass is not a big money maker right now. It's obvious that they intend to earn this back via Game Pass. Their whole strategy is revolving around Game Pass.
 

cormack12

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I think the sale is expected to complete end of Feb/beginning of March isn't it? I'd expect it within this fiscal year at least. Probably the last minute rush
 
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regawdless

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As a guy with long time experience with these matters I can confirm that what Spencer say is true. Its illegal for the execs and employees in these companies to even discuss internal matters while the process is going on.

While this might be true for the moment - officially - I don't believe for one second that there weren't talks beforehand. And that it's unclear how to proceed with exclusives mid and long-term.
Buying another company for 7.5 billion without any talks going on, without a clearly defined strategy?
Nope. MS already knows exactly what they want to do with Bethesda, have analyzed their portfolio and defined a strategy.

Philly boi is just using this "no talks allowed" argument to not give a clear answer.

Which is obviously the right thing to do for him, not saying he's doing anything wrong.
 
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Geki-D

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Game Pass is not a big money maker right now. It's obvious that they intend to earn this back via Game Pass. Their whole strategy is revolving around Game Pass.
Microsoft applying the same strategy to gamers & shareholders:


"Please wait"

The idea that Elder Scrolls 6 is gonna pull in as much money as a day one on GP as it would selling 3.4 million physical copies in 2 days (what Skyrim did), is pretty ridiculous and really just highlights why the GP model isn't working for MS right now (and it's honestly hard to imagine how it ever would in the current state of the games industry).
 

nemiroff

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While this might be true for the moment - officially - I don't believe for one second that there weren't talks beforehand. And that it's unclear how to proceed with exclusives mid and long-term.
Buying another company for 7.5 billion without any talks going on, without a clearly defined strategy?
Nope. MS already knows exactly what they want to do with Bethesda, have analyzed their portfolio and defined a strategy.

Philly boi is just using this "no talks allowed" argument to not give a clear answer.

Which is obviously the right thing to do for him, not saying he's doing anything wrong.

Of course there is a strategy within Microsoft. I'm just saying that what details are allowed to be shared (asset worth f.ex.) between publicly traded companies during a buyout is stipulated by third party entities like big law firms. MS and Bethesda isnt allowed to do any strategic talks (or sharing to the public) whatsoever about the matter outside this. There's no conspiracy nor foul play here, sorry.
 
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D

Deleted member 775630

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Microsoft applying the same strategy to gamers & shareholders:


"Please wait"

The idea that Elder Scrolls 6 is gonna pull in as much money as a day one on GP as it would selling 3.4 million physical copies in 2 days (what Skyrim did), is pretty ridiculous and really just highlights why the GP model isn't working for MS right now (and it's honestly hard to imagine how it ever would in the current state of the games industry).
They validated the business model internally, they know what is needed to make it profitable. The board wouldn't sign off on such a big purchase as Bethesda/Zenimax if it didn't make sense in the long run. If they can get to that number of subscription to make it profitable, we don't know yet, but the business model is obviously valid, otherwise they wouldn't invest their money and time in it. Microsoft isn't a charity.

Skyrim is at +30mil copies, best case that's $1.8 billion. That means 1 year of 12 million subscribers at $15, they're already at 15mil subscribers, update of Game Pass subscribers this evening.
 

12Dannu123

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Microsoft applying the same strategy to gamers & shareholders:


"Please wait"

The idea that Elder Scrolls 6 is gonna pull in as much money as a day one on GP as it would selling 3.4 million physical copies in 2 days (what Skyrim did), is pretty ridiculous and really just highlights why the GP model isn't working for MS right now (and it's honestly hard to imagine how it ever would in the current state of the games industry).

This will all depend on the adoption rate of Game Pass in the decade. In the next 10 years 5G will likely be mainstream and there will mean Cloud gaming will be accessible.

Microsoft is big enough to absorb the losses and invest until it makes a profit. Netflix will make a profit in 2022.

If Sony were to try to compete the PS divison will likely be crippled by losses that they can't sustain.
 
Jun 21, 2020
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Microsoft applying the same strategy to gamers & shareholders:


"Please wait"

The idea that Elder Scrolls 6 is gonna pull in as much money as a day one on GP as it would selling 3.4 million physical copies in 2 days (what Skyrim did), is pretty ridiculous and really just highlights why the GP model isn't working for MS right now (and it's honestly hard to imagine how it ever would in the current state of the games industry).
Ok, you do the math on this.

Say 3+ million people do want to play Elder Scrolls, and they all sign up to GP like 15 million people already have. Add up the recurring monthly revenue. It doesn’t take a genius to understand these games will pay themselves in a pretty short time.

That and people like yourself tend to forget that the game can be bought standalone outside of GP for those that want to, and comes with a 10% price reduction for being subbed to GP.

On top of that, GP subs will probably be double or more than the current 15 million subs when all these kind of games start launching on the service.