Xbox's Future Isn't Reliant On Activision Blizzard Deal, Reassures Phil Spencer

I honestly just want good games. Don't care about anything else at this point. No deals, no trailers, no marketing, no monopoly accusations.. I just want games I feel like I would play even if they weren't "free" on GP!

I mean if anyone thinks the market would be better with 2 console manufacturers than 3 then 🤷‍♂️. I really hope, whatever happens, Xbox keeps making consoles.

@grumpypotato Basically if the deal goes through the 70% -30% market share between PS and Xbox may become a 60% - 40% thing. If it doesn't it will remain the same. Since the deal keeps CoD on competing platforms and also adds it to other ones (like Nintendo) the whole deal is not about selling more Xbox via CoD exclusivity (which I still believe should have been the plan). Instead it just brings a ton more money into Microsoft Gaming or whatever that division is called.

@Kaloudz I am just waiting for CoDs I haven't played to show up on GP so I can play all the campaigns I missed.

@K1LLEGAL Sony, I’m sure, thinks the market would be way better off with just one console. You can bet internally they are hoping the Switch is like the Wii and Nintendo again stumbles with their next console. They don’t just want to be #1, they want no serious competition.

@Kaloudz @FraserG I’m guessing the procedures at the CMA are significantly different from those at the EU, and after he release of their provisional report, they start negotiating back and forth regularly.

I would not be shocked if similar was true in EU. The hearing processes are not just about seeking solutions (in fact they are not about that at all) but about every party that can find an opposition to state, or reinstate, their concerns or support on the record. There will likely be ongoing talks with the all these bodies and MS doing good faith efforts at finding common grounds.

@Sebatrox Microsoft definitely need to invest in the Asian market once the Activision Blizzard deal closes.

It’s not some linchpin to the long term — Xbox will exist if this deal doesn’t go through.

Fantastic, good to hear 😁.
I've always vastly preferr(d) games from Ubisoft and Sega, rather than Acti-Bliz' s output 😉😉. That is just me though.

He also mentions that he'd hate to see a scenario like the phone market where there are "only two manufacturers", stating that there are "three good competitors" in the console market right now.

Hmm, but why would he say that? Does he privately think that either one of the three might actually pull or be forced out of the market... Interesting, as that would be terrible.

"It’s not some linchpin to the long term — Xbox will exist if this deal doesn’t go through"

Surprised to hear that, I really thought that if this deal doesn't go through Microsoft will announce that there quitting the gaming business and Xbox.

I personally feel Microsoft will be far better company if the deal does NOT go through. Once spent they will need to start clawing some of that 70 billion back, and that can only come from gamers pockets.
Plus, I cant stand what Activison and Blizzard have been doing for years, they are making some real duds and doing it with some of the worst managers in all of gaming. I don't want those people being in Microsoft - who's gaming division has some pretty decent people in it right now. They don't need the drag effect of so many other failing studios...

If they just needed games, they should have bought square's sell off studios. They were virtually given away and yet they are strong teams and IP's that would have given Xbox consoles as much clout as they will get from Acti-Bliz but at %5 of the price.

I know they want the mobile space games, but as Xbox owners, that's not what we care about.

@Sebatrox I hope so to. As they did say last year that Asia was its fastest growing market. It has Tango Gameworks doing well with Hi Fi Rush becoming a hit over night with critics & gamers alike. Plus Microsoft has acknowledged that gamers want more Asian content. Even Games Pass have had a steady stream of good Asian Games.

@cragis0001 agreed xbox barely exist in south east asia except singapore

I am beyond indifferent to this deal as it is. I don't have any personal interest in Activision or Blizzard games and wish the resources being spent on this deal were being put towards less-expensive acquisitions (SEGA!) and existing first-party studios (Everwild was announced 4 years ago...)

@rhyno_888 aye it definitely should be something for Microsoft to look into.

This seems like a pretty obvious statement.

@Titntin Microsoft can easily afford the deal, everything Xbox related for them is just a drop in the bucket compared to their greater interests. It's still just a small side division of theirs in a sense, far from being something that is financially concerning for them.

@Snake_V5

Surprised to hear that, I really thought that if this deal doesn't go through Microsoft will announce that there quitting the gaming business and Xbox.

And I honestly been convinced by Sony that if the deal goes through, they will shut down their gaming branch and focus back on phones and laptops.

@Titntin

Once spent they will need to start clawing some of that 70 billion back

We have gone over this a billion times already, it feels, but no, they don't have to make a penny of that back, because they, at that point, own the property that is worth 70 billion dollars.

Equity on an asset that does not depreciate with inflation is preferable than money in the bank. Its like buying a house, you don't instantly try to rent out rooms to justify the mortgage, the fact that you own the asset is as good (actually better) than having money in the bank.

The only money they would have to make back is every cent spent on development of games post-acquisition, and that onus is on the games being developed making back their development costs, be it via MTX, direct sales, or boosted Game Pass subscriptions.

I cant stand what Activison and Blizzard have been doing for years, they are making some real duds

Personal opinions aside (I dont care for CoD, WoW or Overwatch) but the truth is that the last CoD broke sales records, and the latest WoW expansion has been the most well received expansion in recent memory. Not my type of games, but they are not duds.

If they just needed games, they should have bought square's sell off studios.

I am sure they would have loved to jump into the studios that ended up being acquired by Embracer, but due to this ongoing ABK deal, I am sure their hands were tied.

Wait, since when are there only two phone mfrs? Two OS's (one of which MS collects royalties on), but a number of mfrs (though it's thinned in recent years.)

@Titntin I technically agree with most of that. I do think that maybe they'd have gone for Square West instead if Square had been on the market first considering their partnership with Crystal Dynamics. I think with ABK it was simply "available" so they jumped on it because almost nobody else could, and it was there, and had valuable strategies for them with PC (Blizzard), mobile (King), and everything/industry-wide CoD. It's certainly not a brand I care about at this point, it's been troubled for ages, and I don't want them to be worse because of it (but also want them to gain some traction they've lacked to now.)

@Snake_V5 Even though we all told you that wasn't the case before?

@Sebatrox

I would love to see AB games on XGP but I still think that Sega would be better for gamers with so many japanese titles or at least Level-5 would be good too.

Although I do think Sega and XBox would be a match made in heaven (I always seen XBox as a continuation of Sega consoles, the OG xbox was an obvious successor to the Dreamcast), and although I dont see Sony making such a big fuzz over Sega as they are making over CoD, I can see such an acquisition actually resulting in a lot of hate, not love, from the Japanese market.

They would have to make absolutely every Sega title (at least the traditional ones, Sonic, Yakuza, everything from Atlus) multi-platform to not invoke the ire of the regional audience, IMO.

At that point, MS is better of making a big investment in SEGA, than buying them. If they are struggling (they been selling off stuff like their arcade branches and other businesses of late) then just inject a big amount of money by buying a large stake on the company, large enough to be able to make some demands, like every single future Sega title (including Atlus) getting XBox versions and land on Game Pass Day one and in perpetuity.

Love Phil...but of course he said this. Cuz there ain't nuthin of major interest outside of Starfield. And that has NOT impressed thus far. They put all their chips into this deal. Once it finalizes they can push Xbox into that next tier of 'Live service'.

@Kaloudz I'm certain they have continuous communication, yes.

It's just unlikely they are trying to sell the same remedies over and over, but instead making some adjustments and slowly see if they can reach an agreement. Getting the likes of Nintendo and Nvidia onboard with the deal likely is a big evolution on the remediation side. Who would have thought MS would allow Nvidia to stream every single XBox Games Studios game, starting, like, last week?

Microsoft did it with Bethesda and they will remove all further Activison games off PlayStation. This might not effect COD but it will effect other games. Bethesda hasn't shown anything and they were acquired over a year ago. Microsoft will basically own all these licenses and won't do anything with them. Just keep releasing the same games they’d have released without Microsoft.

@Tharsman That's completely different. Microsoft need this deal more than what Sony don't want it. Sony with PlayStation are already hugely successful anyway.

@Cikajovazmaj I agree. I think this acquisition would be great for consumers.

If they delay CoD a year for GamePass release, that still gives each console the decision to the players how they want to play but balances the purchases in a sense.

The thing that is killing me is the UK is leaning towards protecting a company (Sony) rather than protecting the consumer (more choices and more competition ultimately pressuring studios to create better games).

@Snake_V5 Nah, Sony has said it very clearly: they will go into foreclosure if this deal closes. Hell, makes sense, it seems all those games might sell a lot but they cost too much, reason they increase game prices and console prices. Without all of CoD MTX money, they will go bankrupt!!!

At least if you believe what they say!

@JayJ
I don't see them swallowing this spend. They can also easily afford to not raise the price of their consoles or their games to $70, but they are doing it anyway. Sooner or later head office will want to see a payback for all the investment.

@Tharsman Respectfully, we have not had this conversation at all, but I take it you have discussed this with others. There is of course some sense in what you are stating and to a certain extent I agree. But when a huge corp invests 70 billion it needs to be shown this will generate revenue. Share holders are usually not interested in investment which make no cash and 70 billion is not chump change even for MS. If I was one of the 70% of shareholders who are institutional investors, I'd be demanding they invest for profit.
Of course I'd rather not pay more, but I suspect I will have to once this deal concludes, and it doesn't provide anything I want at all. Yes Cod and WOW have been doing OK, but its difficult to name any others that are - and thats with over 10K dev staff.

@NEStalgia I think you get me. I think they could have made a much bigger splash for Xbox gamers with some more targeted spends. Bearing in mind they already have to get there own house in order to consistently produce product, I'm not sure buying so many troubled dev teams is their wisest move.

In short, I've invested in the MS eco system and I want them to do consistently well.
I cannot stand ActiBliz and have boycotted their products as a result of the awful management practices which still don't appear to be resolved or settled.
Why would I applaud to get all those hideous managers and abusers into the company I have a stake in? Particularly when the products they are best known for don't appeal at all. If Bobby Koteck remains a Microsoft Employee once this deal concludes, I'll seriously consider getting rid of Xbox and gamepass for good, and I'm unlikely to be the only one.

For all the above reasons, I'd much prefer it if it didnt happen, and that's because I care about MS and I want their games division to do well. I'm not the enemy, I'd just rather they bought one or two more studios who make games I can care about.

@Stnkygrngo I'm not sure that allowing this merger is protecting the consumer. Actually, I would say I'm pretty sure it isn't. No consolidation deal has ever benefited me as a consumer in a long run.
Either way, I just want games. I don't care who owns whom, as long as it doesn't produce price hike. I have my fingers in all the pies, so I just wànt/expect steady stream of games with stable or declining pricing.

@Titntin To be far to ROI, King alone, just continuing to do what King does will pay for it and then some. If you look at ABK's earnings statements MOST of their actual profit comes from King, not from CoD. CoD is a good chunk, but it's also a massive cost sink that eats half or more than half of the revenue so the profits aren't as great as it looks. King just prints unlimited money, so paying for the deal isn't a problem even if they rain physical copies of CoD on PlayStation from the back of cargo planes over Europe, as long as people keep playing Candy Crush everything is ducky for investor returns on this, so I don't think they need to do anything funny with pricing to try to recover from the deal. To a large degree I think that's mostly what the deal is all about is just getting that unending money press into the mix to fund other things once it breaks even. It's a $70bn money press that prints $10bn a year by doing nothing and comes with a dozen studios absolutely free, order now and include Call of Duty as a welcome offer. Today only!

BUT, I'm not convinced that merging any of that into the ecosystem actually improves their ecosystem and may distract them into other lines of business that don't improve this one. There's just now way ABK isn't a big distraction. Namely the AB part more than the K. CoD is just such a quagmire. It's the biggest name in gaming not starring a yellow mouse, but it devoured all of ABK just to keep it going to the point they're selling. I'd rather they bought something else, though if NOBODY buys those somebody elses, that might still be better yet.

I've been on the fence for the whole thing. On one hand, MS desperately needs some boons to get competitive because they still struggle to reach market share, and until they get market share, they'll keep struggling, and PS will keep taking business for granted. XB has the same adoption problem VR has in a way. OTOH, from day 1 of the announcement I cringed at the thought of MS-ABK in general.

On the plus side, there's no way they keep Bobby. He's there for the golden parachute and nothing else. I just see no scenario they keep him past the transition period. He'd stay on while they merge the pieces together, and then out.

@NEStalgia Thanks for the info on King income, I wasn't aware just how significant a part of the buisness that is, and as you say, it makes a lot more sense as a financial investment with that information to hand. Your 'today only' offer suddenly sounds more attractive.
..and i hope you are correct about Bobby. It's bad enough he'll get a golden parachute, but i hope he won't become part of the xbox exec team!

@Titntin

Respectfully, we have not had this conversation at all, but I take it you have discussed this with others.

When I said "we", I didn't mean to imply you and I, but the community on this site. It's been an extensively discussed topic.

There is of course some sense in what you are stating and to a certain extent I agree. But when a huge corp invests 70 billion it needs to be shown this will generate revenue.

@NEStalgia covered quite a bit, but still, any acquisition is considered a success if its operations at least break even financially. So long as there are no losses, AND no market shrinking, they are "content", because even no growth, at least immediate one, is acceptable because the acquisition itself represent growth for the company, and that is what investors care about. They don't care about high profits (well they care, because big profits means money that can be quickly invested into more growth.)

What is growth in this context? Buying other companies, expanding to new territories, entering new lines of business, maybe investing on new data centers, all that is growth.

At the end of the day, there are few things that an investor hates more than money on the bank, and MS has way too much money on the bank.

Xbox's 'unique ability' is Microsoft's wallet & there ability to lose money until they become market leader

Odd thing to say when you have an 80 billion dollar deal on the line lol

@cragis0001 It won’t make any difference. They’ve tried & tried & tried. People that wanna buy or play Japanese developed games know where to go, Nintendo or Sony. Those fans of that type of game have been categorically treated better throughout the years on those other platforms. This goes all the way back to the OG Xbox days.

@Would_you_kindly “Xbox's 'unique ability' is Microsoft's wallet & there ability to lose money until they become market leader”

While thats not not a true statement, i would like to add some of Xbox’s unique abilities to bring things to the gaming space that i for one have enjoyed and found other consoles to consider or not have a answer for. To list a few in no order of my preference, Online gaming, Ethernet on the console, achievements, smart delivery, quick resume, cross game chat, a controller that is not only PC plug in play, but iOS, android, and many others. The support across devices for xbox controllers is second to none and plug and play ready. Not saying these features excite all gamers and not saying you should care about them, but while your statement of their wealth keeping them afloat while they continue to grow their marketshare is true, i wouldn’t vaguely say us Xbox fans see that as the only value to what MS has brought to it’s users.

@Green-Bandit the PS2 had online functionality in supported games via the network adaptor that released in Japan in July 2001 so before Xbox was released & the PS4 / ps5 controller can connect to android / IOS & pc aswell (Nintendo switch aswell through a 3rd party usb adaptor)

@Would_you_kindly you might have missed my point or maybe i didn’t state it clearly, my apologies, when i say online gaming i mean Xbox live, PS2 had online games, and for that matter so did Dreamcast, but it was Xbox live that we all know to be the service and leader of it’s type. While you are not wrong that the PS4 and Dual sense can connect to many devices, it isn’t in anyway plug and play like the Xbox controller and most games default to the xbox so even tho you are using the dual sense the software reads a xbox controller input. I don’t think i need to explain smart delivery, as PS5 users didn’t know if they were running the PS4 or PS5 game in the beginning all the while saying smart delivery was a buzz word and did nothing. Again this isn’t to sell you on any of these features and services, i could care less as to who or why they do or don’t like a service, console or feature, that is for them to like or dislike. But to say burning money is the only unique thing is simply not true, i have been with PS and Xbox since the beginning and it’s having them both come out with features, services and functions that push them and better us players. I just wanted to state that cause we win when they both do unique things.

@Dreamcaster-X I'm sick of hearing if you want Japanese games buy PlayStation or Switch as that doesn't solve the issue. It's a bit different now though as Microsoft has stated that it's core customers top request was more Japanese/Asian titles & so far they are delivering as early 2023 has seen many releases Persona, Monster Hunter, Like a Dragon & we have many more to come this year Wo Long, Fatal Frame, Resident Evil, Street Fighter, Tekken, Blue Protocol just to name a few. Another advantage of a steady flow of games is it will hopefully put to bed in years to come that xbox don't buy Japanese games as the tide is slightly changing.

He could have easily lied and said the future depends on this deal. Jim Ryan sure has had no issues falsely claiming their future relies entirely on one 3rd party franchise. It's reassuring that Phil is taking the high road and treating the fans like they have common sense.

The fact that this has even been a question to me demonstrates just how poorly xbox has been managed over the years to present such little faith in people/media. And you cant just put this down to 'media bias' like i see the xbox faithful presently doing on twitter. Brad Smith literally just showed us all how inept they've been.
Now the narrative turns to 'console sales don't matter' gp growth does. And whilst they've made no secret gp is their primary platform and the end goal is to have the service on every platform. Until they are on every platform they need that console growth...which in turn leads to GP growth (don't forget that GOLD, a terrible for value service, still has over the double subs that gp has...and gold is restricted to just console).

Basically xbox really need to change their messaging and grow some faith they actually value their console for customers to see value in their console. Marketing both console and games outside of the internet would help greatly.
Stopping the message of 'gaming for everyone' to a more dominant message of 'xbox is the best place to play' would also help

@NEStalgia I need advice. You don't think with this ABK deal going through that it will be the end of PlayStation do you? You know I love PlayStation and its making me kind of panic.

@Snake_V5 No, seriously, don't worry about that. Playstation is going to be fine.

They'll see some market erosion, some profit dips, and they'll actually have to fight more for customers for the first time since early PS4. The company will be fine. The investors will be irritated. And it may well make PlayStation a better product as a result of the new competition.

@NEStalgia Thanks for talking to me, I don't have anyone to talk to and feel low right now.

@Snake_V5 Any time!

And really, don't let it get you down. PS isn't going anywhere. Over a period of years, market share will rebalance, hopefully to a much healthier state than it's been (80+% in Europe just isn't healthy for the industry). And the games market overall will continue to grow. PS will still be there. And will likely remain the leader of the console market, even if console is technically a niche segment of the total gaming market. They'll have to compete harder, which is a good thing!

@NEStalgia I've been feeling that conflicted thing again that I believe I spoke to you before about between PS and Xbox. I even have RE4 Remake today and not played it because of this. I don't understand why I feel like this when I know PS is the console I prefer like I always have done since the PS1.

@Snake_V5 Well, all the news about the abk merger and all the tribal back and forth among fans is probably bringing that conflict to the forefront.

I think probably getting to the bottom of why is probably not simple, otherwise you'd have figured it all out. Maybe the most useful path is, if you can't really figure that part out easily, instead figure out what you DO like about other platforms. Maybe defining what it is you do like about Xbox will make it easier to filter out when it feels good to be playing it rather than feeling bad about not using PS.

The ideal of course is to just enjoy it all and not worry about it, but it's obviously not as simple as that, so maybe just having a definition that works for you for when you like to play Xbox would help with that sense of conflict.

Even without conflicts, is being a multiplatform player generally means having some sort of set of conditions for what each platform is for. Like for me Xbox is for everything third party because I think they have until better digital ecosystem where games are a longer term purchase (if I was still all physical, I'd buy it all on ps because I think they have a better physical ecosystem.). Also for digital they're going to open up cloud play of (some) purchased games later, which is more value to my game purchases.

Ps on the other hand is exclusives, Japanese games that don't come to xb, and vr, which is a big thing for me.

The other pedantic thing for me is I like wear leveling my time on both so that I'm less likely to wear one out and have to replace it. Vr2 may mess with that plan since I'm getting unhealthily addicted to it, but that the plan, my stort of "policy" for how I use the two. Time spent on one is time I'm saving the other from wear and tear.

I'm sure you have reasons that make you like the Xbox, otherwise you wouldn't have it. If it's game pass, or exclusives, or liking the controller for a certain genre or whatever the reasons, maybe define those as the reasons to not feel conflicted using it for that thing.

@NEStalgia That doesn't really make sense to me. You have Xbox for everything except for the exclusives which is what you have PlayStation for. Why have PS though just for the exclusives when you can have that plus everything else too?

I'm not knocking that "gaming setup" but you could have all and everything on just PlayStation.

@Snake_V5 Well, post Bethesda merger, I'd have had to buy into Xbox even if I werent already in it because I do love Elder Scrolls, and will likely love Star field. But I'd already have made that jump prior anyway mostly because of how Xbox handles their digital ecosystem.

Back in the og xb era I didn't buy Xbox because I was still in PC at the time, and the main attraction of Xbox was bringing pc games to console. In the ps360 era I left pc behind and went all PS3, for a few years, but it became apparent that 3rd party games ran really badly on it and xb was the lead. Between that and missing PC a little I reluctantly bought a 360 and ended up really enjoying it and I never liked the DS3 controller and really loved the 360 ergonomics. PS3 became the exclusives box. Which was reinforced when they let my credit card get stolen lol.

Xbone.... Nope didn't bother, ordered 2 ps4s before the Sony e3 show ended and pretty much assumed ms was out of the game for good. I was out (and all physical still) and all PS4 (though 3ds got most of my play, really) until x1x launched. I mocked it at first but it seemed kind of decent and around then I finally got good Internet. I wanted to get some of that I was missing with digital sales and all, and debated between getting back into pc or getting a 1x because it was pc like mostly for exclusives, sales, gwg. It was too be my digital console next to the physical main console in PS4 pro by then.

But the more I used it, the os, the customization, the digital ecosystem features etc I gravitated towards it more. Obvious things like copying games from one hdd to another you could do on xb but not PS4. The solid bc etc.

I could have been swayed back to primarily ps5 this gen, but I expected Sony was going to go much stronger than they did with things like bc. I was actually surprised when they didn't. So when doing multi platform you have to pick which is the third party box more or less, and with xb, they just have the more robust ecosystem for digital content now with licensing, returns, storage management, bc baked in, upgrades for hardware upgrades in future generations working more like pc. They just have a better thought out pc-influenced environment for digital. Combined with GP, where you want you saves to carry over to the game if you purchase it, the cloud support (coming to purchased games eventually), it's a good half way point between the benefits of pc but without the hassle and price tag. So far 2 years in I don't regret it, they do seem to be generaly a few steps ahead of Sony in terms of their digital.

All that having been said though, theres enough ps exclusive games that it still gets a ton of my time, and with vr2, I'm very very hooked on it so it's getting basically all of my time until tears of the kingdom in May so the xsx is uncommonly dormant since mid Feb though I'm still trying to squeeze some persona in on gp cloud... But that's for phone, when I can!