LavitzSlambert
Member
Seeing a lot of Phil bashing lately due to unrest within the Xbox fanbase and the flop of Redfall seen by fan lads as an opportunity to dunk on him. The truth is that without Phil’s efforts over the past 10 years, there wouldn’t even be an Xbox Game Studios. That’s not to say he should be immune to criticism, but the amount and severity of it is overblown. Make no mistake, I am no stan for Phil. This is coming from someone who sees absolutely no point to owning an Xbox since the 360 and who finds PS+ Extra better than Game Pass. Regardless, the amount and kind of criticism being thrown his way is misguided.
Let’s start by looking at Microsoft as a company and their relationship with Xbox Game Studios, this is key because its ultimately what Phil is beholden to in terms of budget and strategy.
People on this board don’t seem to understand what kind of company Microsoft is and what their relationship with gaming is. Microsoft is fundamentally a middle man “platform” company first and foremost. They began this way and it’s their core competency. From Windows to Office, Azure, etc, they almost never make the best software (except for Excel). The reason they are so successful is because they provide a platform that does everything, even if they don’t do it exceptionally well. They are a tech company first, not a toy company like Nintendo, not an electronics or entertainment company like Sony.
It doesn’t matter to Microsoft as a whole if Xbox is in third place so long as they are profitable. And before someone comes in to assert their thesis on their last 10 income statements - it doesn’t matter how much money Xbox has lost Microsoft. Microsoft sees that as an acceptable cost of acquiring market share for future profits. They are so wildly successful that it means nothing, they’re fine with taking a hit for several years in order to build their moat. In particular right now Microsoft’s focus under Nadella is to become THE big player in the SaaS and PaaS markets. They understand services are the way to future profitability in their core markets, and they have taken this approach with the Xbox division too.
Now take a look at this, the history of Microsoft’s game studio:
en.m.wikipedia.org
Xbox Games Studios has historically been a publisher, first and foremost, NOT a development studio. Look at the history and you’ll see how few games have been developed by already-in-house Microsoft teams. Their strategy has ALWAYS been to acquire existing development studios and fold their teams in under the Microsoft brand, acting as a publisher. Take a couple minutes to skim through that wiki, you will see each of their early big franchises like Flight Simulator, MechWarrior, Halo, and Fable were all buyouts of existing teams. With the exception of Forza, almost all of these dev teams are no longer operating under Microsoft (or at all) with much of the institutional knowledge gone elsewhere.
You’ll see that the existing dev teams in XGS today are almost all new acquisitions from the past few years, or have have enough turnover and change to consider themselves brand new teams. Furthermore, these acquisitions historically have been run as independent game shops and were Microsoft brand in name only. Traditionally this is how Microsoft operated their software company acquisitions. That is changing, as of very recently (COVID), and Matt Booty has been transparent about this in a podcast interview with Friends Per Second:
That change looks to be a stronger partnership between XGS and among its dev teams - much like the models that have been in place at Sony and Nintendo for a long time, and often cited as one of the biggest benefits to working with PlayStation from small dev teams - access to their resources and guidance. A change so recent will obviously take time to see the effects of.
Last, we look at Phil Spencer and Xbox division itself. Nadella became CEO in 2014, got rid of Mattrick and put Phil as head of Xbox. Considering the amount of damage already done, Phil’s first major task was to stop the bleeding and return to profitability. Here lies the big disconnect I see on this forum, in that “Phil has had 10 years to fix this and he has failed!” It’s quite the opposite, especially considering just how dominant Sony has been, and Nintendo since 2017.
What people also forget (or never knew to begin with) is that Phil was also responsible for Groove Music, Movies and TV, and Xbox Entertainment Studios. His focus was not solely on gaming! In fact, guess who Phil’s boss was - it was Terry Myerson, the VP of Operating Systems, who at the time was in charge of Windows, Windows Phone, and Xbox. In case you didn’t know, Windows was undergoing a huge transformation due to Nadella’s company-wide shift to cloud services and away from their traditional OS market. We also know what happened to Windows Phone. So in 2014 Xbox was neither the focus of Phil’s boss, nor the sole focus of Phil himself.
Still, within Phil’s first year as Xbox head, they acquired notable IPs like Gears and Minecraft (they bought Mojang entirely). I don’t need to explain how big of a win that was in terms of bringing money into Xbox. They also gave Gears to The Coalition, shut down Xbox Entertainment Studios, and had to contend with the unmitigated disaster Xbox One Phil immediately inherited. They also decided to reveal Ori and the Blind Forest, while it was an indie game it had the backing of Xbox as publisher which helped make the game a huge success (which it surpassed in its follow up, Will of the Wisps).
It took Microsoft until 2017 to consider Xbox an important part of their future strategy, likely due to the company’s pivot toward cloud computing and services with Game Pass. Finally Phil was promoted to executive VP and given a seat at the table, reporting directly to CEO Nadella and with Matt Booty from Mojang filling the role of head of XGS development. This is probably the most important part in this post, because it’s clear that until 2017 Xbox was not given clout by Microsoft. Given the company’s history and organizational structure, I am not surprised it's taking a long time to turn Xbox around. 2017 and beyond is the period where Phil actually has a real voice and pull within Microsoft as a whole, and what he should be judged for is overall direction of Xbox. Matt Booty is in the hotseat in terms of first-party output, which has been the biggest criticism of Xbox as a platform.
Still, if you look at what Xbox has done during this timeframe, you will see a lot of positives. Aside from the name, Xbox Series X is great hardware and has excellent features. Game Pass has been wildly successful. Although I don't like the precedent set due to the scope of industry consolidation, Microsoft's acquisitions of Zenimax and their pending Activision-Blizzard look to be huge positives for the Xbox brand. I haven't played it but from what I understand, critically, Halo Infinite's single player campaign was great and finally has the series back on track. Forza Horizon 5 was GOTY material. These are all signs that what Xbox is doing under Phil is working. Microsoft is happy with the results as Phil just got promoted to CEO of Xbox in 2022 and is now calling all of the shots for Microsoft's gaming segment with minimal oversight from Nadella.
I will close with some legitimate criticisms of Phil and speculation about why I suspect Phil is not solely to blame:
1. Xbox Series S resulted in a worse experience overall for gamers by holding back top performance of Series X games.
While it's not the best outcome for a gamer who wants the full next gen experience, it probably is the best move for Xbox and its existing userbase. Even with a bunch of great exclusives, it's going to be hard for Xbox's comeback against Nintendo and Sony arguably at their peak of success. The $500 Series X is a huge ask even of existing Xbox fans, and Phil seems fine making a sacrifice on the "full potential" not being realized in exchange for more people being able to experience games. Expanded audience over high end experience, it's as simple as that, and no surprise considering the Game Pass subscription model they are pushing.
2. Phil allowed Halo Infinite to be rushed and turn into a flop.
I couldn't agree more. Considering Phil as a gamer himself would be opposed to how this was handled, I have to think this was not his decision. Halo was Microsoft's trump card and a way to rekindle the spark for Xbox this generation, and Phil knew it had to be good. Considering all the tales of its troubled development, it sounds like 343 themselves were largely to blame. Considering how pivotal it was to the success of the console, I suspect the major delay was the middle ground Phil was able to negotiate. Microsoft as a whole needed it to get out the door and unfortunately even with the extra time that was bought, it wasn't enough to save the game.
3. It was dumb to allow Redfall to release in such a state.
Yeah with his immediate backpedal it's hard to see the case of why Phil decided to do this. Perhaps XGS is still allowing decisions to be made by the teams themselves, and maybe that is the wrong answer, in which Phil should still be criticized. But considering how little fun people are saying they have outside of the technical issues, I wonder if the game is just nothing special. In that case maybe Phil did the right thing in releasing when it did, in the state it did, to get it out of the way before summer. It's too soon to know if this was the right call but still disappointing how this turned out.
4. Phil's recent quote "We lost the biggest console generation there is to lose so when we build on Xbox, we want it to feel awesome. So if we focused on great games, that doesn't mean we'll win the console race".
Missing the context of which Phil said this, which was talking about how the PS4/XBO generation built up gamers' digital libraries and how even releasing excellent games would not necessarily drive Xbox console sales. I don't like this, and I disagree - history has shown a couple superstar games can sell a platform. Since 2017, Microsoft's strategy to sell their platform (really just Game Pass) has been top priority. They are not just trying to make excellent games, a big focus is on the experience with their platform. I see their point, look at the Switch. An enormous hit, and you've seen many people's reactions that if Nintendo's next console doesn't support the libraries they built up or have feature parity, they're going to "wait and see" rather than buy into Nintendo's ecosystem. Seems to be Microsoft as a whole's stance and the whole point of their Windows and Azure offerings.
5. Phil isn't doing a good job with Microsoft first party output.
I agree here, and I don't think this is something Phil personally excels at. He is very good at running the business as a whole and being gamer focused, he understands the market and the platform. He just isn't getting it done managing XGS the way Nintendo and Sony are able to. Matt Booty was put in this position in 2018, and Phil is responsible for that choice. At the same time I'm not sure if there has been enough time to see the fruits of this labor, and the way XGS is working with the dev teams has been changing too. Like Phil has stated many times, it's like they're building a dev studio from the ground up.
TL;DR Phil Spencer is not infallible but he is good for Microsoft, good for gamers, and good for the industry. Xbox's problems are deeply rooted in the way Microsoft operates its business, and how they viewed their gaming division until 2017. Xbox has been moving in a positive direction because of Phil's efforts and while he bares responsibility for the lackluster first-party output, the criticism being thrown at him might be better directed at Matt Booty and/or Microsoft as a whole.
Let’s start by looking at Microsoft as a company and their relationship with Xbox Game Studios, this is key because its ultimately what Phil is beholden to in terms of budget and strategy.
People on this board don’t seem to understand what kind of company Microsoft is and what their relationship with gaming is. Microsoft is fundamentally a middle man “platform” company first and foremost. They began this way and it’s their core competency. From Windows to Office, Azure, etc, they almost never make the best software (except for Excel). The reason they are so successful is because they provide a platform that does everything, even if they don’t do it exceptionally well. They are a tech company first, not a toy company like Nintendo, not an electronics or entertainment company like Sony.
It doesn’t matter to Microsoft as a whole if Xbox is in third place so long as they are profitable. And before someone comes in to assert their thesis on their last 10 income statements - it doesn’t matter how much money Xbox has lost Microsoft. Microsoft sees that as an acceptable cost of acquiring market share for future profits. They are so wildly successful that it means nothing, they’re fine with taking a hit for several years in order to build their moat. In particular right now Microsoft’s focus under Nadella is to become THE big player in the SaaS and PaaS markets. They understand services are the way to future profitability in their core markets, and they have taken this approach with the Xbox division too.
Now take a look at this, the history of Microsoft’s game studio:
Xbox Game Studios - Wikipedia
Xbox Games Studios has historically been a publisher, first and foremost, NOT a development studio. Look at the history and you’ll see how few games have been developed by already-in-house Microsoft teams. Their strategy has ALWAYS been to acquire existing development studios and fold their teams in under the Microsoft brand, acting as a publisher. Take a couple minutes to skim through that wiki, you will see each of their early big franchises like Flight Simulator, MechWarrior, Halo, and Fable were all buyouts of existing teams. With the exception of Forza, almost all of these dev teams are no longer operating under Microsoft (or at all) with much of the institutional knowledge gone elsewhere.
You’ll see that the existing dev teams in XGS today are almost all new acquisitions from the past few years, or have have enough turnover and change to consider themselves brand new teams. Furthermore, these acquisitions historically have been run as independent game shops and were Microsoft brand in name only. Traditionally this is how Microsoft operated their software company acquisitions. That is changing, as of very recently (COVID), and Matt Booty has been transparent about this in a podcast interview with Friends Per Second:
That change looks to be a stronger partnership between XGS and among its dev teams - much like the models that have been in place at Sony and Nintendo for a long time, and often cited as one of the biggest benefits to working with PlayStation from small dev teams - access to their resources and guidance. A change so recent will obviously take time to see the effects of.
Last, we look at Phil Spencer and Xbox division itself. Nadella became CEO in 2014, got rid of Mattrick and put Phil as head of Xbox. Considering the amount of damage already done, Phil’s first major task was to stop the bleeding and return to profitability. Here lies the big disconnect I see on this forum, in that “Phil has had 10 years to fix this and he has failed!” It’s quite the opposite, especially considering just how dominant Sony has been, and Nintendo since 2017.
What people also forget (or never knew to begin with) is that Phil was also responsible for Groove Music, Movies and TV, and Xbox Entertainment Studios. His focus was not solely on gaming! In fact, guess who Phil’s boss was - it was Terry Myerson, the VP of Operating Systems, who at the time was in charge of Windows, Windows Phone, and Xbox. In case you didn’t know, Windows was undergoing a huge transformation due to Nadella’s company-wide shift to cloud services and away from their traditional OS market. We also know what happened to Windows Phone. So in 2014 Xbox was neither the focus of Phil’s boss, nor the sole focus of Phil himself.
Still, within Phil’s first year as Xbox head, they acquired notable IPs like Gears and Minecraft (they bought Mojang entirely). I don’t need to explain how big of a win that was in terms of bringing money into Xbox. They also gave Gears to The Coalition, shut down Xbox Entertainment Studios, and had to contend with the unmitigated disaster Xbox One Phil immediately inherited. They also decided to reveal Ori and the Blind Forest, while it was an indie game it had the backing of Xbox as publisher which helped make the game a huge success (which it surpassed in its follow up, Will of the Wisps).
It took Microsoft until 2017 to consider Xbox an important part of their future strategy, likely due to the company’s pivot toward cloud computing and services with Game Pass. Finally Phil was promoted to executive VP and given a seat at the table, reporting directly to CEO Nadella and with Matt Booty from Mojang filling the role of head of XGS development. This is probably the most important part in this post, because it’s clear that until 2017 Xbox was not given clout by Microsoft. Given the company’s history and organizational structure, I am not surprised it's taking a long time to turn Xbox around. 2017 and beyond is the period where Phil actually has a real voice and pull within Microsoft as a whole, and what he should be judged for is overall direction of Xbox. Matt Booty is in the hotseat in terms of first-party output, which has been the biggest criticism of Xbox as a platform.
Still, if you look at what Xbox has done during this timeframe, you will see a lot of positives. Aside from the name, Xbox Series X is great hardware and has excellent features. Game Pass has been wildly successful. Although I don't like the precedent set due to the scope of industry consolidation, Microsoft's acquisitions of Zenimax and their pending Activision-Blizzard look to be huge positives for the Xbox brand. I haven't played it but from what I understand, critically, Halo Infinite's single player campaign was great and finally has the series back on track. Forza Horizon 5 was GOTY material. These are all signs that what Xbox is doing under Phil is working. Microsoft is happy with the results as Phil just got promoted to CEO of Xbox in 2022 and is now calling all of the shots for Microsoft's gaming segment with minimal oversight from Nadella.
I will close with some legitimate criticisms of Phil and speculation about why I suspect Phil is not solely to blame:
1. Xbox Series S resulted in a worse experience overall for gamers by holding back top performance of Series X games.
While it's not the best outcome for a gamer who wants the full next gen experience, it probably is the best move for Xbox and its existing userbase. Even with a bunch of great exclusives, it's going to be hard for Xbox's comeback against Nintendo and Sony arguably at their peak of success. The $500 Series X is a huge ask even of existing Xbox fans, and Phil seems fine making a sacrifice on the "full potential" not being realized in exchange for more people being able to experience games. Expanded audience over high end experience, it's as simple as that, and no surprise considering the Game Pass subscription model they are pushing.
2. Phil allowed Halo Infinite to be rushed and turn into a flop.
I couldn't agree more. Considering Phil as a gamer himself would be opposed to how this was handled, I have to think this was not his decision. Halo was Microsoft's trump card and a way to rekindle the spark for Xbox this generation, and Phil knew it had to be good. Considering all the tales of its troubled development, it sounds like 343 themselves were largely to blame. Considering how pivotal it was to the success of the console, I suspect the major delay was the middle ground Phil was able to negotiate. Microsoft as a whole needed it to get out the door and unfortunately even with the extra time that was bought, it wasn't enough to save the game.
3. It was dumb to allow Redfall to release in such a state.
Yeah with his immediate backpedal it's hard to see the case of why Phil decided to do this. Perhaps XGS is still allowing decisions to be made by the teams themselves, and maybe that is the wrong answer, in which Phil should still be criticized. But considering how little fun people are saying they have outside of the technical issues, I wonder if the game is just nothing special. In that case maybe Phil did the right thing in releasing when it did, in the state it did, to get it out of the way before summer. It's too soon to know if this was the right call but still disappointing how this turned out.
4. Phil's recent quote "We lost the biggest console generation there is to lose so when we build on Xbox, we want it to feel awesome. So if we focused on great games, that doesn't mean we'll win the console race".
Missing the context of which Phil said this, which was talking about how the PS4/XBO generation built up gamers' digital libraries and how even releasing excellent games would not necessarily drive Xbox console sales. I don't like this, and I disagree - history has shown a couple superstar games can sell a platform. Since 2017, Microsoft's strategy to sell their platform (really just Game Pass) has been top priority. They are not just trying to make excellent games, a big focus is on the experience with their platform. I see their point, look at the Switch. An enormous hit, and you've seen many people's reactions that if Nintendo's next console doesn't support the libraries they built up or have feature parity, they're going to "wait and see" rather than buy into Nintendo's ecosystem. Seems to be Microsoft as a whole's stance and the whole point of their Windows and Azure offerings.
5. Phil isn't doing a good job with Microsoft first party output.
I agree here, and I don't think this is something Phil personally excels at. He is very good at running the business as a whole and being gamer focused, he understands the market and the platform. He just isn't getting it done managing XGS the way Nintendo and Sony are able to. Matt Booty was put in this position in 2018, and Phil is responsible for that choice. At the same time I'm not sure if there has been enough time to see the fruits of this labor, and the way XGS is working with the dev teams has been changing too. Like Phil has stated many times, it's like they're building a dev studio from the ground up.
TL;DR Phil Spencer is not infallible but he is good for Microsoft, good for gamers, and good for the industry. Xbox's problems are deeply rooted in the way Microsoft operates its business, and how they viewed their gaming division until 2017. Xbox has been moving in a positive direction because of Phil's efforts and while he bares responsibility for the lackluster first-party output, the criticism being thrown at him might be better directed at Matt Booty and/or Microsoft as a whole.
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