Uninvent if old.
https://www.wsj.com/articles/micros...-to-reinvent-the-company-11643912561?mod=e2tw
https://www.wsj.com/articles/micros...-to-reinvent-the-company-11643912561?mod=e2tw
The $75 billion deal that Phil Spencer engineered for Activision Blizzard Inc. ATVI -0.38% is the biggest bet yet that games can go from a side hustle to a core business at the world’s most valuable software company.
A Microsoft Corp. lifer and a lifelong gamer, Mr. Spencer has been the chief architect and evangelist for a bigger videogame strategy inside a company that revived its fortunes in recent years largely by focusing on business customers. His plan has shifted videogames at Microsoft from its two-decade emphasis on its Xbox videogame hardware to a vision of assembling a roster of studios whose games can be played across a range of devices. And Mr. Spencer has tied his game ambitions directly into cloud computing, which Microsoft Chief Executive Satya Nadella has put at the heart of his broader vision.
“He does a great job of balancing business needs with the creative needs,” said Robbie Bach, a retired Microsoft executive who led the early development of Microsoft’s Xbox business starting in 1999. “That is the hardest thing to do.”
The deal for Activision, which is subject to federal antitrust review, would turn the Redmond, Wash., company into the world’s third-largest videogame company, behind China’s Tencent Holdings Ltd. and Japan’s Sony Group Corp. Microsoft would have more than $20 billion a year in gaming revenue, putting it on par with the Windows operating system that for decades was the biggest driver of Microsoft’s business.
He was already more into games than the average Microsoft employee, said people who worked with him. He would call colleagues into his office to show off new ones, they said, and sometimes play games on his phone during meetings.
In a 2020 podcast with Xbox employee Larry Hryb, Mr. Spencer acknowledged playing on the company’s latest Xbox console during videoconference calls that took place via the company’s Teams software. “When I’m working, don’t tell Satya, but there are many times where I’ll just flip over and I’ll be sitting on the Teams call and I’m playing with my Series S,” he told the interviewer.
“I wouldn’t be surprised if Phil has literally played every game that launched in the past year and has an opinion on it,” said Richard Irving, who spent 12 years working on the Xbox team before leaving Microsoft in 2016. “Phil at his core is a gamer.”
Sarah Bond, a corporate vice president in the Xbox group, joined in 2017 right when Game Pass launched and has watched Mr. Spencer slowly build his vision piece by piece.
“He is an extraordinarily patient man,” said Ms. Bond. “He thinks of things in arcs of time far longer than me. He often encourages me to be patient.”
In 2018, Mr. Spencer unveiled streaming gaming to hundreds of company leaders at an annual retreat at a mountain resort in Washington. In a live demo, a player in North America on a Microsoft Xbox console, another in Europe on a PC and yet another on a cellphone in Indonesia raced each other in a Microsoft game that was running on Microsoft’s cloud.
It showed a future of gaming that functioned completely on the cloud, potentially creating a huge new group of consumers to target with Microsoft’s cloud-services infrastructure.
“From that moment on, the leadership at the highest levels of Microsoft were bought in,” said Kareem Choudhry, the corporate vice president of cloud gaming, who presented the demo. “We were just kind of off and running to the races.”
Mr. Spencer started pursuing more acquisitions as it needed original content to entice gamers to its subscription platform. By last year it owned a total of 23 studios.
Mr. Spencer’s opportunity to buy Activision, one of the largest gaming companies, arose late last year. Federal regulators were investigating the company over how it handled employees’ allegations of sexual misconduct and workplace discrimination, and The Wall Street Journal reported that Activision CEO Bobby Kotick had mishandled sexual-misconduct allegations. Activision’s share price tumbled nearly 30% between July, when the first regulatory investigation was made public and when the Microsoft deal was announced, making it a ripe acquisition target.
Mr. Spencer said he is confident that Activision management is addressing the workplace issues.
“We see the progress that they are making, that was pretty fundamental to us deciding to go forward here,” he said.
If the Activision deal closes, Mr. Spencer’s group will control 30 studios, pushing the company closer to becoming the “Netflix for gaming.”
“Phil has been systematically putting the building blocks in place,” said S. Somasegar, a more than 25-year veteran of Microsoft who left in 2015. “He’s got enough now to take the next big step with Activision.