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[anthony2690]

https://video-api.wsj.com/api-video...F-48A8-90CD-9662D56A108C&playerid=twittercard

Please refrain from being a console warrior and give the video a watch before commenting.

I thought the video is worth sharing, as we have had numerous threads with tidbits/quotes from this interview.

It's pretty interesting & I think it explains why Microsoft want Activision/Blizzard/King better than what most of us have commented/thought/suggested.

Edit:
Read Post 4 Topher has written up an excellent summary of key points, check them out!

Hopefully the video leads to some decent conversation/talking points without the usual vitriol or point scoring.

 

[Banjo64]

Video won't play for me.

 

[feynoob]

That was the case. As I Said it before.

• COD needs bigger communities, due to MTX. Blocking 1 platform would result in less mtx.
• King is MS main goal. They need that mobile space.
• Blizzard is there to increase gamepass pc, and make windows store somewhat attractive.
• Activision gives Xbox more exposure through marketing, which is very important. Since that enables them to be more active in certain markets(Japan and Europe).
• Gamepass becomes more attractive with COD.
• Owning Activision allows MS to negotiate with other 3rd parties for day1 gamepass.

 

[Topher]

Taking notes:

-Spencer says regulatory scrutiny has been fair and honest. Discussions around acquisition this size is warranted.
-COD will remain on other platforms including PS and Switch and many different screens.
-ABK deal is really about mobile.
-Call of Duty will continue to ship on PlayStation "as long as that makes sense....tech is always in transition".
-Asked why future games such as Elder Scrolls will be exclusive to Game Pass. Avoided the question and started talking about "new exclusive franchises" and Call of Duty being like Minecraft.
-Mobile controlled by Google and Apple. Mobile is imperative for MS business. Break up the duopoly.
-Consoles being sold at a loss justified 30% fee for games sold there versus phones which are sold at a profit.
-Apple throwing out Fornite from iPhone shows the power of the largest company in mobile.
-Fortnite available on iOS via MS browser. MS not able to monetize Android app.
-Cloud is an option rather than the only way to play such as with Stadia.
-20 million have tried xCloud.
-Re: Keystone. Pivoted to Samsung TV streaming app. Steaming device like Keystone is years away.
-Supply chain has improved, especially for XSS. Ample supply. XSX will have supply issues in certain markets. Problem is much as demand as supply.
-Cost of creating games has gone up. Talks up Game Pass. Will have to raise prices on certain things. Not this holiday.
-Game Pass "incredible growth on PC". 130-140% YOY growth on PC. Console growth slowed. "Reached everybody on console who wants to subscribe" at some point.
-Doesn't expect Game Pass to pass 15% of revenue.
-F2P is the largest gaming business model.
-Buying video games is far larger than Game Pass for Xbox.
-Game Pass is just a customer choice.
-Metaverse is a poorly built video game
-Metaverse looks like a meeting room. Basically, Spencer is describing Metaverse as inherently soulless.
-Metaverse is in early stages. Will evolve.
-Metaverse will not take off if VR device required.
-Metaverse is software led versus hardware led
-NFTs. Understands the gamer backlash. There are some benefits. DLC doesn't transfer to other platforms, for example. Digital economy should be more open. Remains to be seen if NFT is the enabler of that.
-Skillset of mobile developer is different from video game developer. Key aspect of ABK acquisition.

last two questions were just fluff. /end

 

[Banjo64]

Taking notes:

-Spencer says regulatory scrutiny has been fair and honest. Discussions around acquisition this size is warranted.

I wish the Minions would take note.

 

[Men_in_Boxes]

32 minute video.

Any good samaritans want to bullet point the interesting tidbits?

 

[feynoob]

I wish the Minions would take note.

Minions don't read the news. I doubt they can take notes.

Both sides needs ammo. So rational thoughts are out of the window.

 

[reksveks]

Will have a watch tomorrow but think my % for the reasons behind this deal might be on point.

The one thing that I want to know is how much confidence does MS have in regulators re the DMA and US legislature on the OAMA.

 

[jroc74]

"*Microsoft subsidize $100-$200 on the series s/x consoles (this is why they take a 30% cut on consoles, but not on pc, as pcs sell for profit)"

Uh....this is huge, lol.

Where are the BOM leaks like the last 2 generation had...

 

[LordCBH]

Blizzard is there to increase gamepass pc, and make windows store somewhat attractive.

Nothing can make the windows store attractive. It's been a pile of shit since windows 8.

 

[jroc74]

Taking notes:

-Spencer says regulatory scrutiny has been fair and honest. Discussions around acquisition this size is warranted.
-COD will remain on other platforms including PS and Switch and many different screens.
-ABK deal is really about mobile.
-Call of Duty will continue to ship on PlayStation "as long as that makes sense....tech is always in transition".
-Asked why future games such as Elder Scrolls will be exclusive to Game Pass. Avoided the question and started talking about "new exclusive franchises" and Call of Duty being like Minecraft.

Of course, many of us said this as soon as the deal was announced.

I can bet MS will do whatever they have to do to make sure they get King. King immediately gives MS a solid spot in mobile gaming.

 

[Panajev2001a]

https://video-api.wsj.com/api-video...F-48A8-90CD-9662D56A108C&playerid=twittercard

Please refrain from being a console warrior and give the video a watch before commenting.

I thought the video is worth sharing, as we have had numerous threads with tidbits/quotes from this interview.

It's pretty interesting & I think it explains why Microsoft want Activision/Blizzard/King better than what most of us have commented/thought/suggested.

Edit:
Some key points/I'm still watching the video too:
*I also think it is safe to say that call of duty won't be leaving the playstation ecosystem when/if this deal goes through. (Mentions big interest in mobile side of things and bringing cod to switch)

*Mentions exclusive games being important. (but COD, would be treated like Minecraft)

*Microsoft subsidize $100-$200 on the series s/x consoles (this is why they take a 30% cut on consoles, but not on pc, as pcs sell for profit)

* Talks about Google/apple store duopoly.

* Talks about pivoting away from Keystone streaming stick & partnering with Samsung.

I may have to update this later on, as real life calls, but hopefully the video leads to some decent conversation/talking points without the usual vitriol or point scoring.

$100-200 loss on each console still?

 

[anthony2690]

Taking notes:

-Spencer says regulatory scrutiny has been fair and honest. Discussions around acquisition this size is warranted.
-COD will remain on other platforms including PS and Switch and many different screens.
-ABK deal is really about mobile.
-Call of Duty will continue to ship on PlayStation "as long as that makes sense....tech is always in transition".
-Asked why future games such as Elder Scrolls will be exclusive to Game Pass. Avoided the question and started talking about "new exclusive franchises" and Call of Duty being like Minecraft.
-Mobile controlled by Google and Apple. Mobile is imperative for MS business. Break up the duopoly.
-Consoles being sold at a loss justified 30% fee for games sold there versus phones which are sold at a profit.
-Apple throwing out Fornite. from iPhone shows the power of the largest company in mobile.
-Fortnite available on iOS via MS browser. MS not able to monetize Android app.
-Cloud is an option rather than the only way to play such as with Stadia.
-20 million have tried xCloud.
-Pivoted to Samsung TV streaming app. Steaming device like Keystone is years away.
-Supply chain has improved, especially for XSS. Ample supply. XSX will have supply issues in certain markets. Problem is much as demand as supply.
-Cost of creating games has gone up. Talks up Game Pass. Will have to raise prices on certain things. Not the holiday.

Topher mind if I copy and paste+credit you for writing up the notable bits? (I think it will make the opening a little more attractive/digestible)

 

[feynoob]

Nothing can make the windows store attractive. It's been a pile of shit since windows 8.

They are fixing it slowly. It won't happen overtime.
As long as they allow full ownership of the file, allows you to mod, and add more games, it should be attractive.

Until then, It would be less shit than what it was 2 years ago.

 

[Ezekiel_]

We can't believe a single word out his month.

We already know he offered a deal for 3 years extension. The fact that he has to offer a deal of any kind proves their intention.

 

[feynoob]

We can't believe a single word out his month.

We already know he offered a deal for 3 years extension. The fact that he has to offer a deal of any kind proves their intention.

Can someone teach this kid, how business works? There is no infinite deal in business.

 

[SSfox]

 

[Men_in_Boxes]

Something has to be wrong.

XBox has $100 - $200 loss on each console sold as of last week.
Sony announced $499 PS5 was profitable back in Aug 2021.

This doesn't seem right.

 

[mansoor1980]

-"optional" and "choice" are the words he used in the interview a LOT ................nothing is definite to him

 

[SLB1904]

Something has to be wrong.

XBox has $100 - $200 loss on each console sold as of last week.
Sony announced $499 PS5 was profitable back in Aug 2021.

This doesn't seem right.

9tf vs 12tf

 

[DarkMage619]

"*Microsoft subsidize $100-$200 on the series s/x consoles (this is why they take a 30% cut on consoles, but not on pc, as pcs sell for profit)"

Uh....this is huge, lol.

Where are the BOM leaks like the last 2 generation had...

I'll always prefer a platform holder to take a loss when it comes to hardware over reducing the cost of the console to the company and increasing it on consumers.

It's good to see Phil again explain the difference between a game like CoD vs Elder Scrolls or Starfield. Every platform has some exclusive titles and Xbox is no different. CoD will stay on PlayStation and potentially hit Switch as well. Just like Minecraft.

The part on price increases is also not nearly as dire as some made out especially seeing the value proposition MS has been making recently. At the very least we should see clearly what those increases are before flipping out. If the price is too high expect a similar response to when Gold prices were raised. The Xbox community would not accept it.

Over all a pretty good interview I appreciate the early question about what happens if a major jurisdiction blocks the deal. Sticking to 'we expect to be approved' is the only answer he could give.

 

[Ezekiel_]

Something has to be wrong.

XBox has $100 - $200 loss on each console sold as of last week.
Sony announced $499 PS5 was profitable back in Aug 2021.

This doesn't seem right.

He's lying to look better for regulators, or he's not, and Xbox is an even bigger money sink than thought.

Pick one

 

[Tripolygon]

Something has to be wrong.

XBox has $100 - $200 loss on each console sold as of last week.
Sony announced $499 PS5 was profitable back in Aug 2021.

This doesn't seem right.

Different companies with different sourcing, manufacturing and design sensibilities. The design of both systems couldn't be more different, and Sony has cost reduced with 3 different iterations now while Microsoft has not.

He's lying to look better for regulators, or he's not, and Xbox is an even bigger money sink than thought.

Pick one

Or he's telling the truth.

 

[Kacho]

Game Pass is just a customer choice.

While technically true, how can he say this when it's the identity of the Xbox brand at this point? Their presentations are no longer "X game is coming to Xbox" it's "X game is coming to Game Pass."

 

[Panajev2001a]

Or he's telling the truth.

So picking option huge losses on HW two years after launch. In EU that is probably even worse profitability wise?

 

[feynoob]

He's lying to look better for regulators, or he's not, and Xbox is an even bigger money sink than thought.

Pick one

Consoles are always sold at loss.
XsS is 100% sold at loss, considering that system is not a $300 system. As for xsx, @ SLB1904 stated, the system is packed.

There is no lie there. Considering certain parts gets cheaper as time goes on. So if you buy expensive parts for your system, it wont get cheap fast.

 

[jm89]

$100-$200 to subsidize oof.

 

[MasterCornholio]

Consoles are always sold at loss.
XsS is 100% sold at loss, considering that system is not a $300 system. As for xsx, @ SLB1904 stated, the system is packed.

There is no lie there. Considering certain parts gets cheaper as time goes on. So if you buy expensive parts for your system, it wont get cheap fast.

I believe Sonys redesigns have something to do with the cost dropping so quickly. Haven't heard of Microsoft doing anything similar but I'm sure they are working on it.

 

[Tripolygon]

I'll always prefer a platform holder to take a loss when it comes to hardware over reducing the cost of the console to the company and increasing it on consumers.

Nobody should ever put you in charge of running any company because you will run it into the ground.

So picking option huge losses on HW two years after launch. In EU that is probably even worse profitability wise?

Short term they can afford it, long term remains to be seen. Sony ate a similar amount during PS3 generation until they were able to cost reduce.

 

[Topher]

Consoles are always sold at loss.
XsS is 100% sold at loss, considering that system is not a $300 system. As for xsx, @ SLB1904 stated, the system is packed.

There is no lie there. Considering certain parts gets cheaper as time goes on. So if you buy expensive parts for your system, it wont get cheap fast.

Not a lie, but Microsoft isn't making the moves to drop costs like Sony is either. As I'm typing this, I see MasterCornholio is making the same point. Either way, the price difference isn't due to the difference in GPU teraflops. I think SLB1904 is being sarcastic.

 

[feynoob]

Not a lie, but Microsoft isn't making the moves to drop costs like Sony is either. As I'm typing this, I see MasterCornholio is making the same point. Either way, the price difference isn't due to the difference in GPU teraflops. I think SLB1904 is being sarcastic.

MS has always been on loss front, since they want the best system, which means very expensive hardwares. Also Sony gets cheaper, since they buy in huge bulk, which means more discount.

As SLB1904 that was a good one, gg.

 

[MasterCornholio]

Not a lie, but Microsoft isn't making the moves to drop costs like Sony is either. As I'm typing this, I see MasterCornholio is making the same point. Either way, the price difference isn't due to the difference in GPU teraflops. I think SLB1904 is being sarcastic.

There's always the possibility that it's easier to cut costs from the PS5 than the Series systems. That could explain why we haven't seen those revisions from Microsoft yet.

 

[MasterCornholio]

MS has always been on loss front, since they want the best system, which means very expensive hardwares. Also Sony gets cheaper, since they buy in huge bulk, which means more discount.

As SLB1904 that was a good one, gg.

Both of them buy in bulk BTW. So it's not like Microsoft isn't getting those discounts from manufacturing.

 

[feynoob]

Both of them buy in bulk BTW. So it's not like Microsoft isn't getting those discounts from manufacturing.

They get it, its just that Sony has like double of MS. So MS cant order more than they can chew on. They are limited with userbase, unlike Sony.

 

[reksveks]

Taking notes:

-Spencer says regulatory scrutiny has been fair and honest. Discussions around acquisition this size is warranted.
-COD will remain on other platforms including PS and Switch and many different screens.
-ABK deal is really about mobile.
-Call of Duty will continue to ship on PlayStation "as long as that makes sense....tech is always in transition".
-Asked why future games such as Elder Scrolls will be exclusive to Game Pass. Avoided the question and started talking about "new exclusive franchises" and Call of Duty being like Minecraft.
-Mobile controlled by Google and Apple. Mobile is imperative for MS business. Break up the duopoly.
-Consoles being sold at a loss justified 30% fee for games sold there versus phones which are sold at a profit.
-Apple throwing out Fornite from iPhone shows the power of the largest company in mobile.
-Fortnite available on iOS via MS browser. MS not able to monetize Android app.
-Cloud is an option rather than the only way to play such as with Stadia.
-20 million have tried xCloud.
-Re: Keystone. Pivoted to Samsung TV streaming app. Steaming device like Keystone is years away.
-Supply chain has improved, especially for XSS. Ample supply. XSX will have supply issues in certain markets. Problem is much as demand as supply.
-Cost of creating games has gone up. Talks up Game Pass. Will have to raise prices on certain things. Not this holiday.
-Game Pass "incredible growth on PC". 130-140% YOY growth on PC. Console growth slowed. "Reached everybody on console who wants to subscribe" at some point.
-Doesn't expect Game Pass to pass 15% of revenue.
-F2P is the largest gaming business model.
-Buying video games is far larger than Game Pass for Xbox.
-Game Pass is just a customer choice.
-Metaverse is a poorly built video game
-Metaverse looks like a meeting room. Basically, Spencer is describing Metaverse as inherently soulless.
-Metaverse is in early stages. Will evolve.
-Metaverse will not take off if VR device required.
-Metaverse is software led versus hardware led
-NFTs. Understands the gamer backlash. There are some benefits. DLC doesn't transfer to other platforms, for example. Digital economy should be more open. Remains to be seen if NFT is the enabler of that.
-Skillset of mobile developer is different from video game developer. Key aspect of ABK acquisition.

last two questions were just fluff. /end

Cheers Topher for the write up

 

[MikeM]

$100-200 loss on each console still?

Its weird considering PS is generally an identical box and they have declared their box as profitable.

Something has to be wrong.

XBox has $100 - $200 loss on each console sold as of last week.
Sony announced $499 PS5 was profitable back in Aug 2021.

This doesn't seem right.

 

[jroc74]

The whole Sony vs MS and cost of the consoles..again as many speculated in 2020...its probably easier for Sony to switch between a PS5 disc and DE.

Change 1 shell, add/remove a disc drive, done.

Both consoles are using the exact same internal specs.

MS decided it wanted to do a ultra low cost next gen console with completely different specs.

Oh well...

Starting to think Sony was really on to something with the PS5 design.

 

[MasterCornholio]

They get it, its just that Sony has like double of MS. So MS cant order more than they can chew on. They are limited with userbase, unlike Sony.

I don't know about double though. What I do know is Microsoft has different models to sell so it might not be as easy for them to obtain wholesale discounts as Sony does.

 

[MasterCornholio]

The whole Sony vs MS and cost of the consoles..again as many speculated in 2020...its probably easier for Sony to switch between a PS5 disc and DE.

Change 1 shell, add/remove a disc drive, done.

Both consoles are using the exact same internal specs.

MS decided it wanted to do a ultra low cost next gen console with completely different specs.

Oh well...

Starting to think Sony was really on to something with the PS5 design.

I believe when it comes to reducing costs or mass producing something the PS5s design is easier to manage. That was probably one of Sonys goals when they made the hardware.

 

[Bernkastel]

He's lying to look better for regulators, or he's not, and Xbox is an even bigger money sink than thought.

Pick one

You played too much Mass Effect 3. Or you are a disgruntled Bioware dev who spends too much time with twitter warriors.

 

[reksveks]

Re the cost conversation. I think it might be interesting to consider the context of MS justifying the 30% cut in comparison to the MS PC store.

 

[MarkMe2525]

We can't believe a single word out his month.

We already know he offered a deal for 3 years extension. The fact that he has to offer a deal of any kind proves their intention.

??? All it proves is MS was willing to gaurentee distrubtion on Sony's storefront for 3 years. One cannot derive conclusion of future intentions from the agreement. It would be foolish to expect some sort of deal without term limits. Such a deal wouldn't allow MS the opportunity to look at the dollars and cents of the agreement and reevaluate.

 

[Elios83]

Seems like a lot of intentional downplaying around Gamepass like suggested by their legal team.

It won't go over 15% revenues, already saturated on consoles, just a choice, prices will go up, hardware sold at 100$-200$ loss (and yet Series S is getting discounted with a game included while it's already the cheapest console on the market).
COD like Minecraft, f2p is the future, Activision deal is now not to provide exclusives to Gamepass but to get King and break the Apple/Google duopoly

Basically he's painting the business like some kind of failure with the importance of Gamepass being marginal at best.
Most of this is fake, it's because they know that regulators are investigating on them trying to create a dominant position with gaming subscription services and they want to paint an other picture while diverging attention to the mobile business.

 

[reinking]

Seems like a lot of intentional downplaying around Gamepass like suggested by their legal team.

It won't go over 15% revenues, already saturated on consoles, just a choice, prices will go up, hardware sold at 100$-200$.
COD like Minecraft, f2p is the future, Activision deal is now not to provide exclusives to Gamepass but to get King and break the Apple/Google duopoly

Basically he's painting the business like some kind of failure with the importance of Gamepass being marginal at best.
Most of this is fake, it's because they know that regulators are investigating on them trying to create a dominant position with gaming subscription services and they want to paint an other picture while diverging attention to the mobile business.

It does seem like a step back from the hype phase of Game Pass. I am sure some of it is to tone it down for regulation but I do wonder if some of it is a pivot toward mobile. They have to get that hype train moving that direction if that is the case. Honestly though, if MS is really going to pivot and go against Apple and Google good luck to them.

 

[SportsFan581]

I wish the Minions would take note.

MS's lawyers would have to notice first.

Legal department clearly takes a completely different tone.

 

[James Sawyer Ford]

-Cost of creating games has gone up. Talks up Game Pass. Will have to raise prices on certain things. Not this holiday.

Wait...WHAT?

But I thought GamePass was profitable?

Why do they need to RAISE THE PRICE if this is the case? Legions of people told me to trust Phil at his every word.

Just goes to show you I WAS RIGHT on the spinning Phil was doing with respect to GamePass profitability excluding the cost of game development.

 

[SportsFan581]

Wait...WHAT?

But I thought GamePass was profitable?

Why do they need to RAISE THE PRICE if this is the case? Legions of people told me to trust Phil at his every word.

Just goes to show you I WAS RIGHT on the spinning Phil was doing with respect to GamePass profitability excluding the cost of game development.

So if your costs go up and you raise prices.... it means that you were never profitable not that you moved the pricing to remain profitable? This just in, Sony never made money on first-party software raises prices to $70 as a result!!!

 

[supernova8]

Taking notes:

-Buying video games is far larger than Game Pass for Xbox.

Didn't watch it (sorry OP, aint got time for that, otherwise how can I drive-by? )

Just on the above point - pretty surprising since I would've thought getting Xbox and not getting Game Pass makes no sense (assuming someone already decided to go Xbox for some specific game).

 

[adamsapple]

Wait...WHAT?

But I thought GamePass was profitable?

Why do they need to RAISE THE PRICE if this is the case? Legions of people told me to trust Phil at his every word.

Just goes to show you I WAS RIGHT on the spinning Phil was doing with respect to GamePass profitability excluding the cost of game development.

Holy crap don't pat yourself on the back too much lol, he's talking about raising price on some things, not game pass only.

And you're still wrong about putting game dev cost solely on game pass, it was a bad argument then, it is a bad argument now.

 

[James Sawyer Ford]

Holy crap don't pat yourself on the back too much lol, he's talking about raising price on some things, not game pass.

And you're still wrong about putting game dev cost solely on game pass, it was a bad argument then, it is a bad argument now.

I never said SOLELY. You just can't read and created a false argument. The bottom line is that Game Development SHOULD be a factor in evaluating GamePass profitability.