Support NeoGAF

[Eddie-Griffin]

Phil Spencer says the Xbox business will become ‘untenable’ if it remains ‘irrelevant’ on mobile | VGC

The Xbox boss claims the Activision Blizzard deal is primarily about Candy Crush…

www.videogameschronicle.com

He said that over the past five or six years, all of the growth in the $200 billion global gaming business has come from the mobile segment, while console and PC revenues have remained “relatively flat”.

Spencer, asked about a recent comment Microsoft made to a regulator about being a small player on PC and mobile, said: “I don’t think anybody needs that quote from us to understand how irrelevant we are in mobile. Anybody who picks up their phone and decides to play a game would see that on their own.

“And PC as well, our trials and tribulations over the last five, six years in PC gaming are well kind of documented, and we continue to work at it, and I love the work that the Xbox app team has been on, and our PC studio is doing great work on PC, but it takes time.”

He added: “In terms of the Activision opportunity, and I keep saying this over and over, and it is true, it definitely starts with a view that people want to play games on every device that they have, and in a funny way, the smallest screen that we play on is actually the biggest screen when you think about the installed base in phone.

“That’s just a place where if we don’t gain relevancy as a gaming brand—we’re not alone in seeing this—over time, the business will become kind of untenable, for any of us. If we’re not able to find customers on phones, on any screen that someone wants to play on, you really are going to get segmented to a niche part of gaming that running a global business will become very challenging.”

Spencer added: “As a percent of the overall gaming business, the console business is shrinking, because the overall business is growing and console stays relatively flat as a business, same thing with PC.

“And then when you look at the largest gaming companies out there, Tencent being the biggest gaming company in the world, so much of their revenue comes from mobile, and then they put their business success that they’ve earned through the work that they’ve done into the market acquiring other studios at a very fast rate.

I think the issue is Phil is trying to act like the two parts of the industry are merging but mobile is still a separate part of gaming with it's own outlets, analysts, and research organizations with different goals.

I do understand that Activision will 9bring in a lot more revenue for Xbox, but there are thing Phil can do for PC and uh...console to increase Xbox revenue without mobile, or with modest investment in mobile than trying to act like the two sides are fusing together when the audiences are mostly drastically different.

For example, let's take a look at all of this year for Xbox Series consoles that are console exclusive or even AA minimum first party major releases

1.






14.






44.



With all these games you can increase revenue with the proper advertising. 2022 is a big year and some of these titles could potentially be ported to mobile gaining extra revenue without compromising game design or the development process, and companies like King could be used for more mobile intensive games, Keep the audiences separate I say. Out of the 44 imaginary games I think that my favorite is number 32 the most, but still Phil should work on releasing more games of variety, not just the imaginary type as we have now as enjoyable as those are, because by also releasing real tangible games you can make non-imaginary money on sales, thus making the Xbox business more viable without overdoing it on mobile.

Just a thought.

 

[Arsic]

This mobile market needs to be Asian market focused . The shit just doesn’t work here in the west like it does there.

Even a game like path of exile is far more greedy out in the Asian version.

If they want growth there they need to acquire a few companies making really good gacha games.

Is Phil ready to create waifu collector games ?

 

[N0S]

 

[feynoob]

Games at this point are getting more expensive to make.
Even Sony is branching out their business.

Though, Phil seems to have smoked some weed here.

 

[Topher]

Mobile makes me...

 

[feynoob]

Take away his ability to do interview in the process too.

 

[DeepEnigma]

In before the spin.

 

[Skifi28]

Mobile mobile mobile. Gamepass gamepass gamepass.

 

[jm89]

CMA got him spooked huh?

 

[Roxkis_ii]

It's everything but getting 1st party games out the door. Smh. This dude isn't going to learn.

 

[Fess]

Wow. I stopped playing mobile games sometimes after Infinity Blade, Dark Nebula and Inotia 2. That was the peak of mobile gaming for me. It was awhile ago.

 

[Swift_Star]

 

[laynelane]

I've never really thought of Tencent as a gaming company. I know they buy a lot of gaming companies, of course. That aside, mobile is very lucrative so I can see why many companies are interested in it.

 

[R6Rider]

 

[The_Mike]

The more you push on candy crush Phil, the more it's likely that a demand of candy crush on playstation will be one of the requirements for the deal to get through.

 

[ChiefDada]

For example, let's take a look at all of this year for Xbox Series consoles that are console exclusive or even AA minimum first party major releases

1.






14.






44.

CMA got him spooked huh?

Lol, apparently! But I've had the sense they've been unsure since Nadella's "competition" quip.

 

[mejin]

What a cold-blooded snake. AB acquisition should be blocked asap.

 

[James Sawyer Ford]

Doesn’t make sense, he said GamePass was profitable

 

[Hendrick's]

Did he turn to the camera an wink while saying this? I'm sure regulators know by now the Acti-Blizz deal is a mobile play.

 

[DeepEnigma]

The more you push on candy crush Phil, the more it's likely that a demand of candy crush on playstation will be one of the requirements for the deal to get through.

Bet you're a CC fan now.

 

[Pelta88]

Another completely disingenuous PR statement from Phil Spencer.

He wants us to believe that mobile, a market XBOX barely caters to, is life or death for XBOX?

 

[Kacho]

Papa Phil playing 4D chess in this interview. What a boss.

 

[tommib]

Phil read the GAF thread about Apple making more money on mobile gaming than everyone else combined. Always knew he was a GAFER.

 

[Interfectum]

Well he promised the CEO of MS billions of gamers and will not be able to deliver that with Game Pass alone. He backed himself into this corner.

 

[adamsapple]

Doesn’t make sense, he said GamePass was profitable

Game Pass is ~15% of the total gaming divisions / xbox revenue ..

 

[Clear]

Doesn’t make sense, he said GamePass was profitable

Creative accounting and PR messaging. As I've written in the past turning a profit isn't what's important. Its profit level relative to opportunity cost, because if you are investing huge sums into a marginally profitable division investors are (rightfully) going to question whether those funds couldn't be deployed more effectively.

 

[Topher]

Phil read the GAF thread about Apple making more money on mobile gaming than everyone else combined. Always knew he was a GAFER.

Hiding in plain sight.

 

[The_Mike]

Phil read the GAF thread about Apple making more money on mobile gaming than everyone else combined. Always knew he was a GAFER.

His account is Ezekiel_

He always laugh at your comments, but behind the screen he takes all the notes so he doesn't look suspicious.

 

[buenoblue]

It's everything but getting 1st party games out the door. Smh. This dude isn't going to learn.

Exactly. Why don't you use that 79 billion to make some fucking games!

 

[solidus12]

Makes sense, Google and Amazon are his competitors

 

[Crispy Gamer]

Lol, apparently! But I've had the sense they've been unsure since Nadella's "competition" quip.

Nadella said the quiet part out loud... I think without that weird diatribe the deal was on its way to being approved but that definitely raised a red flag as if they intend to take something away, which would be their right after spending that type of money lol

 

[Ozriel]

Is it really that hard to read what he said?
Here, I’ll reproduce it for you again

That’s just a place where if we don’t gain relevancy as a gaming brand—we’re not alone in seeing this—over time, the business will become kind of untenable, for any of us. If we’re not able to find customers on phones, on any screen that someone wants to play on, you really are going to get segmented to a niche part of gaming that running a global business will become very challenging.

What he’s saying is that console share remains relatively flat, and mobile keeps growing. So he believes that anyone that doesn’t get a foothold in mobile will eventually become a bit player in gaming as mobile continues to dominate.

You can argue with that (and certainly I don’t believe mobile is growing THAT fast) but these takes about Gamepass etc don’t make any sense.

Worth noting that for Spencer, ‘mobile’ also includes streaming via cloud to mobile phones.

Headline is also misleading. In Phil’s statement, he’s pretty much talking about all the traditional console makers. Not just Xbox. Hence the ‘any of us’ part

 

[SlimySnake]

lol come on. Maybe dont go out there spending $80 billion on console focused publishers if you dont think you can survive without mobile.

 

[reinking]

https://www.globaldata.com/data-ins...lecom/market-size-of-mobile-gaming-in-the-us/

• The market size of mobile gaming in the US reached a value of $13 billion in 2021
• US ranks third largest player in the global mobile gaming market with a share accounting for 14% of the global market size in the mobile gaming segment
• The US’s mobile gaming market saw a CAGR of 21% during 2017-2021

*no idea if it is correct or not. I just did a quick google out of curiosity.

 

[ikbalCO]

They should have just bought King and move on. The whole activision business is just to hostile and way big of an investment on exlusivity for a company that should have went sega way 5 years ago.

It is sad you cant lobby (bribe) cma and eu the way you do in us :///

 

[feynoob]

Doesn’t make sense, he said GamePass was profitable

Mobile is just insane money at the moment.
MS were stupid not to invest it early.
Activision is making billions, while making low investment games.

 

[Ronin_7]

Xbox is already not sustainable, it's ONLY sustainable because Microsoft deep pockets, I wouldn't be surprised if losses are in the billions yearly.

 

[feynoob]

https://www.globaldata.com/data-ins...lecom/market-size-of-mobile-gaming-in-the-us/

• The market size of mobile gaming in the US reached a value of $13 billion in 2021
• US ranks third largest player in the global mobile gaming market with a share accounting for 14% of the global market size in the mobile gaming segment
• The US’s mobile gaming market saw a CAGR of 21% during 2017-2021

*no idea if it is correct or not. I just did a quick google out of curiosity.

Loot boxes on mobile games are insane these days.
People are spending $100 on packs like it's nothing.
Some even spend $5k or more a year on a single game.
Plus, mobile have insane amount of userbase. So free consumers.

 

[Ozriel]

lol come on. Maybe dont go out there spending $80 billion on console focused publishers if you dont think you can survive without mobile.

You don’t know one major arm of Activision Blizzard King is one of the biggest mobile studios in the world?

On an enthusiast forum, for that matter. That’s wild.

 

[Punished Miku]

Papa Phil playing 4D chess in this interview. What a boss.

Yep

 

[tommib]

Xbox is already not sustainable, it's ONLY sustainable because Microsoft deep pockets, I wouldn't be surprised if losses are in the billions yearly.

adamsapple

 

[FrankWza]

In before the spin.

 

[feynoob]

You don’t know one major arm of Activision Blizzard King is one of the biggest mobile studios in the world?

On an enthusiast forum, for that matter. That’s wild.

That was always the case. People here are just hung on COD.
Still, Phil needs to shut up.

You dont need to mention this shit every time.

 

[Bonfires Down]

Then, uh, why isn't he making mobile games. Yeah they have Game Pass streaming but the mobile crowd has spoken and they want F2P gachas, not whatever Phil has.

 

[DeepEnigma]

 

[N0S]

adamsapple

 

[GHG]

Mobile required if not the business is untenable.

F2P the future, not subscriptions.

 

[adamsapple]

adamsapple

 

[DeepEnigma]

Mobile required if not the business is untenable.

F2P the future, not subscriptions.

That "4D chess." In plain site.

 

[feynoob]

Today is not your day.
You allowed Phil to have interview, without supervision.
You forgot to keep him locked.