Microsoft reminds us how big the Xbox business is Dean

Microsoft won the Summer Game Fest award for the best games and widest lineup of upcoming titles for 2024 and 2025. It was an impressive showing for a company that looked like it had earned it. Trust betrayal this year.

In fact, Microsoft showed that the games it revealed at its own event could be bigger and better than Summer Game Fest, which saw two full hours of gaming from everyone. Many people said it was the best Xbox show ever, and I agree with that – despite there being no E3 this year.

It was a pleasant surprise, considering that people were wondering if the Xbox orb was a black hole or an explosion ready to go off.

After completing its $68.7 billion acquisition of Activision Blizzard, it laid off 1,900 people and then… It cut more jobs as it closed studios. It also left players confused about whether or not they would get Xbox exclusives. I was pleased to see that Xbox has several big games in production, which were revealed on June 9 at the Xbox Showcase. Titles like deathgears of war indiana jones, Flight simulator, Call of Duty: Black Ops 6myth, Stalker 2, Perfect Dark and many more. They finally got the players back on their feet.

Although the job losses were tragic, Microsoft showed that it still cared about making some of the best games it could for its core audience of Xbox fans. I would claim (of course, in hindsight) that I saw this coming. The roots of this were planted in the lessons of the past.

I remember Microsoft gaming business In its early stages. It started with Ed Fries, a developer who loved games and set out to build a real business within the software giant. It has evolved thanks to games like Microsoft Flight Simulator and Age of Empires.

Alex St. John and his fellow Beastie Boys friends used DirectX to enable gamers and game developers to access a wide range of video/3D graphics cards, audio devices, and other devices that ran on the Windows operating system, giving the PC flexibility that gaming consoles didn’t have.

While St. John got himself fired, more dissidents—Seamus Blakely, Ted Haas, Kevin Bacchus, Otto Berks, and Nat Brown—convinced Fries to support Xbox with games, and eventually convinced Bill Gates to sink billions of dollars into the Xbox gaming business. Gates and Steve Ballmer brought in adult supervision in the form of office expert Robbie Bach and internet charger J. Allard to the task of dealing with Sony and Nintendo. Microsoft tried to buy other companies such as Nintendo and Electronic Arts, but failed. Then it decided to limit itself to smaller companies like Bungie that it could buy.

In a way, they got the job done. I wrote a book about this, and a sequel to it as well.

The original Xbox took off thanks to Halo, but Microsoft lost about $4 billion on the first Xbox. It had to stop wrapping $100 bills around every console it shipped, so it rushed to launch the Xbox 360 four years after the first console. They have collected a very large number of games and game studios hoping to get the important game. As Microsoft put more people behind Bungie, it realized it had to shut down a bunch of other studios or cut ties with other developers. At one point, Microsoft had to try to beat Sony to the market when it only had 1,000 game developers while Sony had 2,500.

This was a platform game course. First, you have to open the tent wide and let in all the game studios in hopes of finding the killer app or tent pole. When you find it, you shut down the less important games and double down on the ones that work. This is how Activision finally figured out that it had 10 studios working on Call of Duty. Along the way, you’ll size your resources to match your ambition.

Allard, Fries, and Bach clashed over shipping Halo 2 with the launch of the Xbox 360. But that didn’t happen, with Fries insisting it needed time to cook. He got his way but then left as the internecine war became too much. He chose the route of releasing a Halo game once every few years, rather than going the route of releasing games on a faster schedule.

But the Xbox 360 launched so quickly, many consoles suffered a “red ring of death” thanks to the unleaded solder on the boards disintegrating. This resulted in a $1 billion write-down, effectively covering another $100 for each console sold.

We’ll move on from the forgotten Xbox One era, where Sony fell further in its supremacy over Microsoft, and Nintendo stole the market with the success of the Wii. During this era, Microsoft grew its gaming workforce to thousands of developers. But Sony had thousands more, and Nintendo was better. From God of War to The Last of Us, Sony has started to move away from great games.

I say all of this to say that console work is never easy. It has unpredictable cycles and is therefore not cycles at all. Navigating these obstacles has been more difficult in the past. After all, it’s worth noting that Microsoft now generates billions of dollars in profits from its gaming business.

What emerged through this crucible is just that Phil Spencer came into his own As a leader. He was promoted to run the gaming business and had it all in one — an entrepreneur, a genuine gamer, a trusted advocate for game developers, and someone who could convince his bosses that Microsoft belonged in gaming — all within the same man. As a designer and developer, Spencer could have argued with himself all day. But the outcome strategy was one that could be trusted by a boss like Satya Nadella, the Microsoft CEO, who opened his checkbook to Spencer.

Spencer began spending and brought in up-and-coming assistants like Matt Botti and Sarah Bond. They came up with the Xbox Game Pass blueprint for the subscription service, and went on a buying spree that Robbie Bach never got around to doing. They started small with deals like Brian Fargo’s InXile Entertainment. They bought Bethesda for $7.5 billion. And they got the biggest fish of all, Activision Blizzard.

But the new problems began with the Federal Trade Commission concerned that owning Call of Duty and other important games would give Microsoft an unfair advantage in gaming.

Microsoft unveiled its $68.7 billion deal to buy Activision Blizzard in January 2022. The FTC was so concerned that it delayed the deal and went to court. Microsoft won the deal and closed it after 21 months of waiting. At that time, the gaming market had changed, and Microsoft was stuck waiting for the deal to close.

The pandemic gains of gaming are beginning to unravel. The new consoles were not sold initially due to shortages and then due to consumer shock. By the time the deal was completed, the asset value may not have been high. But it was not possible to restart the deal without further delay. So Microsoft made its decision and found that it had to cut as many jobs as possible to be ready for more rainy days. like Matthew Paul As we’ve noted, a complex set of forces is putting many gaming jobs at risk, and Microsoft was just one of many companies that got its guess about upward growth wrong.

It then had to shift resources behind high-priority games. This led to more layoffs. In fact, the fact that it only reassigned one studio and closed several meant that it was in a state of panic or rush.

The upshot of all this was that Microsoft put fans into a state of panic based on its hints about doing fewer exclusives and more cross-platform games, its layoffs at some very talented studios and then its decision to hold off on game announcements until they ran. Certainly some of this was self-inflicted.

But Microsoft came out on top at its event in Hollywood. It has nearly 40 studios and 25,000 people in games. It showed that it has a wide range of upcoming blockbuster games – Gears, Call of Duty, Doom, Indiana Jones – and some serious expansions. It has brand new intellectual properties like South of Midnight and Mixtape in the works. It has one of the best potential Call of Duty games on the way. Not going out of work. It even steps up and says to Sony and Nintendo: “What do you have to offer?”

So you have little faith, what do you say now?