What you need to know
- Microsoft outlined its gaming strategy recently to press in a closed presentation.
- The showcase covered a range of topics, including how they intend to reach out towards the 3 billion-strong gaming audience.
- Microsoft noted that they want to add one exclusive Xbox Game Studios title to Game Pass per quarter, signaling an intent to acquire even more talent.
Microsoft has a big E3 2021 presentation on the horizon, where it will showcase the biggest and best its Xbox Game Studios have to offer. Before then, though, Redmond shared a digital presentation with press to outline some of its wider strategy and philosophies when it comes to their modern gaming enterprise.
The full summary of the presentation can be found here, but I wanted to break out this piece separately because it's so important for various reasons. Xbox Game Studios lead Matt Booty said directly that it's Microsoft's intent is to have one major exclusive from its first-party studio stable launch into Xbox Game Pass every single quarter. That's a fairly tall order, and really underlines Microsoft's efforts to acquire more and more studios into its first-party roster.
Microsoft shared a range of interesting statistics about Xbox Game Pass, confirming that subscribers actually buy more games, not fewer. Xbox head Phil Spencer noted how Xbox differs from Netflix in this regard, offering consumers a direct choice through their platforms to acquire content permanently, digitally, and not just in a streaming capacity. It's this fact that has seen developer's digital sales tick up despite being in Game Pass, with MLB: The Show dominating the April sales charts. It seems the virality afforded by access helps buoy retail sales.
To that end, Microsoft has clearly projected an opportunity. More games in Xbox Game Pass likely means more retail sales to boot. As a discovery engine, Xbox Game Pass almost reinvigorates the experience of the arcade machine or Blockbuster video, letting you try-before-you-buy with upfront knowledge that a lot of these experiences, and progress, will leave the service potentially after a few months. But just like Netflix, Xbox Game Pass has its own "Originals" which will remain in the subscription forever, and to facilitate that, they want a new exclusive title every single quarter.
Xbox Game Studios lead Matt Booty reiterated that they're continuing to invest in their core studios to build a "predictable pipeline" of high-quality games.
Xbox CFO Tim Stuart hailed the growth being reflected in Microsoft's financials, but conceded that Microsoft had to reach new customers in order to see continued growth, stretching beyond the quite-possibly-saturated 250 million-strong console audience. The wider market incorporating mobile devices and PC stands at a staggering 3 billion, and to reach them, Stuart sees an opportunity for Microsoft to provide "meaningful value" to audiences in new demographics and geographies. Stuart admitted that Xbox went through a period of refocusing the business, after losing sight of their core mission of delivering the "best gaming experience."
Stuart sees Xbox in a period of execution now, delivering the experiences from the likes of Bethesda, Ninja Theory, and other studios they recently acquired, to bolster the Xbox name as a destination for top-shelf gaming experiences.
Beyond that, Xbox Game Studios lead Matt Booty reiterated that they're continuing to invest in their core studios to build a "predictable pipeline" of high-quality games. Booty also noted that acquisitions are still on the table, and emphasized that they're taking a "disciplined" approach to acquisitions, focusing on studios that Microsoft had prior relationships with, alongside "a proven track record of new ideas." I've certainly heard rumors that more acquisitions are in the cards, and this could be the first sign that we could get a major announcement in that vein fairly soon.
"So, I think all of this is possible because Game Pass has opened up new opportunities for our teams," Booty said, "from tightly crafted single-player stories to worlds that evolve over years, our players can count on us to deliver great games." Booty also touted the autonomy Xbox Game Studios have, "all of our studios are creator-led, we want to give them the proper degree of autonomy so they can pursue their creative passion, and make the games they are good at making. The best thing we can do is provide the guidance, resources, and support to our studios, so they can make the best entertainment."
It really does feel like Microsoft has all of its chips in play to see astronomical growth in the gaming sector in the coming years. The missing piece is, of course, all of those juicy games. And we'll see more about that on June 13, 2021, at Microsoft's Xbox E3 showcase.
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