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Microsoft 'investing aggressively' in gaming says Satya Nadella

A few days ago, Mat Piscatella, an industry analyst with The NPD Group, said that the Xbox One X was "performing phenomenally" this year. NPD tallies game and console sales in North America. This news came after Microsoft announced that it had acquired acclaimed developers like Playground Games, Obsidian Entertainment, and inXile Entertainment. This aggressive expansion is unprecedented for the company, and seems to indicate a desire to go for market leadership, especially when it comes to gaming subscription services like Xbox Game Pass.

According to a report by WCCFtech, Microsoft head Satya Nadella discussed the company's gaming ambitions during the yearly shareholders meeting where he announced that Microsoft's gaming revenue exceeded $10 billion during the last fiscal year. The report added that Nadella talked about the company's plans to aggressively invest in content and cloud services for gaming. He said that he was "pursuing an expansive opportunity from the way games are created and distributed." You can read an excerpt below.

In gaming, we're pursuing an expansive opportunity from the way games are created and distributed, to how they're played and viewed. We're investing aggressively in the content, community, and cloud services across every endpoint to expand the usage and deepen engagement with gamers, including the 57 million monthly Xbox Live users. Finally, we added seven new gaming studios to bolster the first-party content for fast-growing gaming services like the Xbox Game Pass subscription service as well as Mixer.

It's great to see that Microsoft is committed to the Xbox division. Hopefully we'll see quality first-party exclusives on the level of The Legend of Zelda: Breath of the Wild and God of War soon. WCCFtech added that another Microsoft representative further emphasized the company's committed to this space. You can read the comments below.

Today, four billion people are connected to the internet and over two billion play games online. Over the next decade we're going to continue to create amazing content and games, invest in the cloud, and build communities that allow anyone to participate. We have a mix of incredible games for people of all ages, but we want to make it easier to discover new games and play them either on your Xbox or your PC.

Hopefully this will be a fruitful endeavor for Microsoft going forward. We desperately want quality content. In order to sustain this growth, the company needs to make sure that it always has "the most powerful console in the world" during any given generation. Hopefully its long-rumored "Xbox Scarlett" will maintain this advantage. We should know more about it at E3 2019 in June.

Keep an eye on WindowsCentral.com/Gaming for all the latest in Xbox and Windows 10 gaming, accessories, news, and reviews!

Asher Madan handles gaming news for Windows Central. Before joining Windows Central in 2017, Asher worked for a number of different gaming outlets. He has a background in medical science and is passionate about all forms of entertainment, cooking, and antiquing.

58 Comments
  • They have to, it's the only consumer market they have a presence in...
  • Talk about seeing the glass half empty, eh
  • Microsoft has been saying this about gaming since the 1990's. Every time they say they're "full in" or "committed" or some other buzzword/word salad of the day, it ends up being the opposite.
  • Apparently you don't get out much ever heard of the Surface line
  • yeb I heard what happened to Windows Phones!
  • Hahahaha. Surface is overtaking Android tablets and iPad tablets. And the future which is Cloud they are destroying the others on. Would you like to know how much the average internet poster knows? MS just became the world's biggest company again. Overtaking Apple for top spot. Not bad for a company who everyone said would die because they don't make some plastic phones. Hahahahaba https://www.dailymail.co.uk/wires/ap/article-6448205/Microsoft-surpasses...
  • Wow - you'd think this would be the top story at Windows Central.
  • Thank you for the link.
  • They are battling with Apple for 1st and 2nd most valuable companies in the world. Where is Sony? Your comment is a joke. Gaming revenue is up and they've purchased gaming studios. And the X1X is selling well. The Sony cult will keep hating on them though.
  • The big issue with the Microsoft gaming strategy is that is almost entirely ignored mobile. This market is the fastest growing gaming market, worth $50 billion per year. Look at his quote, he specifically omitted mobile. There are a few different pieces to this that I think Microsoft needs to address. 1. There needs to be a concerted effort to bring the top mobile games into the Microsoft Store. Very few of the top mobile titles are available on any Windows 10 device. 2. The Microsoft Store makes it impossible to differentiate mobile games from traditional PC games. There is no way to filter games by input method for example. How can anyone find touch first mobile games? 3. Microsoft should be investing in mobile game studios and creating first party, cross-platform mobile games. It seems the opposite is happening with the cancellation of Age of Empires: Castle Siege. 4. Microsoft should be making more of an effort to connect with mobile developers. I recently attended Games Forum Seattle, a premier developer conference centered around mobile games. Microsoft had zero presence, even though it's in their home town. 5. Related to the above, Microsoft did recently purchase PlayFab, which was a step in the right direction. But now PlayFab isn't representing the company at mobile game development conferences. 6. The Xbox Live stack should be available to 3rd party developers making cross-platform mobile games. at this time it's only available for use in Microsoft Store games. The only Xbox Live enabled cross-platform games are first party titles such as Wordament and Solitaire. To sum up, Microsoft is simply not investing in this the mobile game space. It is the fastest growing segment in gaming. They need to start addressing the points I made above to start taking a piece of the very large pie. Hopefully we will see this happen, but there aren't any signs that it will at this point.
  • Maybe if they quit this silly business with Andromeda not-a-phone and focused on a "most powerful in the world" portable game player?
  • Even if they did that, they still have the problem of no games for touch. In my opinion this is a pretty huge gap in the Microsoft Store.
  • They could start with running their xBox Game Pass titles in smaller version. The portable would ideally have a game controller built in with haptic feedback of course. Such a device would position them well for game streaming when that comes to be... and it will happen soon. But it could also play the lighter touch-centric games found on phones today, which devs won't port to Windows until there is a device to play them on.
  • The device can be both, talk about short sighted.
  • Any device that tries to be both won't be good at either. It's best they just stick with making a crazy powerful portable game player. Primarily a player for core gamers that can play all Game Pass or Play Anywhere titles (Forza Horizon 4, Rocket League), and only secondarily a touch-centric player (Candy Crush, Flappy Bird).
  • Better yet... stick a 256GB SSD in it and let ppl load any title from their xBox onto it.
  • Let me ask you something - Do you use one phone for calls and another phone for texts? You seriously have less faith in Microsoft than you portray.
  • Had Microsoft committed to make their Mobile OS the de facto mobile gaming system from the beginning, like they said they would, we would be talking about how the next Lumia Device is going to be an even better gaming handset and how the next update to Fortnite would run even better on it.
    Instead, here we are lamenting how they have no Mobile OS nor any presence (gaming or otherwise) in this space at all. Good job Microsoft. Good job 👍. /s
  • That was never going to happen when they were stuck using outdated Snapdragon SoC's.
  • Possibly, but the mobile gaming market isn't that performance driven, so while the presence of games is important to a mobile platform, the performance of a particular game is not that important compared to other software. I do think there might have been opportunity there though, but MS just failed on multiple fronts with mobile. XBox though, is looking pretty good, even with One not being a sales hit compared to competition. As long as MS remembers to put the gamer first and not force their own ideas on them (digital only, Kinect)(actually, they had the same problem with WP), and goes back to basics like they did with One X, which is the best home console on the market in terms of hardware, and just adds options for gamers on top.
  • No. Microsoft shouldn't waste time on crappy mobile games.
  • Microsoft should defenetly not do that, Microsoft needs to differentiate and not just copy Apple and Google, instead of focusing on garbage mobile games filled with predatory monetization that are already considered gambling in some countries, they should focuse on bringing AAA games to the store and port those games to ARM so "Andromeda" can be the PC version of handheld consoles instead of the garbage mobile ecossistem where they can't even sell exceptional games like Lara Croft Go for 1$.
  • Yep.. They have to start back investing in mobile.
  • Ignore the fanboy haters giving you all the thumbs down, Dusteater. I hear you.
  • Microsoft is investing heavily in a streaming service that will allow console quality games to play on devices such as smartphones... So to say that they have no mobile strategy is completely false.
  • PlayFab isn't a game developer... Anyway, here's what I get from the papers, about 2017, the gaming market share between console, mobile and pc. In US, console (package+digital) is the biggest, 2nd is mobile than pc's in the 3rd place.
    In EU, it's console, pc, mobile.
    In Asia, it's pc, mobile, then (near-dead and is shrinking YOY) console. xCloud is on the way, and judging by the timing and programming logic, "GamePass for PC" is most likely, a byproduct of xCloud. And it will not stop at PC...
    If GamePass for PC is what I think it will be, it will help grow XPA (esp in indie space).
  • I wonder will it be same commitment and aggression they put into Windows 10 mobile.
  • Let's hope not...
  • I remember that time he said "Mobile first" oh boy was I excited , being a WM10 owner myself, which I still use in hopes of something else of a mobile product from Microsoft because everyone has the freedom to use what they want..(just putting it out there before the other kinds of haters and trolls throw out their 2cents of downvotes) but here we are today, mobile got trashed and it seems he's moving on to gaming ... I just pray to god that if he were to ever try to slash anything again, someone should notice it and slash this error out of the system.. I use windows 10 and as a huge fan of win10, I am truly amazed at the fact that they crapped up the October update as well, if we count the messes that has happened during his time, I'd say we'd have been better off with ballmer even though he was just too crazy and too underestimating of the competition, he'd at least not cut off products just cause a few failures and keep trying, most of us know that the light bulb wasn't made in one or two tries, it took a lot of mistakes to realize how to do it the proper way, WM10 it was just getting better and more open.. right before we got mr.imsoscaredoffailingimgonnastopthisproduct. didn't take 2 years before people started yelling out how bad Microsoft services became in the mobile section, after all they themselves don't have a native device so how can they even implement mobile games or whatnot if they don't have a native product/device in order to figure out how it should be made/improved or what advances would really help create a better product..
  • Aggressive, positive, and taking calculated risks. This is the Microsoft we want to see. Not the one that only stays in their comfort zone of enterprise software and cloud. :-) This is the Microsoft that inspires strong fandom and sets the pace for the industry to follow. They have the war chest, and the devs, and the platform to do it well. Looking forward to quality results across the board!
  • I guess gaming is next thing on Nedella's kill list.
  • I guess so too.
  • Nadella has only rightly killed off initiatives that were dragging the company down, in areas that they were not strong in, and shouldn't have been involved in to begin with. The company is not distracted anymore... chasing at cars so to speak. Gaming is one area that they've a long history of being competent in. Plus, the Game Pass subscription model and cloud streaming initiatives they are pursuing are right up MS' alley. So when he says they're aggressively investing in it you can believe it.
  • To add to this, the things he has killed things existed before him. Anything that was started under him has not been killed.
  • Seriously, these people don't know what they're talking about. Microsoft is currently the most valuable tech company. They're just ahead of Apple in market capitalization.
  • When it comes to Microsoft...I'll believe it when I see it...and whatever comes out of Nadellas statement has been up and running and profitable for a few years. Then maybe the "burns consumer" stigma will have dissipated. Looking forward to the attempt at least
  • Hopefully this will lead to finally getting quality MLB licensed baseball game, like Playstation's The Show.
  • I can't MF Sony enough for withholding baseball from us. It's almost like they don't like money........ MLB the show would sell 10 million copies if they released it on XB1.
  • In recent events Google has shown interest in entering the game market. Via streaming. Make no mistake. MS are no longer looking at Sony or Nintendo. It's very clear MS are going to leverage their huge cloud infrastructure to move ahead of Sony and Nintendo in that field with relative ease. The reason MS has looked at first party content? To kill Google right out of the gate. Google are a much much bigger threat to MS going forward in gaming. But MS have made sure they have a very very big advantage. 14 First Party Studios now. And talk of another in I/O Interactive. Sure it will help in the console market (which will slowly turn to streaming, whether you like it or not) but 100% this is to go against Google. They are doing what Netflix did ro movies and Apple did for phones. Getting way out in front for gaming as a service.
  • Not just Google, but also Amazon.
    They both have huge back-end computing infrastructure and can leverage them just like MS so MS has to get out in front of them.
    Google will OWN mobile-gaming, and MS is smart not to invest anything in that highly volatile market. As long as Apple's profits depend upon the $3 Billion/year Google pays them to remain the default Search Engine on iOS, they won't really care and will be happy with their 30% cut of all games sold via the App-Store.
    Amazon is the wild-card here. Everthing they have TRIED to do has pretty much been a failure.;
    Fire Phone (disaster), Fire Tablets (mildly successful but extremely limited), streaming music (ho-hum), streaming video (Prime Video is waaaaaay behind Netflix and will remain so.) BUT they have TONS of cash to spend and are not shy about trying new things.
    Nadella is willing to spend big and spend fast on ANYTHING that can leverage their massive Azure computing systems and streaming games and a disc-less XBOX will do just that (meanwhile, Comcast, Verizon, et. al. are licking their chops at the prospect of streaming gaming and the data-overcharge profits it will generate. Especially when 5G gets rolled out.)
    Interesting times ahead.
  • With Project Xcloud releasing 2019, you will be playing on your mobile. With an adapter using your Xbox controller. The potential for Xbox to reach a billion users is definitely there in the future. Gamepass plus Xcloud means you can play First Party Xbox content anywhere you want. The fact that Google trialed with AC odyssey this year shows Google see this as the future. Not current traditional mobile games. Difference is Amazon and Google don't have any exclusive content. And now MS have so many studios it would take 10+ years before Amazon and Google could have anywhere near enough Exclusive teams to match them. I honestly do not see how anyone can beat Xbox at this point in as the streaming game generation kicks off worldwide.
  • The XB1 is still less popular than the competition Switch and PS4.
    In PC gaming Win10 UWP's XB is so far behind the competition like Steam. The XB1 is currently going through such a major exclusives, they just bought news studios recently after losing quite a few mid gen. I think we'll have to first wait to see what these studios can produce and see them competing with the current competition before thinking of the future...
  • Still, Xbox Live has around 60m active users. Console numbers don't really mean anything. What will happen if you have to re-buy every app and game every time you switched to a new phone? "The other OS is doing a little bette", majority will jump ship without giving much 2nd thoughts. What binds user? One's investments ( game library, game progress, friends), service. And if you are familiar with the matter (win10+uep+ free unlimited cross-platform cloud storage, BC, FC XPA, GamePass, xCloud, GamePass for PC / mobile, Mixer MsStore integration, Mixer games, Mixer user save integration, e-sports), you know where MS's heading, and what kinda infra competitors lacks. * GamePass for PC will help XPA adaptions esp in indie space.
  • Sorry but xbox live active monthly users doesn't really mean much. This doesn't mean revenue or income. Do you know that this number includes some switch, android or iOS users? Do you know that by MS's definition of active user a person connecting once in the last month of the quarter is considered an active user? Do you know that I was considered an active user by opening once solitaire on PC even though I didn't spence a single buck? You can keep mentioning this same points again and again, it doesn't change the fact. The fact is that even with all the features and stuff you mentioned the PS4 is still more popular than the XB1.
  • Why do you think mobile game makers, online game makers, online service provider, YouTube, Google ads, Facebook value DAU, MAU whatever AU that much?
    Why devs want cross-play/save? 60m prob means nothing to you, but means something to us and to our section leaders. If MS can push GamePass to PC and mobile... will help not just Xbox division. Merit to various departments.
  • So why don't they communicate profit? That's the true numbers.
    They only communicate sales or number of players when they want.
    If active users is so important why don't they do it like steam?
    Provide the numbers of players playing a game in real time.
    Why don't they show concurrent numbers? 60m doesn't mean nothing if there is not profit behind.
  • Revenue exceeded 10b in fiscal 2018. So, If I were running MS, should I care about what Sony's doing? Instead, I should be focusing on my "reach", the ability to "keep", "unique skill set / infrastructures" and eSports.
  • You forgot to mention that the echo line from Amazon and Alexa have dominated the personal assistant and smart home category for awhile now. Prime music unlimited is better than you suggest. What ever happened to groove music? Oh yeah it was dumped in the trash.
  • @Jeffrey
    I don't think he forgot, he probably just chose to ignore it as he promotes MS.
  • Amazon is a very interesting wild card with crazy amounts of cash that allows them to grow into multiple markets. I see Microsoft and Amazon being real good frenemies against the Juggernaut that is google.
  • What has become of Satya's adage of "Cloud first Mobile first"? I am not really an industry watcher, but if it comes to cloud services I wouldn't be surprised if Microsoft is on top on how advanced these service offerings are. When it comes to mobile, they are definitely lagging behind and are working on the next big thing beyond the curve. If they are really going to make it to market in time seems dubious. I agree with another reporter that Microsoft may have made a mistake to move forward with only 1 OS. I feel Windows 8 should have been a fork for mobile specific from the legacy Windows and have been called Live OS. The Live brand still exists in the url of many of their webservices which ones used to carry the Live brand. Anyway, we will see if OneCore and Cshell are going to facilitate the rebound that is needed. To me it seems that smart assistant and home automation are lost grounds already.
  • Strategies tend to change after they've failed. Microsoft is still cloud first and that's not going to change.
  • Nadella is pursuing a "mobile" first strategy, but not the way Apple and Google define mobile. For MS mobile means... porting their popular apps including many Office 365 apps to iOS/Android/Chrome OS... creating the popular MS launcher for Android... embedding Bing search into Swift Key, working with Qualcomm and OEMs to bring WoA devices to market with Sim and eSim based LTE... and Surface Go (especially the LTE Version).
  • Well, I wouldn't distrust what Satya is doing. MS have overtaken Apple is the most valuable company in the world. And are now investing massively into Xbox. And everyone on the internet thought they would die off cause they missed the smartphone era. Not only that Surface is the only tablet to grow marketshare every year. iPad and Android are in decline in the tablet sector.
  • Awesome, hopefully this means we will see a resurgence of Xbox Entertainment Studios. There is alot of money to be made in merchandising and collectibles. XES will also all them to create even more compelling franchises and through animated story telling for instance they can bring even more people into xbox and it's associated services thus creating brand awareness as well as mind share. I know people who started playing Halo after watching Forward Unto Dawn and were excited when Cortana came to Windows phone in the UK... but sadly were left dissapointed when we got Cortana's posh twin instead lol.
  • They should buy Warner Bros/DC so they can have exclusive Batman/Superman/Wonder Woman/Flash content etc. The amount of hype around the PS4 Spider-Man game has been hard to miss, even for a non-console owner. And yes I know, they can't or wouldn't buy DC just for that, it would be an insane amount of money. It's a nice thought though from all the no-name 'AI' stuff they've been buying lately.
  • Ballmer created Xbox entertainment studios but that was shut down. Sadly, some people don't see beyond "5 minutes".
  • @Jupast
    hmm, but tell me how is that good for the average consumers and gamers?