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Xbox head Phil Spencer told Microsoft to go 'all-in' on gaming when brand was threatened

Phil Spencer
Phil Spencer (Image credit: Windows Central)

What you need to know

  • A recent interview between Xbox head Phil Spencer and GameSpot revealed new information.
  • Spencer had to convince Microsoft boss Satya Nadella that Xbox was worth saving.
  • The Xbox One reveal debacle left many in the company demoralized in a way.
  • Spencer told Nadella to go "all-in" on gaming and the rest is history.

Yesterday, GameSpot released an interview with Xbox head Phil Spencer in which he discussed the early days of him becoming the Head of Xbox at Microsoft. Not only did he have to answer for the Xbox One reveal debacle, but he also had to make sure that the future was secure for the brand.

There was a time that Nadella was questioning what the future of the Xbox brand would be after the Xbox One reveal. Spencer told Nadella that the company needed to go "all-in" on gaming and the rest is history. What followed was the acquisition of Minecraft, the Xbox One X, and countless studio acquisitions. You can read the passage that outlines what Spencer had to do below.

A few months later, Spencer took over as head of Xbox. Whatever jubilation he felt was short-lived; a few weeks into the job, he got a call from Satya Nadella... 'I don't actually know a whole lot about why we're in gaming,' Nadella told him... Many developers who had worked on the Xbox One felt let down by Microsoft's big vision; it was, as some told Spencer, not in line with 'the soul' of what Xbox was. 'Satya was transparent that there could be a future where gaming isn't a business that Microsoft should be in,' Spencer told me... He looked at where Xbox had failed, and how the brand could be saved — if at all. When he finally called Nadella back, it was to say this: 'If we're going to stay in the gaming space, then let's make sure we're all-in. The last thing I wanted to do was run the gaming organization here as kind of an afterthought of the company and kind of half-in, half-out. Let's go fix who we are.'

Another somewhat surprising tidbit from the interview was how Sony called Spencer to make sure Minecraft wouldn't be pulled from PlayStation. You can read that story below.

He pushed Nadella to acquire... Minecraft, for $2.5 billion — a move that gave Microsoft exclusive control over the most popular game in the world... Microsoft announced the game would continue to be available on all platforms, including those of its direct competitors. It was an unprecedented move for a publisher of Microsoft's size. 'One of the first calls we got after the Minecraft acquisition was from Sony saying, 'Are you going to pull it off PlayStation?',' Spencer said. 'And I'm like, 'Why would I do that? People like playing it on PlayStation.'

This is a great interview that you should read in full. It also discusses Spencer's background and how he started working for Microsoft. It's always interesting to get a glimpse behind the scenes because we always learn more about the gaming brand.

Huge shoutout to Klobrille for the tip.

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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.

38 Comments
  • 'I don't actually know a whole lot about why we're in phones,' Nadella told him.. ~ Windows 10 Mobile 'I don't actually know a whole lot about why we're in fitness,' Nadella told him.. ~ Microsoft Band and Microsoft Health/Health Vault 'I don't actually know a whole lot about why we're in the streaming music business,' Nadella told him.. ~ Groove Music Streaming/One Drive Music Streaming 'I don't actually know a whole lot about why we're in ebooks,' Nadella told him.. ~ Microsoft Store eBooks 'I don't actually know a whole lot about why we're in HTML development,' Nadella told him.. ~ EdgeHTML 'I don't actually know a whole lot about why we're in consumer focused voice assistants,' Nadella told him... ~ Original Cortana vision
  • I mean if you don't have a champion that's willing to go the distance with a section or product then it won't go anywhere.
  • Yup very true
  • @Annullator or if you have a team lead that is far to focused on stats and telemetry numbers as once people get buried within the numbers all sense of vision is lost.
  • and when you don't have a visionary leader, they'd be questioning the purpose of everything instead of figuring how to piece it together by themselves. making the shareholders happy for tonight, doesn't run a business, it only smacks an axe right through the gold bag, everyone will be happy to see the gold, feel the gold, dance with it if they fancy it, heck they'd put it in their mouths but there wont be anymore after that. a proper leader , chooses their champions, this is what strategy is, Phil Spencer just happened to be in the right place at the right time to be that champion who got selected but if it was someone else who didn't give a real shyt, they'd have ditched Xbox as it were a dried lemon on donkey arse, with all due respect I've read about true genius folks with Indian heritage whom came from humble beginnings but this one ain't it, this guy is running Microsoft down to the point where its hard to decide if he's the CEO of Microsoft or the CEO of MicroF*k, slowly F*king up the legacy of everything that made Windows. What Windows is today, is simply thanks to the foundation it has been built on, if Windows 10 didn't exist at this point, this CEO would have said "lets stop selling windows by 2020 and start selling apple/google products with our apps on it" at glance this seems stable or viable but it will cut out the platform usage entirely and make the secondary product utterly rootless because when these so called other platforms decide to block Microsoft programs for whatever reason, its game over for Microsoft, for example, google chrome became what it is, because google put its app on Windows; that's an 80% of world wide PC users, what if Microsoft said that Google chrome was a security risk, as it was indeed having many issues at its beginning, just think about that as any rational person would, it can happen to any program or to any developer/corp.
  • You clearly don't understand business and talking a 100% on the basis of your sentiments.
  • Meanwhile in reality, Nadella was named Financial Times person of the year and is running a trillion dollar company with a record high stock price. You have no idea what you're talking about and even sound like a bit of a racist by bringing up his ethnicity for apparently no reason.
  • There's no reason to bring up his ethnicity.
  • All failures before Nadella even took the helm, except for Edge.
  • Nadella thinks the best business strategy is to have customers use competitors' products.
  • Correction: he thinks the best strategy is for customers to switch from using Microsoft's products to using competitor's products.
  • Uhh ok none of that makes sense
  • Yeah literally none of what they said could be derived from this article.
  • Phil had something to actually sell to him. Phil had a passion for the brand. He stood up for it and acknowledged the mistakes. He also gave him a plan. I feel like the other leaders in those failed departments didn't have a passion or plan, at least not one that seemed viable.
  • Agreed entirely, I really feel like Windows desperately lacks the kind of inspiring leadership Xbox has.
  • @Jez Corden Windows really does... it was a mistake when Microsoft let go of Terry Myerson.
  • Myerson was known to be toxic. I think Sinosfsky drive them further into the future than anyone. But he was fought against by old win32 windiv and devdiv old guard. They need a new head to drive new thinking.
  • @wolfpack219 Totally agree aswell, you can really tell Phil's passion for the brand miles away and his transparency is refreshing (certain things have to be vague due to the nature of the business - i.e. building up hype for a console reveal).
  • Agreed MS is general needs more Phil Spencer's. They are a trillion dollar company, innovative and ethical (mostly) and can do amazing things. They lack passion in other areas. They could be incredible.
  • Nadella is the guy that purchased Nokia. I don't like this guy.
  • No he's the guy that cleaned up the prior CEOs Nokia mess that was Windows Phone. I loved WP, but it was not a viable business aka not profitable
  • Ballmer bought Nokia. Nadella was famously against the idea.
  • Nobody purchased Nokia. Nokia was never sold. :P
  • Nadella didn't buy Nokia's phone business. This is a flat-out lie. Ballmer bought Nokia and ruined it, Nadella always said it was a horrible idea and Microsoft should've never done it.
  • Blame Ballmer and that rat, Elop.
  • '' Are you going to pull it off PlayStation?',' Spencer said. 'And I'm like, 'Why would I do that? People like playing it on PlayStation.''' That's why Xbox failed in this generation. Less exclusive games means no reason to buy a console. Little big planet would never come to Xbox, or other games that belong to Sony studios. Cloud is not enough if you don't have your exclusive catalog. And since Cuphead was ported to Switch with Xbox Achievements, many PlayStation users across the internet dream of Gears and Halo on PlayStation. Hopefully in the next generation they would not make the same mistakes again
  • Xbox made money, therefore it didn't fail.
  • Yes, but i need developpers for my Windows
    And nothing in entertainement with Verizon, Qualcomm … (Xbox One)
    I prefer Sounders
    This is not savage capitalism (neu)
    Many distraction in this world with many people
    Okay, but i prefer Nasa to Amazon paiement
    Politics are ridiculous
    The Ecosystem of XboxP3
  • A new Xbox studio in Japan : buy Sega (with Sammy)
  • If they were all in I think having an option for VR is crucial with the series X.
  • Such a pity that Windows 10 Mobile didn't have its own Phil Spencer...
  • Nadella should be the CEO of Walmart or Pepsi, not Microsoft.
  • Gaming is always important to an OS.
    Human only need 1 or 2 in each app category (Email, Office, Browser, Photo editing, SNS, TV/movie streaming, etc), apps come after that only earn scraps.
    Gaming? Consumers need new games.
    The more a consumer invested (time to generate progression and money to buy games) into your platform, the harder they can leave.
  • All the anti Nadella comments. And yet he has pushed Microsoft back past Amazon and about to pass Google. They are also taking control of tomorrow's computing war today. The cloud space. Phone warriors be like ' I don't compute that. I don't compute that.' Love it. It's comedy gold. Good job none of these nutters run MS.
  • Totally true if you like listening earning calls instead of using Microsoft consumer services. I didn't become a Microsoft fan to read about thier earnings.
  • Nadella could kill all this consumer stuff and go all in on cloud. I bet Panos had to sell Satya on the surface phone, duo, as well. It would not surprise me if Satya was anti surface as well. Realize the surface brand isn't meant to be the best price/performance. It's meant to spur on the other oems like hp and dell. He could have said since we dont move as much hardware as dell/hp, why are we even in the space? The stuff I care about the most seems safe for now, including the onprem stuff like Windows Server 2019, HyperV, etc.
  • We know why XboxP3 not buy Discord for Xbox and Mixer ?
  • Why not a Social Network as Yammer for Xbox, XboxP3 ?