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Xbox Phil Spencer: Xbox Not Done with Buying Studios

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Haziqonfire

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Phil Spencer took part in a discussion at the Wall Street Journal’s WSJ Tech Live event and was asked if Microsoft was finished with acquiring more studios. He re-iterated that they’re not finished yet with acquisitions and we’re likely to see more in the future.

“I’m really proud of some of the creators that have chosen to become part of Xbox,” Spencer replied. “So many of these creators, they have choice.

“If you look at some of the people we’ve acquired and partnered with, it’s people we’ve had long-term relationships with, and they’ve come inside of Xbox now and they see our roadmap on platform and service, and I want them to be able to do their most amazing creative work as part of this team.

“We offer some financial stability for them. It’s not about only the success of their next game. I want to give them some more creative capability, longer timelines when required to do their best work. And that’s my goal, we’re big believers in the power of content. You’ve heard Satya Nadella talk about it, [heard] Amy Hood talk about it.

“So we’re always out there looking for people who we think would be a good match and teams that would be a good match with our strategy. So we’re definitely not done.

“There’s no quota. There’s no kind of timeline where I have to go acquire studios by a certain time, but if we find a studio where we have a good fit, we share what we’re trying to go do and what they’re trying to go do, and if we feel we can both get better together, absolutely.

“It’s one of the privileges we have of being at Microsoft and having the capability to take a long-term approach, and adding amazing creators to the portfolios is an important part of that.”
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There’s more at the link here.

How do people feel about these acquisitions, from not only Microsoft but Sony as well? I’m not opposed to Microsoft, Sony or Nintendo acquiring smaller studios if it means they have more financial and creative freedom to make what they want (i.e. Ninja Theory, Housemarque etc). However, I have a bigger problem when a larger set of IP is blocked off to one platform, whether it be through a large scale acquisition like Bethesda or timed exclusivity deals like with Final Fantasy VII Remake/Final Fantasy XVI.
 
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My feeling is that platform holders should a. learn to share instead of leaning further into the exclusivity race and b. remember that services are also very valuable as a selling point, including "free" features like Smart Delivery -- even more so when consoles are as similar as PS5 and Series but certainly also for Switch. With all platforms having great games to play, services will be an important differentiator.
 
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How I feel about these aquisitions?
I don't want them. I don't want companies with pockets so deep that they could buy half of the planet to just
buy their way into success, more and more into a monopoly by just draining the competition. We see how this
is going in the movie business.
 
Dark Cloud said:
That doesn’t mean anything isn’t happening behind the scenes.
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I agree. I expect they are currently eyeing up Crystal Dynamics (they are now contracted to codevelop Perfrct Dark), Avalanche (they’re making that Xbox exclusive Contraband game) and IOI (who are allegedly working on an Xbox exclusive).
 
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Phil welcomes Idea Factory to the Xbox family to firmly corner the kusoge market
 
The Xbox lineup of exclusives is going to be something to behold in five years time that's for sure. And it's working on my account. Definitely interested in picking up a series X along the line now whereas I was able to forgo the Xbox One handily
 
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Selfishly speaking, MS acquisitions means funding for games that'll end up on Gamepass, which I guess is good for me.

But in a wider industry sense, I'm not convinced this rush to accumulate studios under platform holders, and the resulting increase in exclusives, is good in the long-term.
 
I'm not generally opposed to acquisitions per se but it depends on the volume, reach, and impact. There's a pretty big difference between buying a whole ass publisher like Bethesda and someone like Double Fine.
 
Dardan Sandiego said:
I'm not generally opposed to acquisitions per se but it depends on the volume, reach, and impact. There's a pretty big difference between buying a whole ass publisher like Bethesda and someone like Double Fine.
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There really isn't a privately owned console publisher the size of Zenimax left. Many mid-sized privately owned publishers are being bought out by holding companies like the Embracer Group.
 
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I do feel like this rush to buy up studios is getting out of hand.

On the one hand, with the nature of the games industry being what it is, I can understand independent studios wanting to get rid of the risk of financial loss by passing it onto a bigger corporate entity.

But on the flipside, when you have the financial stake of so many studios resting on just a few platform holders, that means if anything happens to one of those platform holders (They incur losses, have to bow out of the hardware race, etc) then every studio they own runs the risk of being shut down. Sony and Microsoft are both doing great now, but say next generation one or both of them cock things up and start incurring massive losses - How many studios would be at risk of being shut down, and what impact would that have on the industry?

I generally think the better option is for studios to cultivate closer relationships with platform owners, a la Nintendo and Mercury Steam, while still maintaining independence. That way, if a platform holder ever does another Wii U, those studios are free to either keep that close relationship and get paid to make games, or to start looking at other platforms that could offer better sales.
 
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I am happy when Microsoft buys studios because it gives financial freedom for that studio to pursue their creative vision. Being a 1st party studio is preferable to being a multi-platform developer - in my opinion. SEGA was way more creative when they were a collection of 1st party development studios.

I feel like the people that complain just want to have all their games on one platform and that is a pipe dream. Save your pennies and buy all the systems if you want access to all the games otherwise just learn to live without.

Microsoft should just buy SEGA so we can have SEGA, Sony, and Nintendo as platform holders again. Microsoft is the new SEGA with an eclectic list of creative studios.
 
Still can't believe im considering switching sides from ps (the ps5 will be final one probably and ill switch to steamdeck or pc and otherwise ill stick to just xbox + nintendo) to xbox and i grew up with sony. But that aside yeah xbox/microsoft is fixing that first party problem they had pretty well. Espcially when the project flow starts going.

With the money alone i save on gamepass i can afford the steamdeck hehe its crazy!
 
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It doesn't affect me, I have all three consoles and play on PC, but I'm not a huge fan of any platform holder buying studios (as opposed to building their own). But, it is a necessity to keep some going and they do end up getting better budgets to make good games.
 
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Dardan Sandiego said:
I'm not generally opposed to acquisitions per se but it depends on the volume, reach, and impact. There's a pretty big difference between buying a whole ass publisher like Bethesda and someone like Double Fine.
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This is where I am too. I don’t have problems with Sony/Microsoft acquiring studios that would benefit from the support — but it does sting having big IP blocked off to one ecosystem that were previously enjoyed on multiple platforms.

In the same way, it’s quite annoying seeing timed exclusivity deals from Sony blocking off games from other platforms.
 
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for me personally, i find moneyhats and timed/content exclusivity deals more annoying than acquisitions. with acquisitions, you're taking on the responsibility of fully funding and producing the games and paying people's salaries, not to mention a lot of times these studios get much bigger budgets and support and can work on way bigger projects than they used to, while not having to worry about finding a publisher. of course it does suck when a multiplat developer becomes first party, but the devs are never forced to be acquired and if they think it's the best move for them, i don't think there's much to be mad about.
 
I think I am in the minority when I find Phil Spencer (and a lot of the Xbox top management team) incredibly irritating at times. I am not anti-Microsoft or anti-Sony, I want all the console platforms to have success, the more fantastic games out there the better for all gamers. It's just that he continually talks strategy, giving sound bites, hyping ambitions and how all these great games are coming, etc. It's all just PR spin. And I know that is a large part of his role, to do that, but I infinitely prefer Nintendo's "when it's ready we'll show the damned thing, and tell you about it!" attitude.
 
jamesRainbowBoy said:
I think I am in the minority when I find Phil Spencer (and a lot of the Xbox top management team) incredibly irritating at times. I am not anti-Microsoft or anti-Sony, I want all the console platforms to have success, the more fantastic games out there the better for all gamers. It's just that he continually talks strategy, giving sound bites, hyping ambitions and how all these great games are coming, etc. It's all just PR spin. And I know that is a large part of his role, to do that, but I infinitely prefer Nintendo's "when it's ready we'll show the damned thing, and tell you about it!" attitude.
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No executive from any of these companies are anyone’s friends — Jim Ryan talks very much like a corporate executive, so a lot of people on gaming forums get quite upset by the way he talks about things. Phil Spencer comes across as a “genuine guy” and Microsoft has benefited from playing up the “good guys” role for their “consumer friendly” approach to things, but it’s just PR. At the end of the day Microsoft still wants your time but more importantly your money.
 
LuminaryGhost said:
No executive from any of these companies are anyone’s friends — Jim Ryan talks very much like a corporate executive, so a lot of people on gaming forums get quite upset by the way he talks about things. Phil Spencer comes across as a “genuine guy” and Microsoft has benefited from playing up the “good guys” role for their “consumer friendly” approach to things, but it’s just PR. At the end of the day Microsoft still wants your time but more importantly your money.
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I know, and perhaps that's why I like the way Nintendo does it. They don't even pretend haha
 
A subscription-based business model (GamePass) needs exclusive content to make it sustainable. Streaming services like Netflix, HBO Max, Amazon Prime, and Disney Plus all have exclusive TV shows and movies.

All of these Microsoft acquisitions aren't really about the hardware business. It's all about creating value for GamePass. Even Phil Spencer has openly admitted it during interviews.
 
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More industry parity is a good thing.

As of now, Sony has a substantial competitive advantage over Microsoft due to their expansive and high quality exclusives portfolio. While Microsoft has been making significant strides to close that gap through compelling hardware and Game Pass, at the end of the day, consumers care most about the games and Microsoft fails to make a compelling case to go with their platform when you can get most of their best titles on PlayStation. Microsoft needs a stronger exclusive portfolio to take that next step and become more competitive. I think the Bethesda acquisition was a positive for this reason.

Of course, this is just the landscape today. In the future, the Bethesda acquisition alone could close the exclusives gap and Microsoft will be able to stand on equal footing with Sony without additional acquisitions. Or Sony could make multiple poor decisions and lose their competitive edge. It's hard to predict long term, so ultimately I'm apprehensive towards the prospect of more acquisitions.
 
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Dark Cloud said:
Nintendo needs to buy more studios. Since so many people are on board with Microsoft doing it, I’d like to see Sony and especially Nintendo do it more.
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At first I thought sure, Nintendo should buy Mercury Steam after the success of Dread, but then when all the negative stuff came out about them I was like - well, good thing they haven't!
 
It makes sense. I do worry about who they'll buy but I'm not exactly clutching my pearls over it haha.
Dark Cloud said:
Nintendo needs to buy more studios. Since so many people are on board with Microsoft doing it, I’d like to see Sony and especially Nintendo do it more.
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Nintendo is so grating with how unwilling they are to buy studios. I'm glad they consolidated their control over Next Level Games, but c'mon. Go scoop up a company. They got all of this money, invest it.
randomengine said:
At first I thought sure, Nintendo should buy Mercury Steam after the success of Dread, but then when all the negative stuff came out about them I was like - well, good thing they haven't!
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They could buy them and change how they do things. Seems pretty obvious to me tbh.
 
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My gut feeling is that I'm less bothered by acquisitions when it's a company that's already best known for its exclusives anyway, i.e. Insomniac with Ratchet & Clank or Spider-Man, Next Level Games with Luigi's Mansion, etc. But when said acquisition deprives customers of many games that would've otherwise been multiplatform, like Microsoft buying Bethesda, that's when it gets a bit skeevy to me. It's like if Sony bought Square Enix - terrible. But apparently Bethesda was looking for a buyer, in which case I'd much rather it be Microsoft than Sony or Amazon or Google or whoever else. And it does make Xbox more competitive, which is very good, so from that perspective it could be one of those cases where a buyout has positive effects, like T-Mobile taking over Sprint.
 
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I think it's great.

Firstly because I have a subscription to gamepass so this increases value. Secondly because, as was already mentioned before, first parties generally have more creative freedom. Especially smaller studios go bankrupt quickly and need to make a quick turnaround buck before fizzling out. Being first party keeps them sustainable, and in addition companies that can't compete on production values need to compete on interesting hooks, doubly so because the platform holder is interested in expanding its genre portfolio. So you generally get more focused and creative games, that don't focus on exploitative monetization, than when they would be independent. Thirdly, I quite dig that after three generations of being a playstation light, xbox is finally carving out a niche for itself. While most of it is still splitting up the market like before, the kind of games Sony is focusing on (blockbusters) is different from Xbox (more quirky AA) is different from Nintendo (gameplay/family oriented). And with differentiation I expect there to be more divergent specialization over time. It gives the audience something to choose.

Obviously it sucks for the people who can't afford multiple consoles, but still. I have a reason to own all three now.
 
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I'm fine with this as most of MS's acquisitions have made sense. Either devs that have previously worked with them, or devs in need of financial security, most of the time. Bethesda was searching for a buyer, and if it wasn't MS, it would've been someone else. A lot of content is needed to have GamePass be sustainable and continually bring in new subs. Just as long as they don't go for a huge publisher, though.

I much prefer acquisitions over timed exclusivity deals.

As for a monopoly, I don't even understand how that can be possible in this space, with so many developers being out there, and new ones forming all the time. An example of a monopoly would be Sony acquiring Crunchyroll (which I think they already did?), not this.
 
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Not really a fan, no.

But, I get why it is happening. I'ver said it years ago, but as development costs rise you can see dev houses being more dependant of huge hits to get their investments back. So studio acquisitions was inevitable. Bethesda's sale was a huge blow for people enjoying their stuff on PlayStation, on the other hand I get why Microsoft did it. They need more recognisable and high quality IP. With just Halo, Forza Motorsport and a few others you're not going to make it.

Still I hope it will just be studios where you think "oh thats not a bad deal afterall". Like Sony buying Imsomniac, or Nintendo closing the deal with Next Level Games.
 
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Honestly I prefer MS than Sony acquiring publishers and devs mostly because Sony would lock out PC ports, but fuck, how boring is this talk. I'm happy Nintendo ignore all that baggage, and even if people speculate about certain devs, like myself with MercurySteam, we know it's unlikely Nintendo do something like that.
 
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I don't really care about acquisitions for the most part, but the purchase of Bethesda legitimately pissed me off and I'm still rather frustrated by it. Losing BGS, id, Tango, Machine Games, and Arkane stings really hard for someone who doesn't really have any desire to own more than two platforms per generation. I was perfectly fine going into this console cycle with a Nintendo and PlayStation console, but now there's a good chance I'm going to have to purchase an Xbox at some point. I'm not happy about that. I don't need more electronics under my television. Losing out on access to games from five studios I love is not something I expected. The Bethesda acquisition does not benefit me in any way. I'd have much rather seen MS enter into a strategic partnership with Zenimax, where all Bethesda software came to Game Pass on day one and stayed there permanently, but the titles also came to PlayStation as full priced releases (and Switch as well when applicable). But the deed is done. Maybe I'll purchase an Xbox someday or maybe I'll just never play any future Bethesda titles beyond Ghostwire Tokyo.
 
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Consolidation is an inevitability for the industry. Between Microsoft and, say, Facebook, Google, Netflix, Amazon, etc. I’d much rather have a proven entity that has been in this space for decades and continues to use to show they’re here for the long haul to make these acquisitions.
 
Rowsdower said:
Consolidation is an inevitability for the industry. Between Microsoft and, say, Facebook, Google, Netflix, Amazon, etc. I’d much rather have a proven entity that has been in this space for decades and continues to use to show they’re here for the long haul to make these acquisitions.
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This is where I am at as well. Like, I get that the Bethseda news sucked for some people but it is alot better than hearing "Amazon agrees to buy Zenimax for $8 billion).
 
Josh5890 said:
This is where I am at as well. Like, I get that the Bethseda news sucked for some people but it is alot better than hearing "Amazon agrees to buy Zenimax for $8 billion).
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Exactly. Knowing that Zenimax was wanting to sell seals that deal. I trust Microsoft’s handling of them long term far more than Google.
 
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