As Microsoft CEO Satya Nadella's pay hits an astronomical new milestone, here's everything he said to shareholders today on AI, Xbox gaming, and Mi...

fatpunkslim

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In a sign of the times, Microsoft CEO Satya Nadella snubbed Windows and Surface in his annual address to shareholders, dominated by commentary on AI and the security issues that plagued Microsoft at the start of 2024.

As Microsoft CEO Satya Nadella's pay hits an astronomical new milestone, here's everything he said to shareholders today on AI, Xbox gaming, and Mi... : Read more
I see that you don't really like this Nadella, me either because he lacks style in his communication
. But it is mainly aimed at partners. And inevitably he tends to oversimplify the strategy, without going into detail. At the same time, when we see the small size of the paragraph concerning gaming, it is difficult to develop.

That's basically the strategy in broad terms, you shouldn't extrapolate everything he says either!

When he says:
"Finally, we brought four of our fan-favorite titles to Nintendo Switch and Sony PlayStation for the first time, as we continue to extend our content to new platforms." he repeats almost word for word what he said at the time of the release almost a year ago of the 4 first party games on other platforms.

But when it comes to going into detail it's not so simple, Phil Spencer and Sarah Bond made it clear that this was not a sign that everything was going to be released on other platforms. Besides, there are 4 old service games, for 5 and 8 years old, and 2 small games (pentiment and hifi rush), not enough to make a fuss about.

And as proof, all the games that were released subsequently were either exclusive or were already historically multiplatform. Indy is a special case because it is a Disney license.

What's funny is that we've never had so many exclusive games on Xbox. Even recently during the Xbox partner preview: 4 Xbox exclusives (xbox console and PC): Blindfire, Subnautica 2, Mistfall Hunter, The Legend of Baboo. And 5 games day one on gamepass: Wuchang, Subnautica 2, Eternal Strands, Wheel World, FBC: Firebreak. And I'm not talking about stalker 2 or ark 2, dungeons of hinterberg, and others. In fact if you count correctly, some games are less well known but there are more exclusive games on Xbox than on PS5, it's a fact!

Why continue to sign exclusive game contracts with third-party publishers if exclusives are not important to the Xbox ecosystem ?

That's what I'm saying, Nadella draws the broad outlines, but the devil is in the details, Xbox strategy is much more subtle than that and not as crude. Phil Spencer and Sarah Bond are responsible for the subtleties.

The Xbox strategy has always been based on the long term, this was repeated by Phil Spencer many times, and they know very well that it is important to keep large exclusive licenses on Xbox to keep the ecosystem attractive. .

We should not have the presumption to believe that we know better than a company valued at several billions.

Those who say that Xbox's strategy is to send all their games to other platforms have understood nothing. It's a short-termist logic to think that, what would be good in the short term, will not be good in the long term, but I'm knocking open doors by saying that.

Xbox will never go in this direction, not for fear of disappointing fans, but simply because it's not good for business in the long run. I've been noticing this for a year, and it's been verified, the number of exclusive games on Xbox has only increased, it's easily verifiable. And I'm willing to bet that this will continue to be the case because I'm not basing this on rumors or beliefs, but simply on the facts. That doesn't mean that we won't see some games on other platforms from time to time, but nothing major. Just with the historically multiplatform games, there is plenty to do.

In fact, there has been more fake news than reality since then. Fake news about halo, gears, starfield, forza, etc. on other platforms never happened.

And there, you can be sure that we will be treated to even more false rumors. The media system is like this!
And you will notice that this is often when there are big announcements on the Xbox side. I don't want to be a conspiracy theorist, but these coincidences are quite astonishing, from saying that certain influencers or launchers of fake news are paid by the competition, there is only one step! But no need to go that far!

This is the big gap between the treatment of certain clickbait media (which want to please the trolls) and the reality of the facts.

This media deviance is used by the launchers of fake news. They enjoy it when they see that their inventions are making the rounds on the web. And many media are too naive or also take advantage of the system, to relay information that they know is false. But as long as it clicks, we don't care about the facts! A good false rumor is worth more than the facts.

I think you're lacking a bit of perspective @Jez Corden regarding all of this.
 
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fjtorres5591

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Xbox strategy has always been based on the long term...

It has to be.

The entire game Industry comes with a large built-in lag. It is capital hungry: you pump in money for years with no guarantee of any return. Particularly in the high risk, high reward top of the market. Look at CONCORD, a short term kneejerk reaction to the success of OVERWATCH that by the time it was close to production-ready (it wasn't there at launch) it was dated and launching into a flooded market.

It is unforgiving: one misread can set you back a decade or, worse, kill you. XBOX360 owed a lot of its success to its media features (renting movies, streaming Netflix and Hulu, external content via USB) and it got a lot of gaming media attention for Kinect. Short term thinking was to do more of the same. Lost in the analysis was that the 360 success, especially early, was for being significantly cheaper than the gold-plated launch PS3. Sony remembered that and undercut the XBOX price. They're still trying to recover.

It takes three years to design a console and get it production ready and another year to ramp up production for even a limited launch. Even now, the basics of SWITCH2 hardware (CPU/GPU/AI) have been quietly known for years. Before PS5 was even announced it was already a given its GPU would be underpowered and the only tweak Sony could do was to add a software-based boost mode to minimize the disparity on paper and rely on third party developers targeting PS5 as the lead platform and ignoring the more sophisticated features of the XBOX.

There is simply too much inertia in the business to be bold. Those extra features XBOX has? Not even its own developers do much with them because they also target PCs and most of that installed base also lacks those features.

Worse of all, gaming is a "disposable income" business and it relies on a healthy economy to find a big enough audience for its products. A recession here, a pandemic there, a global war or energy shock and the market for your new generation shrinks, forcing you to rely on cross-gen product and again neutering the best new features of your shiny toy.

Which is where Nadella and Spencer's bets come in: subscriptions are steady, predictable income. The per unit game income is lower on GAMEPASS but even a sunk cost dud like REDFALL has value on GAMEPASS, enough to belatedly fix its biggest flaws and let its long tail return some value. Old games from as far back as 2000 (and earlier, on PC) are new to those that never played them. In the old launch sales driven model the game isn't "shelved" even at online retailers and brings in zero revenues but on GAMEPASS it still lives and brings incremental revenues. And then, you add in cloud gaming and make the gaming hardware itself an optional, premium product.

But launching a new business model takes time. And for content subscriptions, it takes a steady stream of new content atop a large predictable back catalog. For video subscriptions, it means AMAZON buying MGM and Disney buying FOX, Netflix putting up multiple new movies and entire *series* weekly. APPLE didn't and despite high profile releases, its video service gets few long term subscriptions on its own. For GAMEPASS, that means MS buying Obsidian, InXile, BETHESDA, and yes, ABK. it means platform exclusives, both first and third party. But above all, it takes patience and willingness to stick to the plan.

These last two are not typical traits publicly owned corporations can usually afford. But Nadella's track record at turning MS into a 3 Trillion dollar property has earned him the credibility and time to execute an industry changing model just in time for the changing market of the next decade.

Because like it or not, the next decade will only get worse from here on out. And $200B a year of continued game sales are no sure thing. A whole separate story.

But make no mistake, the current team and studio closures are just the beginning.
And MS knows it and are prepared for it.
The time is coming when $500 consoles and $1000 gaming PCs will be unaffordable but $50 FIRE TV Sticks will be.

Trust Nadella's vision. His stock holder do.
(with a bit of sweet talking.)
 
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fjtorres5591

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BTW, GAMERANT (hardly an XBOX friendly site) is reporting that MS is cutting back on PlayStation ports and set a redline of franchises that will never go there. Starting with HALO and GEARS but not ending there.

It may be that the added revenue isn't worth the effort or it might be in retaliation for the blocking of third-party releases.

Story is developing; expect lots of clickbait pieces all weekend.
 
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Jez Corden

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BTW, GAMERANT (hardly an XBOX friendly site) is reporting that MS is cutting back on PlayStation ports and set a redline of franchises that will never go there. Starting with HALO and GEARS but not ending there.

It may be that the added revenue isn't worth the effort or it might be in retaliation for the blocking of third-party releases.

Story is developing; expect lots of clickbait pieces all weekend.
tbf i don't think that report about xbox "cutting back" on playstation ports is even vaguely true. they've had a plan in place for latitude since last year and they've not changed course.

and tbf like I said in the closing, I know satya is a savvy businessman loll. i just wish they would do more for customers in the ecosystem today, and not just recklessly abandon the users they have. the fact surface duo only had one real update is absolutely criminal. shows serious contempt for customers. that kinda attitude won't filter down well to xbox.
 

fatpunkslim

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tbf i don't think that report about xbox "cutting back" on playstation ports is even vaguely true. they've had a plan in place for latitude since last year and they've not changed course.

and tbf like I said in the closing, I know satya is a savvy businessman loll. i just wish they would do more for customers in the ecosystem today, and not just recklessly abandon the users they have. the fact surface duo only had one real update is absolutely criminal. shows serious contempt for customers. that kinda attitude won't filter down well to xbox.

Why are you mixing everything up, we're talking about xbox and gaming, hasn't the xbox console received lots of updates? Don't the facts show you that your fears are unjustified? And why don't you believe what gamerant says about the red line. Are you willing to believe other rumors but not these? In any case the facts show, until proven otherwise, that there is indeed a red line !

PS: you didn't respond to my message :(
 

fatpunkslim

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@Jez Corden i 've a gift for you:
Microsoft annual report 2024
first seen on tweaktown

Microsoft says that exclusive games and content are still important for the Xbox brand and is one of the main metrics used to determine gaming growth.

I quote this annual report
"Xbox enables people to connect and share online gaming experiences that are accessible on Xbox consoles, Windows-enabled devices, and other devices. Xbox is designed to benefit users by providing access to a network of certified applications and services and to benefit our developer and partner ecosystems by providing access to a large customer base.

"Xbox revenue is mainly affected by subscriptions and sales of first- and third-party content, as well as advertising.

"Growth of our Gaming business is determined by the overall active user base through Xbox enabled content, availability of games, providing exclusive game content that gamers seek, the computational power and reliability of the devices used to access our content and services, and the ability to create new experiences."

Read more: https://www.tweaktown.com/news/1013...used-to-determine-growth-in-gaming/index.html
there is clearly a difference between Nadella's mega-simplified speech and the facts in practice.

thank you for your next tweet on this subject!
 
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fjtorres5591

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@Jez Corden i 've a gift for you:
Microsoft annual report 2024
first seen on tweaktown

Microsoft says that exclusive games and content are still important for the Xbox brand and is one of the main metrics used to determine gaming growth.

I quote this annual report

there is clearly a difference between Nadella's mega-simplified speech and the facts in practice.

thank you for your next tweet on this subject!
There is also his testimony in the FTC trial:

"If it was up to me, I would love to get rid of the entire sort of exclusives on consoles, but that's not up to me to define," Nadella said. "Especially as a low share player in the console market that the dominant player there has defined market competition using exclusives, and so that's that's the world we live in... I have no love for that world."

The console gaming war of exclusives and paying developers not to support XBOX is Sony's strategy because it is quicker and cheaper to block XBOX support than developing more games inhouse.

For some reason, the FUD merchants in the gaming media see that as fine and prefer that MS unilaterally "disarm" and give up their best tools to effectively compete against the dated short term thinking Sony relies on.

I have no doubt that some of the staff of the studios that MS has would prefer that XBOX vanish and simplify their work lives. Not going to happen.

Franchises that are traditionally XBOX signature exclusives it is extremely unlikely to see them on playstation as long as Sony seeks to starve XBOX of third party support. It might happen but first Sony needs to earn that support by ending their anti-competitive practices. I do not see that happening any time soon.

There might appear to be an opportunity to suck some money off the PlayStation customer base by going multipart on the signature exclusives but that is short term thinking, sacrificing long term strategic tools for the illusion of next quarter profits. Kotick would do it but Nadella and Spencer don't work that way. Their game is stable long term revenue not trying for a quick buck before sony gets their game pipeline refilled. Which is already going on via third party exclusives.

It is a fool's game trying to compete fairly against an anticompetive operation.
Nadella has never been a fool before. i doubt he'll start now.
 

fjtorres5591

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Bit over the top negative. I just don't see how people go make a profit off of AI. A lot of hype and that's about it.
You sure this is the right thread?
In the right thread you might get a hundreds agreements.
Somebody 'round here is waayyy too invested in yelling at the wind.

BTW, there's two ways people make money off "AI": one, legit, is by helping companies create LLM/SLM software to mine/manage their inhouse big data hoards. That is real, profitable for both sides, and never going away.

The second, is by promoting hype, and debunking it vigorously with clickbaity headlines.
 
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