General Gaming Phil Spencer's (leaked) March 2020 email about "AAA publishers" and their "failure to adapt" to the new digital reality is definitely worth reading

[Commissar SFLUFAN]

Amid all of the various documents accidentally leaked to the public last week from Microsoft's FTC case, one that was overlooked but is potentially the most interesting to read was an email that Phil wrote in March 2020 in an exchange with the Xbox team planning ahead of a feedback meeting with Take-Two.

 

This is the text  of the email:

 

 

 

Kotaku's analysis of the email

 

Leaked Xbox Boss Email Perfectly Explains Why Game Publishers Are Eating Themselves Alive

KOTAKU.COM

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Head of Xbox Phil Spencer pitches Game Pass as an alternative to relying on big budget blockbusters

 

Quote

 

It’s a brutal assessment but a fair one. Sequels, remakes, and spin-offs dominate at the big publishers. Companies from Sony to Ubisoft are slashing more off-beat projects and development teams to focus almost exclusively on games that have a chance of selling over 10 million copies. Meanwhile, the development schedules are getting longer and budgets are ballooning, making it increasingly harder for even the biggest publishers to absorb even a disappointing release, let alone a disastrous one. If none of that sounds sustainable it’s because it’s not.

 

Microsoft’s answer to this is Game Pass, not out of the goodness of its heart but because it sees a new platform it can scale to feed the financial growth demanded by investors. “Our goal is to find a way to both grow our subscription (which is our new platform) and help the AAA publishers build towards a successful future,” Spencer writes. “For publishers with 2-3 scale franchises that’s a difficult transition. Again, taking a clue from Hollywood, it’s not clear how a standalone subscale media publisher grows is this world without adapting to new paradigms or getting consolidated but we believe we can help a Take2 by increasing monetizable [total addressable market] across more endpoints inside of a global platform like Xbox Game Pass (inclusive of xCloud).”

 

The suggestion here is that the type of game that can thrive on a subscription service is either a small one that benefits from better curation and visibility or a live-service one that can make up revenue on the backend by charging all the new players microtransactions (the new store shelves are inside the games themselves). That’s also a pretty grim assessment, and probably part of the reason Sony has repeatedly said that bringing its big first-party exclusive games like Spider-Man 2 and The Last of Us to its competing PS Plus service day-and-date would cripple the economics of blockbuster production.

 

 

[Kal-El814]

I thought it was interesting that he made an Egghead Software reference in 2020.