Xbox is flailing again. Major studio closures loom, the AI boom continues to erode the affordability of console hardware components, no one seems to want those consoles anyway and, according to Microsoft CEO Satya Nadella—a fierce advocate of the AI industry crippling the rest of consumer tech—the corp isn’t making enough money from its first-party games.
All this, despite Microsoft having a market value of over $2 trillion, and owning some of the biggest games studios and IPs in the world, including Call of Duty and Minecraft.
What’s going on? Everyone has an opinion, some more authoritative than others. Among those opining include Shawn Layden, a high profile former Sony executive who helped usher in the PlayStation 5 before his resignation in 2019. Overall, he spent 32 years with Sony.
Sony’s PlayStation, of course, has troubles of its own, but Layden bowed out long before the worst of them manifested. He’s criticized the industry’s pivot to live service—which has proven a terrible tactical shift for Sony—and the continued reliance that major publishers and platform holders have on blockbusters. He also thinks industry consolidation is “the enemy of diversity”, and that subscription services stifle creativity.
In other words: the beliefs he espouses would seem to put Microsoft firmly on his shit list.
In a LinkedIn post, game design consultant Tadhg Kelly reiterates some of the blunders, strategic shifts and curious tacks taken by Xbox since Asha Sharma took the reins in February. “The Xbox identity crisis will continue until morale improves,” he writes. “We’ve had:
- A new CEO after previous leadership was beheaded
- A rebrand that was kinda just the old brand
- A reaffirmation of expensive Helix
- A claim that hardware can’t be expensive to win
- A claim that 30% margin is done
- A claim that 3% margin is trouble
- Matthew Ball and some new tech-industry hires
- A claim about refocusing on core franchises
- A showcase of new games
- A killing of studios making those new games
- A claim that gaming is important to Microsoft
- A comment that gaming at Microsoft needs to stand alone
“And on and on and on,” Kelly adds. “Strategy isn’t a collection of contradictory decisions that might matter. That’s just tactics. Bob and weave. Let’s just get through this. Sad times for Big Green.”
Layden sounded off in the comments. “At the risk of sounding like a ‘hater’ (which, I’m really not), the moves evince a basic misunderstanding of how the interactive entertainment world moves.”
He added: “Iykyk [If you know you know], which also means if you don’t you don’t.”
Those are strong words. It’d be like a carpenter evincing “a basic misunderstanding” of how a lathe works, 25 years after their apprenticeship.
Reading this comment I can’t help but remember the words of former Activision boss Bobby Kotick, who said in an interview last year that he once told Satya Nadella that he shouldn’t be in gaming at all. “We [Kotick and Nadella] had half an hour together and he said: ‘what can you tell me about gaming’? And I was like, dude, you shouldn’t be in gaming. You’re not a creative company. You should buy Workday or something, SAP. This is not a creative DNA company.”
Kotick continued: “When he called to do the deal I said the same thing to him. You need us, because you’re not going to figure out gaming with what you have. But is this really the priority?”
One thing’s for sure: if Microsoft is, as Nadella claims, “not monetizing” its entertainment despite its clear advantages in terms of wealth and IP ownership, then it can hardly be labeled a smart or even halfway capable business. Certainly not one well-equipped to handle an existentially consequential technology like AI is proving to be.
Either that or, as a diabolically wealthy, publicly traded corp who makes the majority of its money from cloud services, it isn’t fit to work in the creative industries.
