0:00

This message comes from rinse. These

0:02

days you can do a lot

0:04

from your phone. Book a vacation,

0:06

buy in trade stocks, but you

0:08

can also make your dirty laundry

0:10

disappear. And then reappear, wash and

0:12

fold it with rinse. Schedule a

0:14

pickup with the rinse app and

0:16

before you know it, your clothes

0:18

are back folded and ready to

0:20

wear. They even do dry cleaning.

0:22

Sign up now and get $20

0:24

off your first order at rinse.com.

0:26

That's r-i-i-n-s-e.com. Whatever you

0:28

look for in a getaway, you can

0:31

find it at Virginia Beach. When you're

0:33

there, you'll be able to enjoy some

0:35

of the best cultural attractions, activities, and

0:37

culinary experiences the world has to offer.

0:40

You could take a stroll on the

0:42

world's longest pleasure beach that travels for

0:44

miles and miles. Or you could take

0:47

part in their annual festivals, concerts, and

0:49

waterfront dining. And if you're in the

0:51

mood for dinner, make sure to check

0:54

out their fresh local seafood with farm-to-table

0:56

ingredients ingredients. It's a trip that everyone

0:58

in the family will remember for a

1:00

lifetime. Go to visit Virginia

1:03

beach.com to learn more. You

1:05

think you know what working

1:07

on your wellness sounds like?

1:09

But there's one thing that

1:11

truly sounds like the best

1:13

thing you can do for

1:15

your overall wellness. Every

1:18

great performance starts with a

1:20

great night's sleep. And every

1:23

great night's sleep starts with

1:25

Natrol, their number one drug-free

1:27

sleep-aid brand in America. 100%

1:30

drug-free and non-habit forming. Get

1:32

yours now, at Target, or

1:34

wherever you shop. These statements

1:36

have not been evaluated by

1:39

the Food and Drug Administration.

1:41

This product does not intend to

1:43

diagnose, treat, cure, or prevent

1:46

any disease. I'm David Pierce, the editor-at-large

1:48

at The Virgin. Neelai is off this

1:50

week for a much-deserved break from what

1:52

honestly I can only describe as a

1:54

deeply bleak news cycle. So I'm filling

1:57

in for him, and the Dakota team

1:59

thought that This would be a

2:01

good opportunity to switch gears a

2:03

little bit. Get away from the

2:05

political apocalypse beat for a minute

2:07

and talk about something completely different.

2:10

So today we're diving into the

2:12

video game industry, and we're talking

2:14

about a particular set of very

2:16

thorny problems facing Microsoft and particularly

2:18

its Xbox division. Microsoft is celebrating

2:21

its 50th anniversary this year, and

2:23

for nearly half of that history,

2:25

Xbox has been a central pillar

2:27

of the company's consumer hardware and

2:29

software businesses. The first Xbox launched

2:32

all the way back in 2001

2:34

and has sat next to Sony's

2:36

PlayStation and whatever Nintendo is making

2:38

at any given time, as really

2:40

the big three of gaming for

2:42

basically the last quarter century. But

2:44

things in Xbox Land have not

2:47

been great lately. In fact, Xbox

2:49

has been struggling for quite some

2:51

time now, and a lot of

2:53

the issues it's facing can be

2:55

traced back to core problems I

2:58

think at the heart of software

3:00

distribution in general. As video games

3:02

get more expensive to make, and

3:04

the demands for the size and

3:06

scope and quality of those games

3:09

become ever greater, how do you

3:11

produce certifiable, reliable hits that get

3:13

people to buy your hardware? How

3:15

do you finance those hits? And

3:17

then when they launch, how do

3:19

you get those hits into the

3:21

hands of more customers? Customers who

3:24

may not want to buy an

3:26

Xbox anymore, and frankly, balk at

3:28

the idea of shelling out $70

3:30

for a new game altogether. Nintendo

3:32

and Sony have figured this out,

3:34

mostly for reasons like Zelda and

3:36

Mario and Fortnite. And those companies

3:38

have been reaping the benefits of

3:40

dominating the console market in different

3:43

ways, but really since 2017, they've

3:45

been the winners. That's when the

3:47

first switch launched and when it

3:49

became clear that Sony's PS4 had

3:51

dominated the Xbox and had cemented

3:53

PlayStation as the clear winner of

3:55

the 2010s. But 2017 is also

3:57

when Microsoft launched Xbox Xbox game.

4:00

Pass, a subscription service that was designed to

4:02

be a little bit like Netflix for

4:04

gaming. Phil Spencer, who's the head of

4:06

Xbox at Microsoft, developed this sort

4:08

of master plan to shift

4:10

the Xbox business model entirely. After

4:12

the better part of 20

4:14

years, having proprietary hardware at the

4:16

center of the strategy, Microsoft

4:18

pivoted. The idea was that it

4:20

would lean on its expertise

4:22

in cloud computing and this huge

4:24

war chest of software profits

4:26

from Windows to try something totally

4:28

new. It was a mix

4:30

of subscription gaming and cloud streaming

4:32

and just a willingness to

4:34

put its software on competing platforms

4:36

all to try and break

4:38

free from a losing race against

4:41

its rivals. Well, it's

4:43

been eight years and that hasn't

4:45

quite worked out like we might

4:47

have thought. Certainly not like Phil

4:49

Spencer thought. Xbox is still very

4:51

much in a distant third place

4:53

in the console race. Some estimates

4:55

put Xbox hardware sales at less

4:57

than half of the number of

5:00

PS5s that Sony has sold. That's

5:02

despite some record breaking, hugely controversial,

5:04

hugely litigious game studio acquisitions that

5:06

have together cost Microsoft almost a

5:08

hundred billion dollars. Meanwhile,

5:10

Nintendo is just kind of off in

5:12

a league of its own. It sold

5:15

more than 150 million switched units since

5:17

that console launched again in 2017. And

5:19

the eventual switch to which is coming,

5:21

we think, later this year is also

5:23

expected to be a smash hit. Game

5:27

Pass is reasonably successful for what

5:29

it is. And we'll get

5:31

into what that looks like. But

5:33

it definitely hasn't changed the

5:35

world the way that Netflix did

5:37

to Hollywood. There's no before

5:39

and after moment that we've had

5:41

yet. People are still mostly

5:43

buying new games, sometimes even still

5:45

on a disc, sometimes from

5:47

Best Buy and Walmart. Streaming a

5:49

game to your phone or

5:51

TV from the cloud remains a

5:53

pretty niche activity. So what

5:55

exactly happened here? Why did Microsoft's

5:57

master plan not pan out

5:59

and can? Can it still succeed if the

6:01

right combination of factors comes together over

6:03

the next several years? To break all

6:05

this down, I invited Ash Parish, the

6:08

Virgin's video game reporter, on the show

6:10

to talk about all the struggles of

6:12

Xbox and Game Pass, and where she

6:14

sees the future of the gaming industry

6:16

headed in the next few years? Okay,

6:18

Xbox Game Pass, and the elusive quest

6:20

to build a Netflix for gaming. Here

6:22

we go. Ash

6:37

Parish, welcome to Decoder. Hey,

6:39

thanks for having me. I think before

6:42

we get into kind of what's happening

6:44

now and where we go from here,

6:46

let's just lay the land a little

6:48

bit. It seems safe to say that

6:50

it's been kind of a rough few

6:53

years for Microsoft in the gaming world.

6:55

Can you just sort of position Microsoft

6:57

in the universe of gaming for me

6:59

right now? It's like one of the

7:01

biggest names it is PlayStation and Xbox.

7:03

It's like, it's like, it's right in

7:05

there. But it also kind of feels like

7:08

it's losing. Like what's going on here? It's

7:10

kind of hard to position Xbox

7:12

within the sentiment of gamers themselves because

7:14

there are still... quite a few people

7:17

that cling to that lingering tribalness

7:19

of like the console wars. I feel

7:21

like they're always going to be

7:23

Xbox diehards. They grew up with the

7:25

360 in the house or even maybe

7:28

a big fatty, the original Xbox.

7:30

And you know, they have love for

7:32

those entrenched franchises like Halo and

7:34

now elder scrolls and things like

7:36

that. So there's always going to

7:38

be that element that props up

7:40

the brand somewhat. It is not enough

7:43

when you are competing against

7:45

PlayStation 5 which has thoroughly

7:47

dominated the in-home console market

7:49

and then there's Nintendo which

7:52

has dominated PlayStation even harder

7:54

which is in its own

7:56

stratosphere. So Microsoft is holding

7:58

on but like... at its fingertips

8:00

at this point, and it just can't

8:02

keep up. It might be weird to think

8:05

about Microsoft, a company with a market

8:07

cap that last month broke three trillion

8:09

dollars, trillion with a T, as barely

8:11

holding on and failing to keep up.

8:13

But what Ash just said is the genuine

8:16

sentiment in the gaming industry, and it's

8:18

been that way for some time now. If

8:20

we had to trace Xbox's struggles... to

8:22

a single point. I think you could

8:25

argue that it started back in 2013

8:27

when the Xbox One was announced. The

8:29

Xbox One was the successor to the

8:31

best-selling console in Microsoft's history, the Xbox

8:34

360. It had dominated the early era

8:36

of online gaming and became the go-to

8:38

platform for huge first-person shooters like Halo,

8:40

call of duty, and gears of war.

8:43

Those were big games, and the 360

8:45

was a big console. In as

8:47

much as the console wars were

8:49

a thing at that Microsoft... handily

8:51

won that generation. Sony's PS3 had

8:53

struggled out of the gate, mostly

8:56

because it cost $500 back in

8:58

2006 money. The Xbox 360 had

9:00

launched a year earlier, it launched

9:02

for $100 less, it had Xbox

9:04

Live, it managed to define a

9:06

whole era of gaming for a

9:08

generation of players and really cemented

9:10

the Xbox brand as we know

9:12

it today. I think people who

9:14

still love the Xbox, love the

9:16

Xbox 360. Ask any millennial

9:18

gamer about that time, and

9:21

they'll probably agree that the

9:23

360, especially combined with Xbox

9:25

Live, was the king. Though Sony

9:27

did end up eventually selling roughly

9:29

the same number of consoles, sure,

9:31

the 360 was the winner. But

9:34

fast forward to 2013, and

9:36

everything turned. The Xbox One launched

9:38

with a weird focus on non- gaming

9:40

entertainment, including a mandatory second-gen connect motion

9:42

sensor, the thing that's out on top

9:45

of the box and saw you moving

9:47

around. It also had the ability to

9:49

plug in your cable box for some

9:52

reason, and it had this always-on connection

9:54

requirement that Microsoft pitched as a way

9:56

to let players share and even resell

9:59

digital games. away Microsoft was just pummeled by the

10:01

press and more importantly the broader gaming community for poor

10:03

messaging and frankly confusing marketing. What was this thing that

10:05

Microsoft was making? Sony meanwhile took the opportunity to just

10:07

twist the knife and it promoted the PlayStation 4 that

10:09

same year as a device purpose-built for gamers. It was

10:12

a game console that just played games and it turned

10:14

out that's what people wanted. Microsoft ended up dropping a

10:16

lot of its restrictions and weird entertainment ideas before launch,

10:18

but the damage was done. The Xbox one would go

10:20

on to sell fewer than 60 million units, while the

10:22

PS4 sold close to 120 million. It seems like PlayStation's

10:24

messaging has been so games focused, and that's why it

10:26

is across all boards, like the biggest console, not barring

10:29

Nintendo, remember. completely different conversation. You have to shift gears

10:31

if you want to talk about Nintendo, at least, you

10:33

know, within America. That's why PlayStation has always dominated. So

10:35

yeah, I would agree, honestly. Microsoft still hasn't ever really

10:37

bounced back from that whole episode, though not for a

10:39

lack of trying. In the aftermath of the Xbox One

10:41

launch, Phil Spencer was promoted to head of the Xbox

10:43

Division, and he set out to try and reverse the

10:46

company's fortune in the gaming market, to bring it back

10:48

to gamers in a real way, even if that would

10:50

take years and an awful lot of money. We'll get

10:52

into some of the details on Microsoft's evolving distribution strategy

10:54

in a minute, but let's take a second to look

10:56

at a few of those big swings. Like we mentioned,

10:58

Microsoft launched Game Pass in 2017, but before that, Spencer

11:00

started writing some really big checks to bring more studios

11:03

under the Xbox umbrella. The big idea was that exclusive

11:05

games, like what Sony had with The Last of Us

11:07

and Uncharted, could turn the tide back to Xbox. Mojang,

11:09

the Minecraft maker, was an early one, back in 2014,

11:11

and the pace picked up over the years. It bought

11:13

Bethesda the publisher of Fallout and Elder Scrolls for seven...

11:15

$2 .5 billion in 2020,

11:17

which seemed huge until Microsoft

11:20

dropped nearly $70 billion to

11:22

purchase Activision Blizzard, the maker

11:24

of Call of Duty, in

11:26

2022. What did Microsoft hope

11:28

would happen here by spending

11:30

all of this money? Here's

11:32

Ash. So it kind of

11:34

goes back to the conversation

11:37

we were just having about

11:39

PlayStation deciding like we're just

11:41

this is a console that

11:43

plays games. Here are all

11:45

the games. It's getting back

11:47

to that. They bought Bethesda

11:49

thinking that, you know, the

11:51

Elder Scrolls games and their

11:54

new IP would give them

11:56

the hits that they need,

11:58

but then Starfield came out

12:00

and it was a dud

12:02

and Redfall came out and

12:04

it was a bit of

12:06

a dud. We haven't seen

12:08

hide no hair of either

12:11

the next Elder Scrolls and

12:13

we know fallouts not coming

12:15

anytime soon, despite the fact

12:17

that it's blowing up on

12:19

Amazon Prime. So you've got

12:21

these one -two punches of like,

12:23

we spent all this money

12:25

on games and the games

12:28

aren't doing what we need

12:30

them to do. And then

12:32

our own catalog is also

12:34

suffering. The trend line is

12:36

going down. So I think

12:38

the strategy then became, okay,

12:40

what can we buy that

12:42

is going to be a

12:45

surefire hit and they turned

12:47

their heads and saw Activision

12:49

Blizzard with, you know, Call

12:51

of Duty and was like

12:53

there. I mean, truly, probably

12:55

the safest bet in the

12:57

universe of gaming, it would

12:59

be to just spend whatever

13:01

it costs to get Call

13:04

of Duty, right? Like the

13:06

theory there, if you build

13:08

all the way to that,

13:10

what you just described would

13:12

absolutely lead you to Call

13:14

of Duty. It makes total

13:16

sense. It does make sense.

13:18

And then there's the fact

13:21

that those games are multi

13:23

-platform. Like people who want

13:25

to play them can still

13:27

play them on PC. They

13:29

can still play them on

13:31

PlayStation, which is where they

13:33

play it. I mean, if

13:35

you look at the Cercana

13:38

charts, Call of Duty is

13:40

at the top or very

13:42

near the top of the

13:44

most played games list on

13:46

Xbox and PlayStation. So like

13:48

there's no incentive to switch.

13:50

It does seem like Microsoft

13:52

put itself in kind of

13:55

an impossible position, which is

13:57

either we've spent all the

13:59

money in the known universe

14:01

on Call of Duty and now we're going to make

14:03

it so that many fewer people can buy Call of

14:05

Duty just in order to make people excited about Xbox,

14:07

which is In a very sort of long-term bet

14:10

on the Xbox thing you could kind

14:12

of squint and see it But like

14:14

that's an objectively stupid business decision and

14:16

like you said calls all kinds of

14:18

you know issues with the government and

14:20

regulars and like that deal

14:22

probably wouldn't have gone through buying

14:24

Act Division Blizzard if Microsoft had

14:27

intended to make it an Xbox

14:29

exclusive. So you can't do that. But

14:31

then by not doing that, you kind of

14:33

kill the Xbox brand even more. And

14:35

so I feel like Microsoft has been

14:38

trying to do this back and forth

14:40

thing where it's like, oh, okay, the

14:42

Xbox is not important, but also we

14:44

are wildly over-invested in making the Xbox

14:47

important. And I have never been able

14:49

to figure out if this is like two

14:51

teams that need to have more meetings and

14:53

figure out who's right. this company has actually

14:56

thought it could do both of those

14:58

things simultaneously. It's very

15:00

damned if you do damned if you

15:02

don't, but that actually segues quite nicely

15:04

into like the next like arm of

15:06

this strategy is the fact that now,

15:09

okay, the Xbox hardware is not important.

15:11

anymore. So what are we going to

15:13

do? We're going to turn everything into

15:15

an Xbox. We're going to make sure

15:17

that you can play these games no

15:20

matter what, wherever and on whatever. So

15:22

they're pushing, they're cloud streaming, they're pushing

15:24

their game pass subscriptions, there's,

15:26

that's why I get advertisements on

15:28

my Samsung TV for playing Indiana

15:30

Jones and the Great Circle because

15:32

they want at least, if you're

15:34

not buying an Xbox console, at

15:36

least play our games, because maybe

15:38

we can get you that way. So

15:41

that's that's the plan. I don't think

15:43

that plan is working out that great

15:45

for them either What Ash just mentioned

15:47

is a really important piece of this

15:49

puzzle Multi-platform gaming is a thing

15:51

we need to talk about for

15:53

the last 10 years or so

15:55

Microsoft has been pushing the Xbox

15:58

platform in two separate maybe even

16:00

directory directions. On one hand, it's

16:02

been buying massive game publishers and

16:04

their very expensive catalogs all to

16:07

try and get people to buy

16:09

an Xbox or sign up for

16:11

Gamepass and just spend more time

16:14

with their Xbox turned on. Every

16:16

minute a player does that is

16:18

a minute not spent playing Fortnite

16:21

on PlayStation or deciding that they'd

16:23

rather play some new indie game

16:25

on their Nintendo switch instead. This

16:28

is the old school tried and

16:30

true business model of console gaming.

16:33

big exclusive games, sell hardware, and

16:35

without those, most people don't want

16:37

your hardware. It's pretty simple. For

16:40

Xbox, that whole plan hasn't really

16:42

worked out, as you just heard

16:44

Ashley out. And it also had

16:47

a lot of really disastrous second-order

16:49

effects for Xbox, because it meant

16:51

that PlayStation became the place that

16:54

players began to flock to play

16:56

big live service games with their

16:58

friends, particularly fortnight and then fortnight

17:01

copycats like Call of Duty War

17:03

Zone and Apex Legends. And players

17:05

started spending money on those games,

17:08

an awful lot of money. And

17:10

Sony got to collect 30% of

17:12

every transaction. That was a hugely

17:15

winning formula for everybody except Microsoft.

17:17

At the same exact time as

17:19

all of that, Microsoft has been

17:22

trying to think beyond the Xbox,

17:24

to a world where it lets

17:26

players buy a game once and

17:29

play it on their Xbox and

17:31

on their PC as it started

17:33

doing way back in 2016. That

17:36

was one of the things that

17:38

Microsoft could do that no one

17:40

else could, was combine Xbox and

17:43

PC gaming. Or you could subscribe

17:45

to Game Pass and have a

17:48

whole bunch of games that you

17:50

can play on whatever device you

17:52

like. And in some extreme cases,

17:55

as we've seen recently, Microsoft is

17:57

even taking all of these once-exclusive

17:59

games and re-releasing them for PlayStation

18:02

and switch. This has all gotten

18:04

really messy for Microsoft, and Xbox

18:06

fans, who bought the hardware to

18:09

play the games, have understandably grown

18:11

pretty frustrated with all of these

18:13

conflicting strategies. So we're going to

18:16

dive into Game Pass and Multi-platform

18:18

gaming and try to make sense

18:20

of what went wrong here and

18:23

whether Microsoft can actually manage... to

18:25

untangle this knot. But first, we

18:27

need to take a quick break.

18:30

We'll be right back. It's been

18:32

reported that one in four people

18:34

experienced sensory sensitivities, making everyday experiences

18:37

like a trip to the dentist,

18:39

especially difficult. In fact, 26% of

18:41

sensory sensitive individuals avoid dental visits.

18:44

In Sensory Overload, a new documentary

18:46

produced as part of Sensodyne's Sensory

18:48

Inclusion Initiative, we follow individuals navigating

18:51

a world not built for them,

18:53

where bright lights, loud sounds, and

18:55

unexpected touches can turn routine moments

18:58

into overwhelming challenges. Burnett Grant, for

19:00

example, has spent their life masking

19:03

discomfort in workplaces that don't accommodate

19:05

neurodivergence. I've only had two full-time

19:07

jobs where I felt safe, they

19:10

share. This is why they're advocating

19:12

for change. Through deeply personal stories

19:14

like Burnett's, sensory overload highlights the

19:17

urgent need for spaces, dental offices,

19:19

and beyond, that embrace sensory inclusion.

19:21

Because true inclusion requires action with

19:24

environments where everyone feels safe. Watch

19:26

Sensory Overload now, streaming on Hulu.

19:28

Support for this podcast comes from

19:31

Vanta. Trust isn't just earned. It's

19:33

demanded. Whether you're a startup founder

19:35

navigating your first audit or a

19:38

seasoned security professional scaling your GRC

19:40

program, proving your commitment to security

19:42

has never been more critical or

19:45

more complex. That's where Vanta comes

19:47

in. Businesses use Vanta to establish

19:49

trust by automating compliance needs across

19:52

over 35 frameworks like SOC II

19:54

and ISO 27001. Centralized security workflows,

19:56

complete questionnaires up to five times

19:59

faster, and proactively manage vendor risk.

20:01

Vanta not only saves you time,

20:03

it could also save you money.

20:06

New IDC white paper found that

20:08

Vanta customers achieve $535,000 per year

20:11

in benefits, and the platform pays

20:13

for itself in just three months.

20:15

You can join over 9,000 global

20:18

companies like Atlacian, Cora, and Factory,

20:20

who use Vanta to manage risk,

20:22

improve security in real time. For

20:25

a limited time, our audience gets

20:27

$1,000 off Vanta at vanta.com/Vanta. Today

20:32

at T-Mobile I'm joined by a

20:34

special co-anchor. What up everybody? It's

20:36

your boy, Big Snope deal, double

20:38

sheet. Snoop! Where can people go

20:41

to find great deals? Hand to

20:43

t-mobile.com to get four iPhone six

20:45

teams with Apple intelligence on us.

20:47

Plus four lines plus four lines

20:50

for Apple intelligence on us. Plus

20:52

four lines for 25. That's four

20:54

lines for Apple intelligence, with Apple

20:56

Intelligence, with Apple intelligence,

20:58

requires IOS-18 point one

21:01

or later. We're

21:04

back. I'm David Pierce, and I'm here

21:06

with Virg Gaming Reporter Ash Parish, talking

21:08

about the uphill battle that Microsoft has

21:10

been waging with Xbox for more than

21:12

a decade. Before the break, we were

21:15

discussing how many of Microsoft's particularly

21:17

costly attempts at course correction here,

21:19

like buying Bethesda and Activision Blizzard,

21:21

haven't actually had what many might

21:23

think of as the desired outcome.

21:26

which is more Xbox sales. In

21:28

fact, Xbox sales were down in

21:30

Microsoft's most recent quarter, and the

21:32

latest estimates say Microsoft has probably

21:34

sold fewer than 30 million Xbox

21:37

Series X and Series S units

21:39

as of last November, while Sony

21:41

just publicly confirmed the PS5 has

21:43

crossed 75 million units. If that's the

21:46

metric you care about, Sony is winning.

21:48

Microsoft has lost this generation of

21:50

consoles just like the last one.

21:52

But what if that doesn't matter? Ash and

21:54

I were just talking about Microsoft's multi-platform

21:57

push and how combined with Game Pass

21:59

it might mean a world where the

22:01

Xbox is no longer a device that sits

22:03

under your TV, and instead it's a software

22:06

platform that lives on any screen. Xbox becomes

22:08

less like a computer and more like a

22:10

social network in that sense. You could play

22:13

call of duty on your PlayStation, see if

22:15

Thieves on your Nintendo switch, and stream elder

22:17

scrolls on your iPad or fallout on your

22:19

Android phone. It's just Xbox everywhere. Xbox all

22:22

the way down. That is, at the very

22:24

least, exactly how Microsoft would like you to

22:26

think about it. So much so that the

22:29

company launched a new ad campaign last

22:31

fall called This is an Xbox promoting

22:33

the idea that virtually any piece of

22:35

hardware with access to a screen could

22:37

conceivably be part of the Xbox ecosystem.

22:40

But making that work involves a lot

22:42

of moving parts. coming together in ways

22:44

that simply just don't work very well

22:46

today. It involves a lot of things

22:48

that Microsoft and Xbox aren't actually in

22:50

charge of, like internet speeds. And a

22:53

lot of die-hard Xbox fans have begun

22:55

to feel pretty disillusioned with the direction

22:57

of the platform. So I have

22:59

to know what you think about the this

23:01

is an Xbox ad campaign, which I think

23:03

came out last fall Yeah, and I would

23:05

say made a lot of gamers feel a

23:07

lot of feelings big feelings, buddy

23:09

And most of them were not

23:11

positive one towards the Xbox team.

23:13

What did you think? It annoys Some

23:16

people that I know because of

23:18

like the literalness of it like

23:20

this is not an Xbox I

23:22

can't return this Xbox to game stop

23:24

and get four dollars to purchase

23:26

like you know their subscription Nope, not

23:28

that anymore rip game informer. Yeah,

23:30

it it's a marketing strategy. I

23:32

feel nothing about it. It's Probably

23:35

going to work in their favor more

23:37

than like the gaming press believes it

23:39

is because we're dealing with Not I

23:42

hate to use the word normies, but

23:44

you know the average consumer not terminally

23:46

online freaks like the kinds that follow

23:48

a video game industry news So I

23:51

think it'll work for them in that way

23:53

where you know kids be on them phones

23:55

and they like oh I can play you

23:57

know, whatever game from my phone or my

23:59

tablet I'm in, my Microsoft, Azure,

24:01

Surface, whatever, I'm in, that's fine,

24:04

that's cool, that's how I play games most

24:06

of the time, so yeah, I think that'll

24:08

work. I don't know though, if it'll

24:10

be enough to pull them, to make, to

24:12

bring parody between, you know,

24:15

at least with PlayStation. Well, yeah,

24:17

there's been this push from the Xbox

24:19

team in general over the last few

24:21

years, it seems like, to take a

24:23

lot of those games and put them.

24:25

Both on game pass, but also

24:28

on other platforms like the Indiana

24:30

Jones game that everybody seems to

24:32

like very much is is coming

24:34

to PlayStation and see if thieves

24:36

is out on lots of places

24:38

and more and more games are

24:41

coming to game pass It's actually

24:43

a pretty solid library at this

24:45

point. So maybe Microsoft is just

24:47

happy being out of the Xbox

24:49

hardware business like that Microsoft would

24:52

like you to believe that the

24:54

console era is over There will

24:56

always be consoles, end of,

24:58

like we're not going to please

25:01

God, I hope that's not

25:03

the trend in the next 10

25:05

years, because that would make it

25:07

really hard to own anything.

25:10

Especially with... to be the case. All

25:12

of these companies would. The like live

25:14

service game seems to be what everybody

25:16

would like to believe is the future.

25:18

That they can revoke at any time, get

25:20

their money out of you, and not have

25:22

to support it at all whatsoever. Yeah,

25:24

no, I understand. So there's always going

25:27

to be a console, but I think

25:29

this shift away from, you know, console

25:31

probably might be better for their bottom

25:33

line, if not their whole ethos as

25:35

a brand. I think what they're trying

25:37

to do is shift. the identity of

25:39

Xbox away from like this plastic box

25:41

and make it more on the software

25:43

because you know maybe they're trying to

25:45

be on their Sega tip and you know not

25:48

rise from the ashes at least or you know

25:50

rise from the ashes kind of the way Sega

25:52

did when it got out of the console business.

25:54

So maybe this is like that you know the

25:56

old world is dying new one struggling to be

25:59

born and this is Xbox's time for monsters

26:01

where we try all these things until

26:03

we find what sticks. So the big

26:05

component here that would in

26:07

theory solve all of Microsoft's problems kind

26:09

of all at once is of course

26:12

game pass. If there truly was a

26:14

Netflix for gaming that could get hundreds

26:16

of millions of subscribers like Netflix has

26:19

It wouldn't matter as much how many

26:21

Xboxes are sold. And it wouldn't even

26:23

really matter whether Microsoft had big exclusive

26:26

successful games like Sony and Nintendo do.

26:28

You just have a huge evolving catalog

26:30

of great stuff on whatever screen you

26:33

wanted for about 20 bucks a month,

26:35

and that would be popular enough to be

26:37

a booming profitable business. We've

26:39

been throwing around numbers like 120 and

26:41

150 million for game consoles as the

26:44

upper reaches of success. But Netflix has

26:46

over 300 million paid subscribers now. And,

26:48

by the way, Netflix also has games

26:50

as part of its subscription now. And

26:52

a game subscription model that big would

26:54

blow the console business out of the

26:56

water. But that is not the world

26:58

we live in. A few years ago, Phil

27:01

Spencer even admitted that after a half

27:03

decade on the market, it was pretty

27:05

clear that Game Pass was never going

27:07

to represent the primary way that people

27:09

experience Xbox games. At least, not for

27:11

a long time. The quotes here are

27:13

actually very very telling. On console I've

27:16

seen growth slow down on game

27:18

pass mainly because at some point

27:20

you've just reached everybody on console

27:22

who wants to subscribe and we

27:24

don't see subscription unlike some other

27:26

forms of media that have really

27:28

moved almost solely to a subscription

27:30

business. Today... Game Pass is an

27:32

overall part of our content and

27:34

service revenue. It's probably 15%. I

27:36

don't think it gets bigger than

27:38

that. I think the overall revenue

27:40

grows, so 15% of a bigger

27:42

number is a bigger number. The

27:44

last public metric we have from

27:47

Microsoft puts Game Pass at 34

27:49

million subscribers a year ago. But

27:51

that was before a really tough

27:53

12 months for Microsoft that involved

27:55

high-profile studio closures, a bunch of

27:58

layoffs in its gaming division. Game

28:00

Pass, it's not at all inconceivable

28:02

to imagine Game Pass growth being

28:04

minimal or maybe even flat. But

28:06

why exactly has it been so

28:09

tough to launch a profitable,

28:11

sustainable subscription model for gaming

28:13

that continues to grow across

28:15

all platforms, like Netflix? Game

28:17

Pass on its face sounds like a

28:19

really attractive value proposition. You pay a

28:21

flat fee, you get all these games,

28:23

pay a little bit more, and you can

28:25

get like call of duty or something like

28:27

that. I pay for a subscription, but

28:29

do you want to know how

28:32

often I've used Game Pass and

28:34

maybe the list? I do. I really do,

28:36

yeah. Like, not at all. My husband

28:38

will, like, go on there and maybe

28:41

look for it, look for something to

28:43

do or something to play that's come

28:45

to Game Pass, but like, neither

28:47

of us use it. Why? What for? It's

28:49

like, you know, Netflix analysis paralysis, paralysis,

28:52

like you get on this big streaming

28:54

service and you have all these things

28:56

at your fingertips and you can't decide

28:58

what is interesting to you so you

29:01

just put it down and go back

29:03

to playing Fortnite. And that's and there

29:05

it lies the rub. You have all of

29:07

these games that you have to pay

29:09

money for. Meanwhile, the games that you

29:11

are paying for, they're losing money by

29:13

putting their stuff on your service, so

29:15

they're not going to want to do

29:17

that anyway. Meanwhile, you have to compete

29:19

against the biggest time sync game on

29:22

the planet, which is fortnight and

29:24

roll blocks. And you are

29:26

consistently losing in that match up.

29:28

Let's take a step back here and actually

29:30

talk through the game pass world a little

29:32

bit, because I think there is something about

29:35

the... basic value proposition here that makes

29:37

perfect sense to me as a person.

29:39

Like we should talk about the business

29:41

side of this for developers and distributors

29:43

and all these folks, but just as

29:45

like a person who likes to play

29:47

video games, it's the same reason that like

29:49

Spotify is more compelling than buying albums, right?

29:51

I have access to everything that has ever

29:53

been made or like Netflix has many issues,

29:56

but it also has lots of shows and

29:58

I go on Netflix a lot. I watch

30:00

Netflix and I happily pay for

30:02

Netflix. But in gaming, this idea

30:04

has taken much longer to catch

30:06

on, and I think much longer

30:08

for anyone to sort of figure out

30:11

how to make it work. Why has gaming

30:13

been so much slower to go

30:15

sort of all subscription, everything,

30:17

than seemingly the rest of

30:20

entertainment? The way we consume video

30:22

games is much different than the

30:24

way that we consume TV or

30:26

music. Both of the latter are very

30:28

passive things. You can have Netflix on

30:30

in the background while you do something

30:32

else, same with music. Or you can

30:34

take a little bit of time to

30:36

like pay attention to like a TV

30:38

show or something, but even then you're

30:41

giving up, you know, a couple hours

30:43

at a time. Gaming is something much

30:45

different. You have to invest an amount

30:47

of time and an amount of attention.

30:49

And that calculus is different

30:51

when you put it. up with Game Pass

30:53

because unless you go to that for

30:55

like a specific game that you always

30:57

play you have these all these games

30:59

like so many games which you would

31:01

think is like oh this is awesome

31:03

I've got all these games and to

31:06

a certain subset of people of players

31:08

that is good for them like it

31:10

works and it's you know game pass

31:12

and PS Plus is like the best

31:14

thing that's ever happened to them but

31:16

the majority of gamers want to play

31:18

with their friends and they don't know

31:20

what they like and it's hard finding

31:22

games on those subscription services. So if

31:24

you've got someone who wants to play

31:26

with their friends, then they're going to

31:28

play the game that they play with

31:30

their friends. And most often, that's

31:32

not a game pass. Fortnight ain't on game

31:34

pass. Well, it also, there's a case

31:37

to be made inside of what you

31:39

just said that actually the Netflix for

31:41

video games already does exist. It's just

31:44

called Fortnight. Yes. Like what the actual

31:46

behavior you're trying to replicate, which you're

31:48

trying to play with. Fun but relatively

31:51

mindless for the next two hours that

31:53

that actually The answer to that is not

31:55

hundreds of games It's one game and it's

31:57

called that can do hundreds of things Or

32:00

maybe it's robots or whatever, but like

32:02

maybe those things already exist and we

32:04

solved that problem. I've never heard it

32:06

put like that, but that's actually really

32:08

smart. Yeah, I mean, that's why it's

32:10

at the top of the list every

32:13

year, every month, day after day. And

32:15

then other mobile, smaller, not passive, but

32:17

you know, appointment gaming kind of games

32:19

on mobile. So like your candy crushes

32:21

and stuff like that. That's where people

32:23

are playing. It's difficult because it feels

32:26

like, you know, you've got all these

32:28

gamers and they play all these different

32:30

things, but the majority population of like

32:32

people who play video games only keep

32:34

it to like a handful of titles.

32:36

Game Pass doesn't serve them. It just

32:38

doesn't. And then those people are going

32:41

to want to play with their friends.

32:43

And that's what Fort Knight is for.

32:45

Right. Yeah, you've got me now thinking

32:47

about. the sort of content mix of

32:49

all of these games and it feels

32:51

like what's what Game Pass is full

32:54

of is games that would love you

32:56

to play them for like 2030 4060

32:58

hundreds of hours and what Game Pass

33:00

actually needs is like sitcoms like what

33:02

can you just jump in and do

33:04

for 30 minutes at a time right

33:06

and I feel like casual gaming the

33:09

stuff you're talking about the candy crushes

33:11

on phones and whatever has kind of

33:13

eaten the bottom of that market, the

33:15

like I have a little bit of

33:17

time to kill, I think people just

33:19

like sit on their couch and leave

33:22

the TV off and play those games

33:24

on their phone. And then it's like

33:26

if I want to like really do

33:28

something serious, it's the equivalent of like

33:30

going to the movie theater. There are

33:32

lots of games for that the sort

33:34

of middle ground of like just ways

33:37

to kill a little bit of time

33:39

and find something fun to do, especially

33:41

with your friends, that actually a lot

33:43

of the big... sexy games that these

33:45

companies spend all this money on are

33:47

not suited for that at all. No,

33:50

not really. Yeah, wonder along those lines

33:52

how big this market actually is. I

33:54

mean, I think at the beginning, Game

33:56

Pass is eight years old, which blew

33:58

my mind to think about. It's been

34:00

around a long time, and it grew

34:02

very fast, and then kind of stopped.

34:05

growing and we sort of stopped talking

34:07

about it and it's just like around

34:09

and people have it but it's not

34:11

it is not the future of games

34:13

that Microsoft was hoping it would be

34:15

kind of all at once eight years

34:18

ago. But then you have people like

34:20

Phil Spencer who were running around talking

34:22

about console growth slowing down because basically

34:24

everybody who wants a console has a

34:26

console. And and part of me wonders

34:28

like is there just a case to

34:30

be made that that's true that actually

34:33

the problem with all of this is

34:35

It's just a way of doing console

34:37

gaming, and console gaming is actually really

34:39

well-served already. And the people who want

34:41

to play games for hundreds of hours

34:43

have lots of ways to do that,

34:46

including provided by Microsoft, and so this

34:48

huge new growth engine for video games

34:50

that Microsoft thought might exist, actually doesn't,

34:52

because they're just console gamers who have

34:54

consoles. Yeah, and the people that they're

34:56

trying to reach... like that newer market

34:59

which is younger people, they play on

35:01

their phones. So it's hard to... like

35:03

make that calculus. If you've already got

35:05

a phone that plays the games that

35:07

you want to play with your friends

35:09

or however you play them, why do

35:11

you need to spend a couple hundred

35:14

dollars on the console and then you

35:16

know 20 bucks a month on the

35:18

online service so you can play online

35:20

with your friends that calculus doesn't make

35:22

sense. So yeah, the entrenched gamers like

35:24

you know gamers of our age, we've

35:27

got all three consoles probably in our

35:29

house and we'll probably maintain them. But

35:31

that younger market they are sticking more

35:33

strictly to like mobile games. And that

35:35

is serviced by, you know, a bunch

35:37

of different games that are playable on

35:39

mobile and Microsoft with its cloud streaming,

35:42

which kind of informs the strategy that

35:44

they're going for now. What about for

35:46

the game developers? Like, is something like

35:48

Game Pass, even in theory, a good

35:50

idea? You mentioned it doesn't make economic

35:52

sense. Tell me why that is. So

35:55

at first, yeah, because I believe at

35:57

first Microsoft was throwing tons and tons

35:59

and tons of money. at these developers

36:01

to lock their games up on game

36:03

pass. They've kind of like turned off

36:05

that money hose for various different reasons

36:07

that I'm sure you can guess and

36:10

now As we get more and more data

36:12

about it, we're hearing that if you

36:14

put your game on game pass, you

36:16

might lose up to 80% of sales

36:18

you would have otherwise made via if

36:21

you had kept it on like Steam

36:23

or just kept it as a standalone

36:25

game, not part of a subscription service.

36:27

And with the way that studios are

36:29

hurting now, you're not getting the kind

36:32

of money you thought you were going

36:34

to get that Microsoft was handing out

36:36

before. On top of that, you're putting

36:38

all these potential sales at risk. And

36:40

with the way that Indy Studios have

36:43

been hurting with the whole like post-pandemic

36:45

retraction and having to lay off like

36:47

hundreds of thousands of people at this

36:49

point, like... Why would you take that risk?

36:51

Like you need every dollar and every

36:53

dime that you can scrape from people

36:55

to keep yourself afloat so it doesn't

36:57

make sense to potentially kneecap 80% of

37:00

your sales by putting it on my

37:02

own game pass. So There are still studios

37:04

that are making that determination,

37:06

but there are people that are increasingly

37:09

deciding, no, this isn't worth it

37:11

to us anymore. that attraction, that the

37:13

time when being on game pass was attractive

37:15

has passed. So we're going to have to,

37:17

you know, do this ourselves. Yeah, it makes

37:19

me think of those brief moments where

37:21

meta would just throw money at anybody

37:23

who wanted to make a game for

37:25

Quest because they were so desperate to

37:27

make it work. And then eventually it

37:29

comes around to like, okay, there's an

37:32

audience for this, but it's not big

37:34

enough. And meta's eventually going to stop

37:36

writing us these giant checks for no

37:38

reason. So we're just gonna kind of

37:40

walk away from this. And it feels

37:43

like the same thing has kind of

37:45

happened with Game Pass. Yeah, it makes

37:47

sense. You can only brute force it

37:49

for so long if you're one of

37:51

these companies. Yeah, you can only

37:53

be a loss leader for so long. Yeah.

37:56

We need to take another quick break,

37:58

but we will be right back.

38:00

Support for this show comes from

38:02

Oracle. Even if you think

38:04

it's a bit overhyped, AI

38:07

is suddenly everywhere. From self-driving

38:09

cars to molecular medicine to

38:11

business efficiency. If it's not

38:13

in your industry yet, it's

38:16

coming. Fast. But AI needs

38:18

a lot of speed and

38:20

computing power. So how do

38:23

you compete without costs spiraling

38:25

out of control? Time to

38:27

upgrade to the next generation

38:30

of the cloud. Oracle Cloud

38:32

Infrastructure, or OCI. OCI is

38:34

a blazing fast and secure

38:36

platform for your infrastructure, database,

38:39

application development, plus all your

38:41

AI and machine learning workloads.

38:43

OCI costs 50% less for

38:46

compute and 80% less for

38:48

networking, so you're saving a

38:50

pile of money. Thousands of

38:52

businesses have already upgraded to

38:55

OCI, including Vodafone, Thompson Reuters,

38:57

and Suno AI. Right now,

38:59

Oracle is offering to cut

39:02

your current cloud bill in

39:04

half, if you move to

39:06

OCI. For new U.S. customers

39:09

with minimum financial commitment, offer

39:11

ends March 31st. See if

39:13

your company qualifies for this

39:15

special offer at oracle.com/Vox. You

39:20

might have come into this year with all

39:22

these big plans, but you're still scrambling to

39:24

hire that open position at your company. It's

39:26

time to get a big part of your

39:29

to-do list marked off with the help of

39:31

indeed. At other job sites, it's a struggle

39:33

to get your job even seen, but indeed

39:35

sponsored jobs help you stand out and hire

39:37

fast. With sponsored jobs, your post jumps to

39:39

the top of the page for your relevant

39:41

candidates, so you can reach the people you

39:43

want faster. According to Indeed Data, sponsored jobs

39:45

posted directly on Indeed have 45% more applications

39:47

than non-sponsored jobs. Plus, with Indeed sponsored jobs,

39:50

there are no monthly subscriptions, no long-term contracts,

39:52

and you only pay for

39:54

results. There's no need

39:56

to wait any longer.

39:58

Speed up your hiring

40:00

right now with Indeed.

40:02

And listeners of this

40:04

show will get a

40:06

$75 sponsored job credit

40:08

to get your jobs

40:10

more visibility at Indeed.com/Vox

40:13

Business. Just go to

40:15

Indeed.com/Vox Business right now

40:17

and support our show

40:19

by saying you heard

40:21

about Indeed on this

40:23

podcast. Indeed.com/Vox Business. Terms

40:28

all you need. You

40:33

understand tech. You already use a

40:35

VPN, a password manager, and

40:37

an ad blocker. Surely you are

40:39

not exposed. Right? Find out

40:41

for sure by going to cloaked.com/Vox.

40:43

That's C -L -O -A -K -E -d.com/V -O

40:45

-X. There you can plug in

40:47

your phone number to see

40:49

if any of your personal information

40:51

is vulnerable. Cloaked can help

40:53

you get your data removed from

40:55

hundreds of data brokers, generate

40:57

unlimited working phone numbers to protect

41:00

your real one, and also

41:02

offers $1 million insurance against identity

41:04

theft. That's cloaked.com/Vox. And check

41:06

out with code podcast to

41:08

get 30 % off a Cloak

41:10

subscription. We're

41:18

back. This is Decoder. I'm David

41:20

Pierce and we're here with Verge

41:22

gaming reporter Ash Parish talking through

41:25

Microsoft's gaming strategy and why the

41:27

company has had such a tough

41:29

time making its vision for an

41:31

Xbox ecosystem that goes beyond consoles

41:33

actually turn into anything real. We've

41:35

dived into two parts of what

41:37

we could call the holy trinity

41:39

for Microsoft. The first is Game

41:41

Pass and making subscription gaming really

41:43

work at scale, which for Xbox

41:45

has been a mixed bag, let's

41:48

say, just to be optimistic. Game Pass

41:50

isn't growing as fast as it once did,

41:52

in part because it's hard to sell

41:54

people more subscriptions if they don't buy your

41:56

consoles, and if the games you put

41:58

on the service aren't very good. There

42:00

is game pass for PC, which is

42:02

still growing, but that doesn't get you

42:04

all the way there because not everyone

42:06

is a PC gamer. The second component here

42:08

is multi-platform gaming, which is this idea

42:10

that Microsoft games don't need to be

42:12

locked to the Xbox. They can live

42:14

on PC, they can live on rival

42:16

platforms like PlayStation and switch. As we said

42:18

earlier, that started way back in 2016 with

42:21

an initiative that let you buy a game

42:23

on Xbox and play it on PC without

42:25

having to pay for it a second time.

42:27

That is unequivocally a good thing if you're

42:30

a gamer, and it's something that Sony still

42:32

doesn't let you do with PlayStation games, because

42:34

it would mean losing out on revenue. A

42:36

world with fewer console exclusives is a step

42:39

in the right direction. 100%. Even if it

42:41

makes Xbox diehards feel bummed out that

42:43

they no longer have games only their

42:45

Xbox can play, I think we'll all get

42:47

over it. The third component, though, is

42:49

the one that's supposed to tie all

42:51

of this together into the forward-looking tech-focused

42:53

package that, in theory, only a company

42:55

with the cloud computing chops of Microsoft

42:57

could pull off. That is game streaming,

42:59

where you don't download the game at

43:01

all, and instead you stream the game

43:03

live from a far-away server. That is

43:05

the whole centerpiece of Microsoft's This is

43:07

an Xbox campaign. It's not that everything

43:09

is an Xbox, it's that nothing is

43:11

an Xbox, and the Xbox is in

43:13

a server, and you stream it from

43:15

somewhere. It's so unproven as a business

43:18

that Google has already launched and killed

43:20

an entire cloud gaming product in the

43:22

time between when Game Pass first launched

43:24

and Microsoft bought Activision Blizzard five years

43:27

later. Do you remember Google Stadium? If

43:29

you don't, it's fine. It wasn't very

43:31

good and it certainly wasn't a viable

43:33

enough business model to continue existing inside

43:36

of Google. I like this idea! But there's

43:38

really no evidence that it's going to

43:40

work. So I wanted to ask Ash,

43:42

is cloud gaming going to get there?

43:45

And if it does, if we do

43:47

arrive at this perfect marriage between subscription

43:49

gaming and game streaming that truly resembles

43:52

Netflix or Spotify, all the things you

43:54

want everywhere you are, then isn't Microsoft

43:56

kind of the only one who might

43:58

really make it happen? Is part

44:00

of the problem here just that cloud

44:02

gaming isn't very good? Like I go and

44:05

read our comments on the verge every time

44:07

we write about cloud gaming and someone or

44:09

many some ones always likes to bring up

44:11

the point that the main problem here is

44:14

just that it's not as good as playing

44:16

on a console. The graphics aren't as

44:18

good. There's latency. There are problems even

44:20

if you're playing like a fully online

44:22

game that requires a fast internet connection.

44:24

Anyway, it is going to be better

44:26

on a console than it would be.

44:29

on a cloud gaming system. If we

44:31

could solve that problem and like the

44:33

actual gameplay stops being a differentiator,

44:35

does all of this change? Yeah,

44:37

they're gonna have to solve that problem

44:39

and we'll find out it's so hard to

44:41

prognosticate where gaming is going because, you know,

44:44

if you and I were having this conversation

44:46

about game past four years ago, I bet

44:48

we would have been all in on it

44:50

just because four years ago was the pandemic

44:52

and we thought this number would keep going

44:55

up forever and it did not do that.

44:57

We would have bet. that game pass would

44:59

be everywhere. Like I was on the game

45:01

pass hype train for a while because of

45:03

the selection that they had for the price

45:05

that they had it as and like I

45:07

told you at the top of this, I

45:10

hardly use it. So... Well you're the ideal

45:12

customer, 20 bucks a month and you

45:14

barely use it, that's the dream. Yeah

45:16

I know, I'm gonna have to have

45:18

a conversation with my account about this

45:21

when we're done. But so it's so

45:23

hard to determine what will happen. I

45:25

would like to see that technology improve

45:27

and then we'll see. But man, it's

45:29

going to take a big generational turnover I

45:31

think because, you know, the people who

45:33

have the money to buy consoles still

45:35

want to buy consoles. They're not going

45:38

to do it on the cloud. And

45:40

then the people that cloud ostensibly will

45:42

be for probably won't have the money

45:44

for it or, you know, can't justify

45:46

spending, you know, money on a subscription

45:48

service or something like that. And I

45:51

think the other piece of it that

45:53

I... find myself wondering about a lot

45:55

is whether there is in fact

45:57

some huge group of people who

45:59

don't have or particularly use their

46:01

home console for whatever reason, but would

46:04

be more likely to pay 20 bucks

46:06

a month to play games if they

46:08

could do it in a high-end way

46:10

on their phone or their iPad, that

46:13

like, what if all of a

46:15

sudden the promise of AAA games

46:17

on your iPad with an external

46:19

controller becomes a thing? Is there

46:21

this giant untapped market of people

46:23

who would suddenly get really into

46:25

call of duty? I don't think so.

46:28

Evidence so far suggests no. It's

46:30

the big question to me and

46:32

I think to Microsoft. Yeah, because a

46:34

lot of this too is tied up

46:37

in like personal comfort, I think. And

46:39

I think even if we did eliminate,

46:41

you know, the technology issue, I try

46:44

to think of myself and maybe it's

46:46

because I've like aged out and maybe

46:48

like, you know, my 17 year old

46:50

nephew will feel something different. Even

46:53

if I knew that I could play call

46:55

of duty or whatever game completely fine, same

46:57

as a console on an iPad, I don't

46:59

think I would do it because that's just

47:02

not comfortable to me. I don't want to

47:04

play that kind of game on that kind

47:06

of system. Like you have to have things

47:08

that fit. And I'm more than okay with

47:10

like trying new experiences on different platforms.

47:13

I played Civ7 on the steam deck.

47:15

And I, you know, enjoyed it. So

47:17

I don't have a problem with that.

47:19

It's just that. I don't know, there's just

47:21

like a feeling there that you can

47:23

kind of only get by playing, you

47:25

know, on a console that I think might

47:28

have an outsized influence on that

47:30

particular question. I've no reporting to

47:32

back this stuff. It's just anecdotal.

47:34

But I think about myself, I

47:37

think about my other friends, I

47:39

think about even younger people. How

47:42

game do you think they will be to

47:44

play Call of Duty on an iPad?

47:46

Like, that just doesn't... That's just

47:48

does something that just like this

47:50

doesn't feel right, you know, yeah, I think

47:53

that's fair and I think we do have

47:55

some evidence that the idea of bringing

47:57

higher-end games to mobile devices

47:59

in particular is not as earth shatteringly

48:01

compelling as we'd want it to be. Like

48:04

Apple has been on this grind for years

48:06

now. They're like, please, dear God, bring your

48:08

last generation AAA game to the Mac and

48:10

the iPhone. And overwhelmingly, it seems like the

48:13

response from people is like, sure, fine. Like

48:15

I have other games to play on my

48:17

iPhone that actually make a lot more sense

48:20

to play on my iPhone. And it doesn't

48:22

seem like there is a huge... market for

48:24

that that that no one is currently serving.

48:26

But I kind of hope we solve the

48:29

tech problems just because then we'll actually get

48:31

to find out and I think it's gonna

48:33

be interesting. Yes, that would be fun. But

48:35

okay, let me just very briefly defend Microsoft

48:38

here and I would like to make the

48:40

case to you very quickly that all of

48:42

this is about to pay off and Microsoft

48:45

is going to be a huge success in

48:47

the immediate future. You ready for this? Okay.

48:49

I can almost do it. Almost.

48:51

I'm going to try. All right. So,

48:54

okay, there are a bunch of things

48:56

going on simultaneously. One, Sony has increasingly

48:58

tried to do its own online stuff

49:00

with PS Plus, and that has gone

49:03

badly, I would say. Sony is not

49:05

great at cloud gaming, has pulled some

49:07

of its games from its own service.

49:09

There is just not a lot of

49:12

particularly great game streaming competition out there

49:14

right now. doing its thing because in

49:16

video has so much money they can

49:18

do whatever they want but like game

49:20

pass if this thing is going to

49:23

work it's probably going to be game

49:25

pass seems to be the case right

49:27

now at the same time game pass

49:29

just set a new quarterly record in

49:32

revenue for Microsoft I would call that

49:34

a small win but a win nonetheless

49:36

it has a pretty good release slate

49:38

this year of games Microsoft's multi-platform thing

49:41

is kind of working right like it's

49:43

it's putting games on other platforms it's

49:45

selling stuff on PlayStation's it is becoming

49:47

a hugely successful game publisher it was

49:50

I think it was last year that

49:52

it was the maybe in December I

49:54

think it was that it was the

49:56

leading game publisher worldwide. And most of

49:58

that is call of duty. Like, again,

50:01

you launch a call of duty. A

50:03

lot of people buy and play call

50:05

of duty. It's the easiest win in

50:07

gaming. But you put all of that

50:10

together and it's like, okay, maybe this

50:12

transition Microsoft is making away from being

50:14

a company that sells you game consoles

50:16

to being a company that wins whenever

50:19

you play games that it makes, whether

50:21

it's on game pass or on a

50:23

PlayStation or whatever. Maybe that's working. Maybe

50:25

that's what Microsoft wants. And I think

50:27

there's a world in which that completely

50:30

obliterates what an Xbox means to people.

50:32

But maybe that's what Microsoft is going

50:34

for and maybe it's headed in that

50:36

direction. Is that possible? Oh, absolutely. I

50:39

still think that, yes, Phil Spencer will

50:41

continue to make Xbox for the foreseeable

50:43

future. They're not going to go full

50:45

Sega, but they're going to go like

50:48

transition to mostly Sega. And Sega's been

50:50

fine. So there are worse fates in

50:52

the worst fates in the world. you

50:54

know? There are, but I think if

50:57

you told Phil Spencer that Sega was

50:59

his fate, I think Phil Spencer would

51:01

not have his job much longer. Well,

51:03

because Sega never reached those quite those

51:05

heights that they had, you know, prior

51:08

to what they did, but you want

51:10

that number for Microsoft and Xbox to

51:12

continually go up and up in big

51:14

ways. That's I think the main rub

51:17

of all of this is that we

51:19

have to temper our expectations just a

51:21

little bit better Can we please be

51:23

content with like single-digit growth or like

51:26

even holding steady like no growth? Like

51:28

if we could do that then I

51:30

think we would be in a much

51:32

healthier position to you know Except when

51:34

big swings fail and when you get

51:37

minor wins because despite the fact that

51:39

you know Xbox shut down arcane and

51:41

got rid of tango game works like

51:43

those games that they made right before

51:46

they got jettisoned were decent games that

51:48

were you know weren't like big sellers

51:50

but they were still good and they

51:52

were still profitable and And still, it

51:55

wasn't enough. So if we can just

51:57

bring that ceiling down a little bit,

51:59

if everybody across the board was like,

52:01

okay, okay, all right, we'll calm down,

52:03

we don't need to extract this much

52:06

profit out of you, I think we'd

52:08

be in a much better position. And

52:10

we wouldn't have to have these kinds

52:12

of doom and gloom conversations. Is there

52:15

also a part of this that is

52:17

going to be the game makers and

52:19

the game developers themselves adapting to new

52:21

ways of thinking about thinking about this

52:24

run? of huge live service games that

52:26

were going to take over the world

52:28

and be everything to everybody. And they

52:30

mostly failed and they killed a lot

52:33

of companies in the process because they

52:35

were so expensive in such disasters. Are

52:37

we do for a swing the other

52:39

way? Where it's like, okay, what we

52:41

actually need is a run of like

52:44

smaller, simpler, cheaper, shorter games that people

52:46

can log on and play for 30

52:48

minutes at a time that feel different.

52:50

Can we get there? necessarily within the

52:53

big publishers, but people are increasingly turning

52:55

to Indies and like smaller games. Astrobot

52:57

is a bad example because that was

52:59

published by Sony and made by Tima

53:02

Sobey, but it's still an exemplary of

53:04

the kind of game that are resonating

53:06

with people right now. Like smaller, really

53:08

tailored experiences that you can consume in

53:10

like a couple of gaming sessions. I

53:13

think Astrobot was maybe 20 hours long.

53:15

Then there's Bolato. Good God. The game

53:17

that has changed and ruined my life

53:19

simultaneously. Exactly. Like there, people are kind

53:22

of burnt out. they are reaching for

53:24

those smaller experiences which you know Indies

53:26

are more than delightful to provide to

53:28

like fill in the gap because you

53:31

know the big companies fired everybody and

53:33

now they're having a hard time putting

53:35

out games a couple years later who

53:37

to thunk so you know Indies are

53:40

going to our position to have their

53:42

moment right now and by the time

53:44

the big companies like turn around and

53:46

take notice and start pushing things out

53:48

that are going to appeal to you

53:51

know the audience that are are looking

53:53

for those games now, it might be

53:55

too late and we're going to be

53:57

on the next thing, whatever that is.

54:00

But that strikes me as potentially a

54:02

perfect formula for something like the Netflix

54:04

of games, whether it's game pass or

54:06

something else, to work. Because what you

54:09

say is instead of having a million

54:11

indie games that are struggling to find

54:13

people, we're going to have one price

54:15

for all these games we're going to

54:17

work on discovery, which is obviously like

54:20

the thing Netflix is so good at

54:22

is it can just shove anything in

54:24

front of its audience and make it

54:26

a hit. And instead, I now as

54:29

a user have access to a bunch

54:31

of games I never even would have

54:33

found before in one sort of manageable

54:35

place. Like, is that, could we get

54:38

there? I hope you're right, because Steam

54:40

has been struggling with that problem for

54:42

far longer, and they seem to be

54:44

okay, but yeah, there are too many

54:47

games like it or not, and yes,

54:49

there is a game for everybody, and

54:51

every game has an audience, but ooh.

54:53

Steam haven't figured that shit out. I

54:55

don't know how Microsoft will. I'm sorry.

54:58

I guess the thing that I would

55:00

say is like, you know, developers, people

55:02

who make games, have an idea of

55:04

who your audience is and where they

55:07

are and go target them aggressively. And

55:09

hope word of mouth will be enough.

55:11

All of this might lead you to

55:13

believe that we're nearing the end of

55:16

the Xbox as we know it, that

55:18

Microsoft could really move fully beyond the

55:20

console, and that that might be a

55:22

good thing, at least for its business.

55:24

But we're probably not there yet. Last

55:27

week, my colleague Tom Warren wrote a

55:29

piece as part of his excellent notepad

55:31

newsletter, subscribe on the verge.com, about the

55:33

next-gen Xbox. It is already in the

55:36

works. But it might look a lot

55:38

different than what we're accustomed to. He

55:40

reported that in many ways this new

55:42

device might bridge Xbox and Windows in

55:45

ways that we've never seen before. A

55:47

big part of this is also a

55:49

handheld reportedly in the works. You can

55:51

imagine that Microsoft has been watching and

55:53

is very interested in the success of

55:56

the switch, but also the steam deck

55:58

and its many Windows-powered handheld gaming clones.

56:00

So maybe there isn't an all-new Xbox

56:02

per se, but a whole new family

56:05

of devices. They're all Xboxes. Remember, everything

56:07

is an Xbox, as long as it

56:09

has game pass. But even that still

56:11

feels like it would be kind of

56:14

a defeat for Microsoft, or at the

56:16

very least, the end of an era

56:18

for console gaming. And it might be

56:20

an era we miss when it's fully

56:23

gone. the point where the end of

56:25

the Xbox as a sort of mainstream

56:27

home console, would we mourn the end

56:29

of that or has this been a

56:31

long time coming? I think well mourn

56:34

the end of that. I've never been

56:36

an Xbox girly. I enjoy their games,

56:38

shout out to Halo, but it's still

56:40

such a force. It still has a

56:43

place. and it will still exist. But

56:45

yeah, it's worth mourning because, you know,

56:47

this was one of the three major

56:49

pillars in the gaming industry. Like, even

56:52

if, you know, it had been on

56:54

the decline for some time, when it

56:56

goes away, it's still going to leave

56:58

a massive, you know, hole that it

57:00

will fill in different ways. But, you

57:03

know, what we knew ceases to be,

57:05

and that's always, you know, a bittersweet

57:07

thing. Ash, thank you for coming on

57:09

Decoder. It was very fun to do

57:12

this with you. Yeah, it was fun.

57:14

Make sure you call me back whenever

57:16

GTA-6 releases. Someday in the future. Thank

57:18

you again to Ash Parish for joining

57:21

me on the show, and thank you

57:23

for listening. I hope you enjoyed it.

57:25

It is always fun to be here

57:27

on Decoder doing this with all of

57:30

you. If you have thoughts about this

57:32

episode or anything you'd like to hear

57:34

more of from us, you can email.

57:36

You'd like to hear more. or hit

57:38

up Neelai directly on threads or Blue

57:41

Sky. He's at Reckless 1280. Hit him

57:43

up while he's on vacation. He says

57:45

he's not checking, but he's checking. We

57:47

also have a TikTok while TikTok still

57:50

exists. And now we have an Instagram

57:52

too. You can check them both out

57:54

at Deco. There are a lot of

57:56

fun, all kinds of good stuff there.

57:59

If you like Decoder, please share it

58:01

with your friends and subscribe wherever you

58:03

get your podcasts. Decoder is a production

58:05

of The Virgin and is part of

58:07

the Vox Media Podcast Network. Our producers

58:10

are Kate Cox and Nick Stat and

58:12

our editor is Ursa Wright. The Decoder

58:14

music is by Break Master Cylinder. See

58:16

you next time. Today

58:24

at T-Mobile I'm joined by a

58:26

special co-anchor. What up everybody? It's

58:28

your boy, Big Snope deal, double

58:30

sheet. Snoop! Where can people go

58:33

to find great deals? Hand to

58:35

t-mobile.com to get four iPhone six

58:37

teams with Apple intelligence on us.

58:39

Plus four lines plus four lines

58:42

for Apple intelligence on us. Plus

58:44

four lines for 25. That's four

58:46

lines for Apple intelligence, with Apple

58:48

Intelligence, with Apple intelligence,

58:50

requires IOS-18 point one

58:53

or later. museum

59:23

of brutality revealing the darker side

59:25

of Gagga's mayhem. Listen to these

59:28

live moments on Switched on Pop,

59:30

wherever you get podcasts. Brought to

59:32

you by Defender. This week on

59:34

Unexplainable and Explain it to me,

59:37

we're unraveling the mysteries of sleep.

59:39

On Unexplainable, why do we twitch

59:42

in our sleep? Neuroscientist Mark Blumberg

59:44

explains how small involuntary

59:46

involuntary movements... might be

59:48

shifting our understanding of

59:50

the brain and the body.

59:53

And on Explain it to me,

59:55

we're answering some big sleep questions,

59:57

yours and ours. Why do some

59:59

people... suffer from sleep paralysis? Is

1:00:01

it better to be a night owl

1:00:03

or an early bird? And seriously, are

1:00:06

naps actually good for you? Find out

1:00:08

what's keeping you up at night in

1:00:10

our cross-show Deep Dive, a special series

1:00:12

on the Science of Sleep presented by

1:00:14

Natrol. You can find it wherever you

1:00:17

get your podcasts.