Hello,
Welcome back to another edition of The Game Business Micro.
Things are a lot busier this week, and one company that made a lot of noise (and is starting to dominate our Micros a bit) is Xbox, which detailed the beginnings of a strategy in a memo to staff this week, alongside making changes to its Game Pass offering.
Elsewhere, Circana reveals some pretty good US sales figures and the Warner Bros and Paramount deal overcomes its first hurdle.
And a reminder to all paid subscribers to The Game Business: You can come to our Live event as part of your subscription. The event will feature on-stage interviews with EA’s Laura Miele, games legend Jason Rubin and leading analyst Matthew Ball. But you do have to register. You can’t just turn up with a subscription, because we won’t have the room. You can sign-up below.
Let’s go.
Xbox charms fans and shows its thinking
In Brief: Microsoft Gaming will now be called Xbox going forward. The company has set ‘daily active players’ as its ‘new North Star’. In addition, it’s set out its ambitions around hardware, content, experience and services.
The firm’s Asha Sharma and Mat Booty wrote in a memo: “Xbox will be where the world plays and creates. We will build a global platform that connects players and creators everywhere. Console is at the foundation, delivering a premium experience, and cloud brings that experience to any device. You can play where you want, and your games, progress, friends, and identity stay with you across console, PC, mobile, and cloud.
“Xbox will be built to be affordable, personal, and open. We will offer flexible pricing so it’s easy to get started and keep playing. The experience will adapt to you, letting you customize how you play, helping you find what you’ll love, and connecting you with the right people. And we will be open to all creators, from individuals to the largest studios, giving anyone the tools to reach a global audience and keep their games growing over time.”
What You Need To Know:
Microsoft Gaming was established in January 2022 following the acquisition of Activision Blizzard.
In the memo, Xbox admitted that players are frustrated, its PC presence isn’t strong enough, pricing is hard for people to keep up with, and search, discovery and social have become too fragmented.
It also said that a new generation of players are coming online with different expectations, and that half of the game industry’s revenue is outside of Xbox’s core Western markets.
In terms of hardware, it wants to stabilize its current generation of consoles, deliver Project Helix as a device that plays PC and console games, and lead in high-performance accessories.
In terms of content, it will grow its popular brands, evolve third-party partnerships, expand into China and other mobile-first markets, maintain and grow its live games, and boost ‘creator-centric platforms’ such as Minecraft, Elder Scrolls and Sea of Thieves (I’ve asked what they mean by ‘creator centric platforms’).
In terms of experiences, the company wants to make Xbox the best place for developers to make games, and will overhaul discovery, customization, social and personalization.
And in terms of services, it will fortify Game Pass with ‘clear differentiation’ and make cloud play ‘feel native, fast and reliable’. It may use M&A to accelerate slow growth areas in the services segment.
Xbox also said it will re-evaluate its approach to “exclusivity, windowing, and AI”, which is generating lots of conversation online.
Earlier in the week, Xbox reduced the price of the Game Pass Ultimate subscription service by over 23%, going from $29.99 to $22.99 a month. It also reduced PC Game Pass from $16.49 to $13.99 a month. As a result, future Call of Duty games won’t be included in either service when they launch, and will now arrive in the service around a year later.
My Take:
I heard a great analogy about Xbox’s PR strategy over the last two months.
It came from VGC’s Andy Robinson. He said that if he was to take over West Ham (his football team), the first thing he’d do is change the club’s logo back to the old one. It’s a cheap, quick, easy thing to do that will immediately get the fans on side.
That’s what Xbox is doing. It dropped the ‘This Is An Xbox’ marketing slogan, which fans hated, and replaced it with ‘the return of Xbox’, which they loved. Now, the division has rebranded itself from Microsoft Gaming to Xbox.
Those are just words. It is PR to delight the core base. Nobody called it Microsoft Gaming anyway, just as nobody calls PlayStation: Sony Interactive Entertainment. But it’s certainly been effective PR.
