Phil Spencer says the Xbox business will become “unacceptable” if it remains “irrelevant” on mobile | VGC

Xbox Game Studios (Microsoft) [2,300 articles]”href=””> Microsoft’s Chief Game Officer stated that Xbox [6,027 articles]href=””>Xbox will struggle to survive as a global company if the company does not establish a foothold in mobile.

While the company proposed the acquisition of Activision Blizzard [1,169 articles]href=””> Activision Blizzard is often framed as the Xbox maker seeking to buy Call of Duty, Phil Spencer [492 articles]href=””> Phil Spencer reiterated earlier claims that the $68.7 billion deal was primarily driven by Microsoft’s mobile gaming ambitions.

The idea that Activision [1,021 articles]href=””>Activision is all about Call of Duty on console, a build that might be built by our console competitor,” Unpacked podcast Encoder (copied by VGC).

While Sony Interactive Entertainment is not named [2,660 articles]href=””>Sony directly, the Xbox chief went on to point out concerns that the PlayStation maker has made to competition regulators who are currently examining the transaction.

“I could not hear [that] Nintendo [3,150 articles]Spencer noted that “href=””>Nintendo has been filing any complaints about the deal.

Candy Crush Saga – First level ever

Over the past five or six years, he said, all of the growth in the $200 billion global gaming business has come from the mobile segment, while console and PC revenues have remained “relatively flat.”

Asked about a recent comment Microsoft made to an organizer about being a bit of a PC and mobile gamer, Spencer said, “I don’t think anyone needs that quote from us to understand how out of touch we are with mobile. Anyone who picks up their phone and decides to play a game is going to see that on their own.”

And the PC too, our trials and tribulations over the last five or six years in the PC [6,554 articles]href=””>PC games are well documented we keep working on it I love the work the Xbox app team has been doing our PC studio is doing a great job on the computer, but it takes time.

He added, “In terms of the Activision opportunity, and I keep saying this over and over again, and it’s true, it definitely starts to see that people want to play games on every device they have, and in a funny way, the smallest screen we play on is actually the biggest screen when you think about the installed base in the phone.

“This is just a place where if we don’t gain relevance as a gaming brand — we’re not alone in seeing that — over time, the business becomes kind of unacceptable to any of us. If we can’t find customers on phones, on whatever screen someone wants to play on You’ll really be cut into a niche part of the games which will make running a global corporation very difficult.”

Added Spencer: “As a percentage of the total gaming business, the console business is shrinking, because the overall business is growing and the console remains relatively flat as a business, and same with PC.

And then when you look at the biggest game companies out there, Tencent [194 articles]”href=””> Tencent is the largest game company in the world and a lot of their profits come from mobile, and then they put their business success as much as they got it through the work they did in market and acquiring other studios at a very fast rate.

Says Activision Blizzard Call of Duty: Mobile [116 articles]href=””> Call of Duty Mobile has been downloaded over 650 million times

“It puts a lot of us in a niche that’s probably traditionally fragmented into one screen and one device, in a position of, well, if you play this over 10 years, if the same console isn’t going to grow, and the PC is going to grow in certain years and not [other] Years, and mobile continues to grow, how do you continue to run the business and stay competitive with others that are out there either acquiring talent, building new business models, new distribution, building new franchises?

“It’s critical that if you’re trying to run a global gaming business at scale, that you meet your customers where they want to play, and more than that, that mobile is where people want to play.”

Activision Blizzard said last week that its monthly active user base was 368 million for the quarter ending September 2022. Maker of Candy Crush King has accounted for 240 million players, World of Warcraft [118 articles]href=””>World of Warcraft and Diablo studio Blizzard Entertainment [297 articles]href=””> Blizzard for 31 million and Call of Duty publisher Activision for 97 million.

King has more players than other Activision Blizzard divisions combined and generates more revenue as well. So, put to Spencer, Microsoft is actually buying Candy Crush instead of the Call of Duty one.

He replied, “Sure.” Additionally, the number not in the Candy Crush King number is Call of Duty Mobile and Diablo mobile, two big franchises that are in Activision’s bucket and in Blizzard’s bucket, and they’re also major players on phones.

The proposed $68.7 billion acquisition of Activision Blizzard would be the games industry’s biggest deal ever, comfortably surpassing the record $12.7 billion Take-Two and Zynga merger that was finalized earlier this year.

That deal brought in Take-Two Interactive [562 articles]href=””>Take-Two’s blockbuster console and PC franchises such as Grand Theft Auto and Borderlands (series) [122 articles]href=””>Borderlands, NBA 2K Games [370 articles]href=””>2K and BioShock under one roof as popular Zynga social mobile game brands like FarmVille and Words With Friends .

Phil Spencer says the Xbox business will become

“If you look at the totality of what Activision Blizzard King does, where their customers come from, where they make money from … it’s the same reason Take-Two looked at Zynga and said we had to build out our mobile capability,” said Spencer.

“I would say Activision Blizzard King did a better job of doing that earlier, certainly better than we did, and they’re now in a position where they have great PC franchises, great console franchises and great mobile. For us, the real differentiation they add is Elena is their ability to mobile.”

Microsoft recently outlined plans to create a “next-generation game store” to compete with Apple and Google, aided by its acquisition of Activision Blizzard.

Building on Activision Blizzard’s existing communities of players, Xbox will seek to expand the Xbox Store to mobile devices, and attract players to a new Xbox Mobile. [625 articles]href=””>Mobile Platform,”

Shifting consumers away from Google [283 articles]”href=””>However, the Google Play Store and the mobile App Store will require a significant shift in consumer behavior.Microsoft hopes that by offering popular content, gamers will be More inclined to try something new.

During the same interview with The Verge, Spencer said he’s open to committing to Sony and regulators that Call of Duty will remain on PlayStation on a longer-term basis than is currently agreed upon.