Phil Spencer once again makes the case that mobile is the reason Microsoft decided to acquire Activision Blizzard King.
In an interview with the Second Request Podcast, Phil traces the thread of thought that led Microsoft to this conclusion. I have a feeling not everyone will agree with how they got there, but it’s interesting to see their logic nonetheless.
If Phil is to be believed, Microsoft sees mobile as a service concern, not for themselves or even for gamers, but for creators. Phil’s point of view is to attract the best game developers to build for Xbox, Team Xbox, in turn has to provide the best platform possible for those games.
And as successful as Windows and Xbox consoles have been as platforms for Microsoft, they are still completely irrelevant on the largest platform out there. And they cannot stay out of mobile forever.
As Phil puts it:
“Mobile is the largest segment in gaming. It’s the fastest growing segment in gaming, and the largest franchises that people are playing, more and more are available on phone. Not necessarily on phone exclusively, but they are available on phone.”
Phil also talks about it on the distribution angle. Microsoft is actively thinking of ways to include mobile phones as one of the distribution platforms they can deliver Xbox games on.
Of course, as of right now, it is possible to play Xbox games on mobile, but only via Game Pass, and without games that were made specifically for mobile platforms. So Xbox is missing out on those kinds of mobile game developers.
Now, Phil points out that the duopoly Apple and Google have over mobile stores means they won’t just be able to put up an Xbox store for phones.
Their strategy, then, is to find content they will publish, that the mobile game audience wants. After they make that connection with that audience, Microsoft can then engage with that audience and get them to play more of their games.
To conclude, Activision Blizzard King’s games were precisely that kind of content that Microsoft was looking for. Games like Call of Duty Mobile and Diablo Immortal are proving successful on a financial level, and also in gaining interest among mobile gamers for those respective IPs and brands.
It’s interesting that Phil is making this argument because it’s very similar to Nintendo’s reasoning for their own mobile games initiative. That push for mobile games seems to have petered down in that company, as they have moved on to new business ventures like theme parks and movies.
Also, Phil’s talking point about the mobile duopoly may have been rendered obsolete by the EU’s Digital Markets act, which will force Apple to open up their devices to third party stores and sideloading.
These probably won’t dissuade Microsoft from pushing through with the deal. It might change the context of their acquisition, and with that, how they move forward with their mobile initiative and their use of Activision Blizzard King’s properties.
You can read Phil’s full comments below.
“We look at the largest gaming companies in the planet. The largest gaming company is Tencent. And Tencent has a strong mobile presence. And you see mobile is the largest category of gaming out there.
Three billion people play video games. Mobile phones are the most prolific consumer electronic device on the planet that plays games. And in many places, you’re going to have to reach customers with devices that are already in their pocket.
Most families on the planet won’t go out and spend specific money to buy a bespoke gaming device. So when you think about the world’s largest franchises, those will exist on mobile. They’re going to have to over time. You’re going to have to find some way for everyone in the planet to play those games. Just like you’ve seen for music and video, where all of the services are available on the devices people want to play on.
Mobile is the largest segment in gaming. It’s the fastest growing segment in gaming, and the largest franchises that people are playing, more and more are available on phone. Not necessarily on phone exclusively, but they are available on phone.
So when we are thinking about being a platform for creators, if somebody says I’m gonna go build a game on Xbox, we want to make sure that we can offer to that creator the largest set of players possible for their game. Some of that is through the business models. We have talked about ensuring that we’ve got different flexible business models for customers, so that they can get to the right piece of content the right way, that makes financial sense for the creator.
Distribution is another way. How do we distribute the games to different devices? What’s the kind of technology mechanism behind that? And then when we think about mobile, we’re going to find a way to allow people who are creating Xbox games, to see that players with mobile phones on the planet are part of the audience that they can reach.
So for us, when we look at what we’re capable of today, and where people engage with Xbox. Most people who engage with Xbox engage on console. We have a growing presence on Windows. That’s growing, and we’re investing there, and Gamepass, our subscription is available there.
But the place where we’re completely irrelevant is on the largest platform, mobile. So, we looked at the opportunities out there, we said, well, we’re not going to be able to create a platform component. Because the two platform holders, the duopoly as you said, won’t allow us to put an Xbox, with Game Pass and everything that’s there, on those devices. They literally block it.
So the only other option for us today is to find content that players on mobile phones love, that they will go play, so that we can start to build a foothold with players on mobile. Then we can look to increase discoverability and business model and distribution for games through the engagement that we have on mobile devices.
And that’s what led to this, looking at Activision Blizzard King. Looking at the strength that they have built with King, with Call of Duty mobile, with Diablo Immortal, which is growing. They’ve done a very good job of finding more and more customers on mobile, which made it an attractive partnership for us. “
Source: Second Request Podcast
