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It’s my great pleasure to be joined by head of Xbox Phil Spencer Phil’s thank you so much for taking time out of your busy schedule to speak to us.
You’re on the eve of announce our rivia launching two new consoles.
Incredible.
Xbox and Xbox series S. It’s been an interesting time in the industry.
And I’d love to get your take on how you’ve seen the industry change amidst the current conditions were obviously in a pandemic and you have a keen eye on businesses and consoles around that.
So what have you seen happening?
Yeah, it’s been interesting, I’d say over the gaming has been a growing business for decades now.
But really what we’ve seen during the COVID crisis is a real acceleration in engagement and monetization in our business.
Now, those of us in the industry will say this has been a trend that’s been happening all along and we’ve just it has been just Acceleration.
I think it’s beholden on us as an industry to retain that engagement.
So many families have found gaming as an important way to connect with friends and family and as the touch wood, as we get past the COVID crisis, it’ll be interesting to see how gaming the resilience in it, but it’s been a growing business for many years and I suspect And we’ll continue to do so.
Right.
So in terms of you mentioned there is growing what has what do you think the impact on Xbox has been specifically?
Do you see it kind of leaning in certain ways?
Or are they buying more consoles?
Or do you see a spike in certain types of games that are doing well?
It’s really been across the board from if I focus here in the US specifically just on our timelines, of when the Shutdown happened.
And then we saw like the first round of stimulus checks, they hit many families, we effectively sold out of hardware.
During that time, it was almost impossible to find a console and hardware timelines are aren’t the smallest shortest.
So it took us a while to get caught back up and even now, I think you see hardware In limited supply from the past Gen will definitely be true in the next generation as well.
Overall engagement we’re just seeing record levels of engagement meaning people playing every day, playing online connecting with friends and family and the spend it has followed that in terms of trends and types of games.
I think you see social games.
Doing really well we’ve seen things like fall guys and among us as an industry pick up and I think you see some traditional games like destiny and Call of Duty and Halo and stuff.
Minecraft getting big engagement as well.
I think it’s just a new way for people to connect It’s kind of, it’s one of those weird situations where certain people, certain companies they’re in a position to just really make the most of what they do in amidst this pandemic, which can be a weird feeling.
But like you guys have game pass, which is just An incredible value.
And now you’re about to launch a new generation of consoles and it just so happens that you have a very powerful but cheap console available.
Do you think about like the fortuity of that and you know, having having these this such a low barrier of entry to gaming and how it fits into this pandemic situation where if anyone wants to get into games now The obvious and smart recommendation is you buy a series S and then you get game pass.
But I appreciate you saying that.
Yeah, our planning has always been about putting the player at the center of our decisions and expanding, making gaming more Accessible to more people.
And obviously, as you’re talking about, there’s a real focus on that right now with the economic uncertainty people are dealing with and as we said, gaming’s real rise and engagement.
So when I think about things like game pass, I think it is a real differentiator for our platform, Xbox series s at its price point 299 in the US and even programs like Xbox, all access That allows somebody to get game pass and the console for a low monthly fee.
Those are all goals for us inside of team Xbox to find more gamers, and make gaming more available to more people.
And that’s something that’s just driven us for many years now.
All right.
so you mentioned earlier retention.
What do you think, what are you guys doing?
What is X-Box doing to kind of ensure that the new influx of people playing games kind of sticks about?
Yeah.
The first and foremost is obviously safety, and security of people playing online and making sure they’re having a great experience as new players are coming on and we’ve done things around.
Sign up and set up and made it much easier for new people who maybe haven’t been with us in previous generations to feel comfortable on our console and that’s been important to us.
You mentioned game pass and game pass has been away for we make it very easy for people to find new games.
And if you’re kind of outside of the gaming bubble, there’s probably three or four gaming franchises you’ve heard of.
But as you and I know there are hundreds of gaming games out there for people of all who want to play all kinds of games.
So making discovery of new content, easy, making sure there’s diverse content on our platform, and that the right content is finding the right customers.
I’m interested in your take in whenever Every now and then we get these like companies or like media outlets that do like games are really cool kind of feature.
And, and, and it’s always like people on our side going Yes, we know but you keep doing this you have this cycle you come back and you’re like your games are cool and now we have We have this situation where it’s so many people are playing games, and it feels like it.
People are starting to get it.
Do you feel that as well?
Like, do you feel like the world now has an a real meaningful understanding of the value of games because of the situation we’re in?
I think it’s a couple things I think the situation we’re in has accelerated, no doubt.
I think it’s some of it’s just the aging demographic of the planet as well.
And I like to tout these numbers.
There’s 7 billion people on the planet and there’s 3 billion people who play video games.
It’s almost half of the world plays video games on some device.
That’s a massive, massive both business and just art form and engagement.
And I will spend some time even in places like Washington DC talking to Congress, people about gaming and more and more on finding people in elected office and heads of businesses that actually play and I know when I started in this business 20 plus years ago It wasn’t that way gaming was kind of a thing off to the side that people looked at, as you said, and maybe talked about every so often, not always in the best context, and then would come back to their normal lives.
And I think more and more now, as you’re seeing the aging demographic, I mean, our first Xbox launched in 2001.
And how many of those people who found gaming on the first Xbox now have their own family and introduce gaming to the next next generation and I think that’s just a special things about games as the role it’s played in people’s lives.
I think the one thing that I’ve found particularly well there’s like how is crossover with so many different kinds of conversation?
Obviously, we live in a Political world we just had a big political moment and in the lead up, I found that a lot of the people that I watched on Twitch and and on different other streaming platforms were kind of cross-discipline like Someone Like for example, Hassan Pica who does very much political stuff, but is a gamer and a streamer as well.
And then that led to Pokemon and AOC and all these other kind of Important gaming fingers crossing over with politics and that seems to be a really interesting cross section and meeting of worlds.
What’s it been for you does that like open new doors in your mind for gaming and potential for that?
It definitely does for us as people in the industry and the creations that we have in the games themselves Playing a game has a unique ability to give me empathy and connection to people in a different circumstance than my own.
And I think with that power us as an industry, we should think about how we use that with that, that influence that we can have those platforms for creativity, I think it’s more important than ever.
That we have a diversity of people creating games so that different perspectives show up in the games that are created.
And then as you talk about for us that are either spokespeople, or some of the media people are the streamers and creators in our platform.
They’re now being asked things that are beyond just hey, what game are you playing now?
And how do you feel About certain topics and I think that’s, you’ve seen it in sports.
You’ve seen it in so many different places as those personalities and those leaders have to find their voice on different topics and that will take time.
But I think it’s just it’s a real strength of what we have and that we have an interactive art form.
They can actually tell different stories through the eyes of different people.
And I think that’s just something that’s very, very unique to gaming and that we should harness.
For sure.
Where do you see the gaming audience Two or three years from now when, hopefully, the corona pandemic is a distant memory.
[LAUGH] I think the growth that we’ve seen in the last, call it, six months is something that will persist and will continue to grow.
I think we’ve accelerated a natural transition.
Like, we see it on our platform of people using other non-interactive media to entertain themselves, to gaming.
And I think that’s going to continue when you talk about over the next few years, more and more, we’re seeing the trend that the player is actually the one that’s in control of the experience that they have.
If you go back 10, 20 years, you had a different closed ecosystems.
They didn’t really interact with each other, you had to make these almost tribal decisions about whether I’m a member of one or a member of the other.
And some of that still persists in our industry.
But more and more now people just play the games that they want to play on the devices that they want to play that line.
You take a game like fortnight or Minecraft, what platform do those games are they on there on all the platforms and where can you play with your friends wherever you want to play with them and And I think more and more games are gonna be embracing that you see it every year more and more games supporting cross play and cross entitlement.
And it really becomes me as a player.
I just wanna play the games that I wanna play with the people that I wanna play them with.
And I think that’ll that trend is going to continue and I think is a real catalyst for our industry’s growth.
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