Axios Gaming

February 03, 2022
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Today’s newsletter is 1,297u words, 5 minutes.
1 big interview: Phil Spencer's highs and lows
Photo illustration: Shoshana Gordon/Axios. Photos courtesy of Microsoft, Xbox
Microsoft gaming CEO Phil Spencer's upcoming lifetime achievement award from the Academy of Interactive Arts & Sciences this month has given the newsworthy executive cause to reflect.
Why it matters: As head of Xbox since 2014, Spencer is already one of the most influential and powerful people in gaming, but he is at a pivotal point both in his career and the industry at large.
- There’s Microsoft’s $69 billion bid to buy the massive but scandal-ridden Activision Blizzard.
- And there’s something subtler: the executive’s apparent efforts to recognize his privilege and extend support to those who didn’t have his advantages.
When asked by Axios to describe his biggest career achievement, he stumbles into an answer he suggests will sound cheesy: “Just being part of a great team, a great community and building stuff together.”
- But looking back, riffing that he’s never had to interview for a job, he reframes his own start: “That happens because I'm in a certain strata,” he says. Right place. Around the right people. “It's definitely not all my capability.”
Much of his journey is known and celebrated:
- Joins Microsoft as an intern in 1988, joins Xbox in 2001, takes it over in 2014 after the disastrous Xbox One launch.
- Oversees a player-friendly rehab of the division, expanding access to older games, releasing the Xbox Adaptive Controller for players with physical disabilities and the pioneering Game Pass subscription service.
- Convinces his bosses to greenlight multi-billion-dollar purchases of Minecraft and Zenimax/Bethesda.
But there are also problems, ones that cut deeper than the flop of a game or console:
- A 2016 Xbox industry party featuring scantily clad dancers prompted an apology from Spencer about his division’s own shortcomings in Xbox’s very public pursuit of a more inclusive culture.
- And in 2019, women in Microsoft, including its Xbox division, confront the company about sexist comments and mistreatment.
- Spencer tells Axios the moment was “painful.” He recalls sitting in a conference room with women who tearfully described their experiences at Xbox and “feeling the emotion, the anger, the disappointment.”
“I think it brought up a conversation that we should be having more often just around if people feel that they have a fair opportunity to work. Are they in an environment where they can do their best work?”
The bottom line: “I've never felt like I'm the smartest person in the room or I've got the best education,” Spencer said. “It's really come from opportunities that others have afforded me and just recognizing and seeing and then making things possible.
- "So when I'm thinking through any scenario, I try to think through if I were on the other side of something: what would I be grateful for?”
Go deeper: What makes Microsoft gaming chief Phil Spencer tick
2. Switch tops Wii
The Wii showcased in 2006. Photo: Bob Riha Jr./FilmMagic
Nintendo has now sold 103.5 million Switches, surpassing the 101.6 million sales performance of its legendary Wii console, the company announced overnight.
Why it matters: The show of strength signals just how much life is in Nintendo’s nearly 5-year-old platform, as it picked up about a fifth of those sales last year.
- The comparison isn’t quite apples-to-apples.
- The Wii was a home console, and the vast majority of owners only bought it once. The Switch, which can be played at home or on the go, has had multiple models and therefore many more repeat buyers.
Between the lines: Nintendo Switch’s more impressive stats may be how well its games sell.
- The company says 13 games on the system have passed 10 million units.
- Even 2021 Switch releases in series that don’t sell as broadly for Nintendo sold well — for example, Metroid Dread reached 2.4 million units sold.
Yes, but: Nintendo, like rival Sony, has had to downgrade forecasts for hardware sales, citing semiconductor shortages.
- The company said it expects to sell 23 million Switches for the 12 months ending March 31, 2022, down from 24 million.
The intrigue: In a Q&A with investors, Nintendo executives downplayed the NFTs and the metaverse.
- In remarks clarified to Axios by analyst David Gibson, they said they were interested in the metaverse but were unsure what kind of “joy” it could provide.
- CEO Shuntaro Furukawa also downplayed the likelihood that Nintendo would join the industry's ongoing M&A spree, according to Bloomberg, saying "having a large number of people who don’t possess Nintendo DNA in our group would not be a plus to the company."
3. GameStop’s NFT push
GameStop is creating an NFT marketplace and setting up a fund of “up to $100 million,” in partnership with blockchain company Immutable, in an effort to attract game developers to sell NFT-based items through the service.
Why it matters: GameStop, which still doesn’t have a clear path to success, has been teasing an NFT play for some time.
- But backlash against NFT projects launched by traditional gaming companies has been severe, prompting some to backtrack.
- GameStop and Immutable hope that some developers will hop in regardless.
What they’re saying: Immutable is promising a “carbon neutral” approach but acknowledged gamers are skeptical of all of this NFT stuff.
- “The best thing to do is to create truly player-first gaming experiences that embrace the benefits, rather than the hype, of NFTs,” Immutable co-founder Robbie Ferguson told Axios.
- “Gods Unchained, our trading card game, didn't use the word ‘NFT’ for the first three years — we simply talked about the benefits players received, now they could sell or trade their card collection like you would Magic the Gathering or Pokémon cards. Until we can create amazing experiences without having to say ‘NFT,’ we're not there.”
In other NFT news: Ubisoft, the traditional publisher that’s steered hardest into the sector, tells Axios the NFT gaming company it has invested in, Frontier, has not chosen which kind of blockchain its game will use.
- That was in response to a query from Axios about why Frontier was selling its game's pre-launch NFTs on OpenSea for Ethereum.
- Ubisoft had publicly opted to use the significantly more eco-friendly Tezos platform for its own NFT sales.
- “Part of our role as a key investor is to provide them with counsel and guidance on the most eco-friendly and efficient technology choices,” a rep said.
4. Need to know
🎸 A record-breaking Guitar Hero player has confessed that he cheated, as chronicled by YouTuber Karl Jobst (via Kotaku).
🚙 Sony’s 32-minute video showcase of next month’s PS4 and PS5 Gran Turismo 7 was filled with great-looking cars and, unexpectedly, a look at an in-game café.
😲 Meta/Facebook’s metaverse-oriented Reality Labs group lost $10 billion last year, Axios’ Sara Fischer reports.
👩🏻⚖️ Ubisoft is suing a New York-based concert production company MGP over what the game publisher says is a canceled deal to stage Assassins Creed concerts.
5. Worthy of your attention
Is Switch Cloud Gaming Any Good? Kingdom Hearts 3, Hitman 3, Control, Guardians + More Tested! [Digital Foundry analysis video]
I don't like what this means for the potential future of the Switch. I understand the hardware is reaching sort of this point where it's not as feasible to bring other games over to it, necessarily. But I'm also feeling like there's probably no point in doing it this way. And I hope this doesn't become the de facto standard. ... I'm worried that publishers might look at this and be like, 'Well it'll be cheaper and easier if we just did cloud versions.' But they're not good enough. It's not good enough.
6. Can't stop Mario Kart
Screenshot: NIntendo
Not only did 2017's Mario Kart 8 Deluxe sell 7.7 million copies just between April and December of last year, according to Nintendo ...
But it has now nearly outsold the 10 best-selling games on Nintendo's previous console, the Wii U.
- MK8D sales = 43 million.
- Wii U's top 10 total = 47 million (but includes Mario Kart 8's original Wii U release).
It's no wonder Nintendo hasn't rushed to release a Mario Kart 9.
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🐦 Find us on Twitter: @megan_nicolett / @stephentotilo.
Confession: Got Mario Kart on my Switch but never played it.
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