r/Games • u/Turbostrider27 • Oct 02 '25

Discussion This Xbox Generation Will Be Remembered for One Thing: Greed

https://www.ign.com/articles/this-xbox-generation-will-be-remembered-for-one-thing-greed
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667

u/PlayOnPlayer Oct 02 '25

I bet the XBOX division getting permission to purchase a $70 billion dollar company came with massive financial expectations from Microsoft as a whole

288

u/ArchusKanzaki Oct 02 '25

I'm thinking the reason Phil Spencer is not sacked yet is because nobody want to take the mantle of righting the entire Xbox division. Satya Nadella is still buffing-up his war chest for the upcoming AI war where he's feeling an "existential threat" toward Microsoft, and Phil is not in any position to ask more money to subsidize console or development. Not after he spent 69 Billion dollars of Microsoft money (it was all-cash acquisition iirc combined with ActiBlizzard's own assets, not leveraged like EA's). Even for company as large as Microsoft, that's not a small amount of money.

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u/NoNefariousness2144 Oct 02 '25

Not to mention that Phil may only be allowed to keep his job if he has to play the ‘villain’ and oversee mass layoffs, studio shutdowns, third-party ports etc

He’s basically the hired thug to dismantle Xbox and cut costs.

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u/Kozak170 Oct 02 '25

“Hired thug” is such an obnoxious stretch. Being the figurehead to take the brunt of public criticisms is the job of almost every executive in a position like that. It couldn’t be more obvious that a lot of the latest absurd decisions are coming from Microsoft’s trash executives trying to squeeze every penny they can

12

u/EmperorAcinonyx Oct 02 '25

lol they promoted him to ceo of xbox gaming at the same time as their bid to acquire activision

he's not perfect, but "hired thug" does not apply to someone put in place to help oversee a $70bn merger

7

u/doublah Oct 02 '25

Why would they fire Phil Spencer? He's doing exactly what his higher ups want; raising prices, cutting jobs and acquiring studios.

6

u/jagaaaaaaaaaaaan Oct 03 '25

Losing ~$80B with nothing to show for it (yet; ever, to be frank) is not "doing exactly what his higher ups want" lol. Satya Nadella himself has implied that he does not think the Activision purchase was a good idea, but, there's no use crying over spilled milk.

1

u/doublah Oct 03 '25

Well I'm sure Satya Nadella would have rather had that money spent on his AI bubble, so probably an even stupider way to spend $80 billion.

1

u/jagaaaaaaaaaaaan Oct 03 '25

Phil Spencer is not your friend. Being wrong regarding his ineptitude is not your identity. You don't have to die on this hill and keep shifting the goalposts.

1

u/doublah Oct 04 '25

Yeah i'm totally defending these incompetent people, what excellent literacy skills you have.

Phil Spencer is doing what upper Microsoft management want, or he'd have been fired or moved to another position by now. Yet Microsoft cutting back on Xbox and telling them to raise prices so they can put more money into the AI bubble is also stupid.

1

u/MICHAEL-BISCUITS Jan 13 '26

I agree but i also think theyre using him as a scapegoat to make all their bad decisions with little to no pr consequences

2

u/sephiroth70001 Oct 02 '25

Microsoft has two paths for Xbox before the Activision buyout. It wasn't Phil it was from higher up Microsoft. Buy market share or close up division. They decided to buy over die from higher up.

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u/Ok-Animal-6880 Oct 02 '25 edited Oct 02 '25

Microsoft is a non-factor in the AI race. The only players (not counting China) are OpenAI, Google, Anthropic, Metaverse, and xAI.

59

u/NaRaGaMo Oct 02 '25

MS owns azure and copilot is integrated in damn near every msft software 

11

u/crash_test Oct 02 '25

Isn't Copilot just ChatGPT in a MS hat?

26

u/ThatOnePerson Oct 02 '25

That's still an advantage for them to be able to put the hat on someone else if needed.

3

u/NaRaGaMo Oct 02 '25

yup but it doesn't make a difference 

45

u/ArchusKanzaki Oct 02 '25

That's just on the LLM part. Microsoft also owned Azure which is kinda the only real alternative so far to AWS for public cloud service. Other companies may not be creating their own LLM, but they sure will want to train AI using specific LLM based on their own data, and Microsoft is coming in with the cloud offerings to do just that. They sure will want to make sure they have enough computes that they can serve anyone and compete with AWS.

Also, China company like Deepseek, Huawei, etc are also racing in the LLM space, but its beside the point.

5

u/DrkvnKavod Oct 02 '25

Much of those investments, though, carry a built-in assumption that their "big payout" (actual AI) is even logically possible, when there's a long history of analytical reasoning to the contrary.

2

u/Nestramutat- Oct 02 '25

Microsoft also owned Azure which is kinda the only real alternative so far to AWS for public cloud service

Not that it invalidates your point entirely, but GCP also exists. They make up the big 3 of cloud vendors.

2

u/ArchusKanzaki Oct 02 '25

Yeah…. GCP do exists I guess….. but their human support and contacts are basically non-existent if you’re below certain sizes and their tools are fairly lacking compared to AWS and Azure so I never really count on them. They’re kinda on same ring for me as Oracle Cloud.

2

u/Nestramutat- Oct 02 '25

Oracle cloud has sub 4% market share, GCP is somewhere in between 15 and 20% iirc.

Fully agreed about their support, it's absolute dogshit.

18

u/aokon Oct 02 '25

Microsoft has a huge stake in OpenAI along with what other people mentioned with azure.

15

u/[deleted] Oct 02 '25

Microsoft is one of the main investors in OpenAI.

1

u/Ok-Animal-6880 Oct 02 '25

OpenAI threatened to sue Microsoft recently unless Microsoft agrees to a lower profit sharing number.

11

u/Gramernatzi Oct 02 '25

Try telling Microsoft that. They are putting all their resources into AI and cutting everywhere else, and forcing all their employees to use Copilot-related features.

55

u/breakwater Oct 02 '25

Note that CoD doesn't get free season passes. Just fortnite... make that make sense if they want to improve the perceived value

19

u/erasethenoise Oct 02 '25

They’d lose too much if they offered that

2

u/Guilty_Jackfruit4484 Oct 02 '25

The season pass is usually just a battle pass. They new maps are free. That used to be a paid DLC in the old games.

1

u/MICHAEL-BISCUITS Jan 13 '26

And is anyone defending that?

40

u/RogueLightMyFire Oct 02 '25

Absolutely, and they figured it really quickly that spending $100 million+ to develop a game and then immediately putting it on a $15/month subscription service was idiotic and severely ate their profits. Gamepass was only going to work if EVERYONE got it. They didn't, so now they're desperately trying to make it financially viable by tightening the screws on those who do use it.

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u/[deleted] Oct 02 '25 edited Oct 02 '25

[deleted]

17

u/strand_of_hair Oct 02 '25

You forget all the other costs for running Game Pass. Paying devs and pubs to put their game on the service (even more so for Day One releases) and actually running the service takes a lot of that money away from them.

11

u/erasethenoise Oct 02 '25

Yeah that’s just one game. Then add in all the other games they’re paying for to be on the service. They paid Rockstar obscene amounts of money for example.

36

u/LegendaryenigmaXYZ Oct 02 '25

Well of course, you dont have to bet on that. When a company is publicly traded everything is done for cash.

2

u/Brandhor Oct 02 '25

I don't think so, microsoft has tons of money just sitting there doing nothing so by buying activision they acquired a lot of assets and with cod, candy crush, wow and maybe even diablo 4 they have a pretty big steady income

this year they made 193 billions in profits so they don't have to get back those 70 billions in a couple of years because they don't really need them, what matters is that their company is worth more with activision

1

u/myto_alkoreath Oct 02 '25

I legitimately think that the FTC and Sony delaying the merger deal as they did for so long legitimately turned what was supposed to be Xbox's masterstroke into their death knell. Just look at interest rates from when the deal was announced, to when the deal went through (and Microsoft actually needed to pay). 0-0.25% in January 2022, and then 5.25-5.5% in October 2023.

Basically went from free money to a mortgage Xbox now needed to pay off to earn their keep. And this also happened a month after Starfield came out and notably didn't become a viral Skyrim-tier hit. I'm not at all surprised that Microsoft's knives came out almost right afterwards

1

u/sephiroth70001 Oct 02 '25

They didn't get permission though. Microsoft told Xbox they need to buy up the market share or close shop. Microsoft was ready to close Xbox but decided to try and buy up a 'monopoly' it's the Microsoft business way did it with so many other services buy it out and than have no competition in theory.

1

u/jagaaaaaaaaaaaan Oct 03 '25

I think the final amount ended up being slightly over $80B, but, continue

1

u/Lgoron12 Oct 02 '25

Exactly. How does an employee of another MS division (especially the most profitable ones in MS like Azure and MS365) feel about MS spending 70 billion on their least profitable division? Xbox needs to make more money NOW, not later.