The importance of the Xbox is something that keeps on growing for Microsoft, which is something that Xbox boss Phil Spencer talked about some time ago. That sentiment seems to echo throughout the entirety of Microsoft. At the Deutsche Bank Technology Conference which was held yesterday, Microsoft’s Executive Vice President and Chief Financial Officer Amy Hood spoke about the importance of investing in cloud and AI, and also about how important gaming is to Microsoft now (transcription by Seeking Alpha).
Amy Hood first spoke about how Microsoft is fundamentally concerned with developments related to gaming and intelligent cloud. She stated, “What I would ask everybody to do is step back a second on gaming. Gaming in a way for us, I would urge everybody to think about just as another incredibly interesting workload that exists in the worldview we have of an intelligent edge and intelligent cloud. If you’ve not had a chance to listen to Satya’s partner sort of deck and speeches, I would urge you to spend time if you want to understand sort of where we’re about – what we are fundamentally about, is understanding the vision we have for the intelligent edge and intelligent cloud.”
She then went on to talk more about how making use of the cloud will beneficial to gaming as a whole, saying, “Within that, the way I think about gaming and the way I think of increasingly thought about gaming is that it’s another first-party workload, no different from Dynamics or Office, then that’s made it different and more viable and more expressive by being built on the cloud that is intelligent. It’s a workload that allows us to build a cloud that’s built for different latency expectations, different usage patterns, different levels of 3D, but different levels of interactivity. It’s one of the best expressions of digital transformation of a business, the way transactions occur, in-product, user-led, user-loved.
“If I said, “Well what do we want from every product that we ship at Microsoft,” it looks exactly the way gaming is. You’d want it to have the same passion and the same emotional reaction that I get from Excel, I want everybody to get from all workloads that we build, gaming fans love doing it. And there’s absolutely no reason people can’t feel that expressiveness.”
Of course, Microsoft’s ever-increasing focusing on cloud technology has been apparent to see for everyone. They have explicitly stated that they will continue to invest in cloud services, even going on to open a dedicated division for cloud gaming. In fact, recent reports have even pegged them to be considering a cloud-specific variant of the next Xbox console. And if Hood’s words are anything to go by, that may very well come to fruition.
“Gaming is a great personification of what we’re trying to accomplish,” she said. “We will have endpoints. They will be made better by the enablement of the cloud. We will have developers, which is what you call the gaming cloud, be able to utilize Azure, because we will build the best gaming cloud, because we run a first-party server.
“We own – have great content. We know what developers want. And I think if I were to grade myself as a CFO, I would have said, “I wish I would have talked about gaming this way for the past five years because that’s absolutely the way we’ve seen it when we said this is a priority opportunity for us”. It also happens to be a pursuit, but it’s played across devices. It’s really user-centric that leads itself in many ways. It plays to our strengths as a platform company.
“We’ve seen that in maybe third-party gaming success in the past couple of quarters. It shows itself in our software and services KPI. When other companies have great success in their games, we too can benefit as a platform that people come to purchase and interact with Xbox. So it is a business that we’ve transitioned quite a bit. You’ll hear us and we’ve done it. I think, maybe I don’t know, but it’s been a little over a year, talk about that Xbox services KPI is a really important one for us. It’s about our ability to continue to monetize users and build an incredibly healthy platform.”
Finally, Hood also spoke about how proud she is of the Xbox team and their work overall. She said, “I’m really proud of that team. It’s a place that I’m not sure if you’ve gone to many E3 conferences, where they talk about AI and our research team. That team is one of the more aggressive adopters of our AI technology and one of the more important partners to our Azure team I’ve ever seen. It really shows itself and what we’re able to provide to customers. I actually – while I don’t spend a ton of my time playing Xbox, it’s a team that I’m really happy to advocate for because they made a world of difference for us.”
Overall, it’s evident that the importance of Xbox is paramount to Microsoft right now, and it’s likely that things will keep moving forward in this direction. The fact that they will heavily continue to invest in gaming has become clear for all to see by now. It’s great to see Microsoft paying more attention to gaming as a whole, as this will only lead to a growth in the industry.
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