Microsoft may not be doing as well as many would like to believe.
We already do know that the Xbox One is performing below expectations- the fact that Microsoft won’t even share numbers for the console, which is widely estimated to be trailing its competition by as much as 20 million units, should be evidence enough. But on the other hand, we’ve generally expected the company to be doing well on other fronts- after all, Windows 10 is supposed to be the fastest adopted OS of all time, Minecraft is the most successful game in the world, and games like Halo 5 have all sold at least a million copies, right?
It turns out, though, that relative to Microsoft’s projections, everything might be underperforming. In a long and extensive feature on Kotaku about Lionhead and their closure, and the demise of Fable Legends, a former, unnamed employee discusses the fundamental problem that Microsoft is facing- that of volumes, which they are no longer meeting, thanks to all their products underperforming relative to projections.
“Let’s be honest – we make our projections based on a series of assumptions,” said a former employee who worked closely with Microsoft. “There are supposed to be 2x as many Xboxes out there as there are right now. There are supposed to be 2x as many Windows 10 installs as there currently are. So now, when we look at how much money Legends could make in the free-to-play universe, you have to halve it. Because we can only reach half the audience that was projected.”
Another source brought up the underperformance of Minecraft and Halo 5, stating that when the company’s gaming efforts as a whole are misfiring, a studio not performing well – like Lionhead – was bound to be on the chopping block.
“I reckon [Phil Spencer] feels bad about Lionhead, but I think for him, he has to run all of Microsoft Studios as a business,” they said. “First-party studios isn’t doing so well.Halo 5 is a big miss, versus projections. Minecraft is a big miss, versus projections. Compared to either one of those, Lionhead is practically a rounding error. But I think if your division is under-performing, you have to go to your boss with something on the altar.”
The entire feature is fascinating, and definitely an exemplary instance of gaming journalism- I do encourage you to give it a read. It reveals a picture that all may not be rosy with the Redmond giant- at the very least, that their all encompassing strategy that they have been pushing so aggressively over the last year seems to have come at the expense of a lot of focus. Lionhead were only one casualty of this fallout.