WEBVTT - Microsoft Gaming CEO Phil Spencer 0:00:00.000 --> 0:00:01.560 I talked to you about my own sort of fear 0:00:01.600 --> 0:00:05.280 of kids playing too much a friend, so I try 0:00:05.320 --> 0:00:07.440 to think of it like he's it's like a painting. 0:00:08.160 --> 0:00:09.719 Like show it, ask him to show it to you, 0:00:09.760 --> 0:00:11.760 like the same way you would treat a painting. I 0:00:11.840 --> 0:00:14.520 want to see what you mean. That's so make it 0:00:14.520 --> 0:00:17.880 a family. Do you have kids? Have two daughters? Do 0:00:17.960 --> 0:00:21.159 they play? Yeah, they're older now, but they not a 0:00:21.200 --> 0:00:23.080 lot because like growing up, I think it was always 0:00:23.120 --> 0:00:27.240 the thing that dad did. Hi, everyone, and welcome to 0:00:27.280 --> 0:00:30.720 this edition of Bloomberg Studio. One point out, I'm Emily Chang. 0:00:31.400 --> 0:00:33.440 He's in charge of one of the top gaming consoles 0:00:33.479 --> 0:00:38.200 in the world, Microsoft Xbox, a sixteen billion dollar business 0:00:38.200 --> 0:00:42.080 home to Minecraft, Halo, and perhaps soon call of Duty 0:00:42.440 --> 0:00:45.120 if a seventy billion dollar deal to buy Act Division 0:00:45.200 --> 0:00:48.800 goes through. The executive behind that deal is Phil Spencer, 0:00:49.120 --> 0:00:51.880 and if he has his way, he hopes the gaming 0:00:51.880 --> 0:00:54.920 industry will level up in the next twenty years and 0:00:54.960 --> 0:00:58.200 be less a battle between rival consoles and more a 0:00:58.320 --> 0:01:02.000 home to platforms that reach every potential gamer on the planet. 0:01:02.480 --> 0:01:04.360 Joining me on this edition of Bloomberg Studio. At one 0:01:04.400 --> 0:01:18.119 point out, Microsoft Gaming CEO Phil Spencer. So we're gonna 0:01:18.160 --> 0:01:21.080 start by going in the way back machine a little bit. 0:01:21.480 --> 0:01:25.400 UH did some research. You worked at a computer mart 0:01:25.440 --> 0:01:29.760 in Vancouver, Washington, where you were selling and playing a 0:01:29.760 --> 0:01:33.760 lot of computer games in the eighties. I'm thinking like 0:01:34.319 --> 0:01:39.680 Stranger Things, Stranger Things resonates with my definitely growing up, 0:01:39.720 --> 0:01:41.640 my inner geekdom is there. I'm going to need some 0:01:41.640 --> 0:01:45.240 photographic evidence of this. What were your most played games 0:01:45.280 --> 0:01:48.840 in the eighties. So it's funny when I started growing 0:01:48.960 --> 0:01:51.960 up playing video games, most of it was going to 0:01:51.960 --> 0:01:54.200 the arcades. Now, most people won't remember these days of 0:01:54.240 --> 0:01:56.880 like going to a store where you put quarters in play. 0:01:57.800 --> 0:02:00.080 Robotron was one of my favorites in the arcades. I 0:02:00.120 --> 0:02:02.680 would go play that, and then probably more in the 0:02:02.720 --> 0:02:06.200 seventies and the eighties. I remember my dad bringing a 0:02:06.320 --> 0:02:10.760 video game, The Atar with the cartridges home, and that 0:02:10.880 --> 0:02:12.600 was kind of the beginning of it, and I just 0:02:12.800 --> 0:02:16.000 kept playing and it's still with me. You started out 0:02:16.000 --> 0:02:20.800 at Microsoft as an intern in how would you compare 0:02:20.880 --> 0:02:24.840 Microsoft's history on games under Bill Gates versus Steve Baber 0:02:25.120 --> 0:02:29.560 versus such an ADELA. Yeah, I think, like many things 0:02:29.560 --> 0:02:32.919 at Microsoft back in the eighties, We started in video 0:02:32.960 --> 0:02:35.600 games as much out of out kind of a defensive. 0:02:35.840 --> 0:02:39.440 We were worried that other companies might be putting the 0:02:39.440 --> 0:02:42.160 home PC in place, and the avenue to get there 0:02:42.240 --> 0:02:45.079 was through video games and game consoles. So we say, okay, 0:02:45.080 --> 0:02:46.880 we're gonna go start our own game console because if 0:02:46.919 --> 0:02:48.480 anybody is going to build a computer for the home, 0:02:48.520 --> 0:02:52.120 we wanted it to be Microsoft. I think through Steve's years, 0:02:52.160 --> 0:02:54.640 it was more about growing the business and how do 0:02:54.680 --> 0:02:57.440 we bring kind of business leadership into this group of 0:02:57.520 --> 0:02:59.600 rag tech people who are out there just having fun 0:02:59.639 --> 0:03:02.840 building video games as part of Xbox. I think with 0:03:02.880 --> 0:03:05.560 Satia when I first took this job and I got 0:03:05.600 --> 0:03:09.080 this job as head of Xbox about two months after 0:03:09.160 --> 0:03:12.079 Satia Nadella became the CEO of Microsoft. Well, and when 0:03:12.080 --> 0:03:15.560 Sata started, there were activist investors targeting the company. The 0:03:15.600 --> 0:03:20.040 stock hadn't been doing well. They were targeting Xbox. Absolutely yeah, 0:03:20.080 --> 0:03:24.200 at the time, absolutely right that there was a question 0:03:24.240 --> 0:03:26.440 but why are we in video games? In fact, one 0:03:26.480 --> 0:03:28.720 of his first questions to me was because he had 0:03:28.760 --> 0:03:30.440 come from the cloud part of the business being and 0:03:30.480 --> 0:03:34.200 then cloud was he didn't actually understand why we're in 0:03:34.280 --> 0:03:36.880 video games, not as a negative, just as literally, why 0:03:36.920 --> 0:03:38.960 are why is Microsoft this at the time, what one 0:03:38.960 --> 0:03:41.120 trillion dollar market cup company? Why are we in the 0:03:41.200 --> 0:03:43.960 video game business? And he he challenged us, like, let's 0:03:44.000 --> 0:03:46.000 go figure out why we're in the video game space 0:03:46.480 --> 0:03:48.520 and see if it makes sense, and if it does, 0:03:49.120 --> 0:03:51.520 let's be all in, and if it doesn't, we'd make 0:03:51.640 --> 0:03:55.160 other decisions. Early in that journey is when this game, 0:03:55.160 --> 0:03:58.200 which I know you know about, is Minecraft, and the 0:03:58.200 --> 0:04:02.320 opportunity to acquire Minecraft came about like months after this moment, 0:04:02.440 --> 0:04:05.160 So I might have a kid or two that pay Minecraft, yes, 0:04:05.400 --> 0:04:08.360 And it really caused us as a team to think about, Okay, 0:04:08.360 --> 0:04:09.960 if you're gonna go spend two and a half billion 0:04:09.960 --> 0:04:14.200 dollars on this blocky Java base game, how does this 0:04:14.320 --> 0:04:16.840 fit into the mission of this company? Let's talk about 0:04:16.839 --> 0:04:20.039 that strategy? Was the idea to tie gaming to the cloud? 0:04:20.200 --> 0:04:22.159 Was that the clincher. If you think about a game 0:04:22.160 --> 0:04:25.240 like Minecraft or Fortnite or Roadblocks, these are games that 0:04:25.279 --> 0:04:29.200 play on iPads, they play on xboxes, PlayStations, PCs, that 0:04:29.320 --> 0:04:33.320 games were going from per device to per user and 0:04:33.480 --> 0:04:35.479 cloud would be an enabler for that. But we didn't 0:04:35.480 --> 0:04:37.480 start with how do we fit cloud into video games? 0:04:37.520 --> 0:04:39.800 We were just kind of watching the trends of creators 0:04:39.800 --> 0:04:43.840 and where they were building, and saw this transformation of 0:04:44.640 --> 0:04:48.520 games being ubiquitous. How does this all as you see 0:04:48.520 --> 0:04:51.480 it connect to Microsoft's future? The cool thing I see 0:04:51.560 --> 0:04:55.000 going on now and it does fit with the investments 0:04:55.000 --> 0:04:58.919 Microsoft's making an Azure in other places. Is today the 0:04:58.960 --> 0:05:01.680 world anybody's a creator and video games are going through 0:05:01.720 --> 0:05:05.640 that same transformation. Where if I rewind to my childhood 0:05:05.640 --> 0:05:07.760 and playing video games, I walked into like an Egghead 0:05:07.800 --> 0:05:10.920 software and there was a line of boxes. We might 0:05:10.920 --> 0:05:12.760 go create the best game in the world, but there 0:05:12.800 --> 0:05:14.240 was no way for us to get it in front 0:05:14.240 --> 0:05:16.440 of an actual person who might want to go play, 0:05:16.480 --> 0:05:19.479 because we couldn't get shelf space. All these things. Today, 0:05:19.560 --> 0:05:22.320 we see gamers on our creators on our platform from 0:05:22.360 --> 0:05:26.000 all over the globe who can create a game that 0:05:26.720 --> 0:05:30.440 can literally reach billions of people through our distribution capability. 0:05:30.720 --> 0:05:33.200 To a player, a game is a game, and you 0:05:33.240 --> 0:05:36.200 can deliver that game through the cloud to anybody who 0:05:36.240 --> 0:05:39.560 has a device that's capable of reaching the Internet. I 0:05:39.600 --> 0:05:42.480 hear you're still an avid gamer. How often do you 0:05:42.520 --> 0:05:44.800 play games like how many hours I go to bed early, 0:05:44.839 --> 0:05:47.479 so I gotta bet at ten at Seattle at ten o'clock. 0:05:47.600 --> 0:05:49.599 People who play with me online they tease me about 0:05:49.640 --> 0:05:52.760 how militant I am at ten o'clock. I'm out. I 0:05:52.920 --> 0:05:57.880 probably play fifteen hours a week. As I understand that 0:05:57.960 --> 0:06:00.400 you do your own deals, you don't necessarily we need 0:06:00.640 --> 0:06:04.120 permission from Sacha to do a deal. Is that true? Now, 0:06:04.279 --> 0:06:08.599 there's there's definitely it depends on the amount of the 0:06:08.760 --> 0:06:10.599 money in the deal. But when we think about some 0:06:10.640 --> 0:06:12.880 of our bigger deals, we go to the board. Um 0:06:13.000 --> 0:06:16.640 and so Satiadella, Amy Hood the CFO have been incredibly 0:06:16.680 --> 0:06:19.960 supportive as Xbox were one of the biggest consumer businesses 0:06:20.000 --> 0:06:23.920 in the company. Were a brand that makes Microsoft relevant 0:06:23.960 --> 0:06:26.640 to a whole generation that probably doesn't think about a 0:06:26.680 --> 0:06:29.400 lot of other Microsoft products in their day to day life. Well, 0:06:29.440 --> 0:06:33.440 you're in the process of a potentially monster deal, seventy 0:06:33.520 --> 0:06:37.080 billion dollar acquisition of Activision. Talk to us about how 0:06:37.080 --> 0:06:41.039 this deal came together when we were thinking about on 0:06:41.120 --> 0:06:45.160 that idea of what are we capable of doing today 0:06:45.200 --> 0:06:48.640 and where do we need to go? The biggest gaming 0:06:48.680 --> 0:06:52.800 platform on the planet is mobile phones UH one and 0:06:52.839 --> 0:06:56.279 a half billion people play on mobile phones, and I 0:06:56.320 --> 0:06:58.960 guess regretfully as Microsoft, it's not a place where we 0:06:58.960 --> 0:07:02.560 have a native platform as gaming, coming from console and PC, 0:07:02.760 --> 0:07:05.640 we don't have a lot of creative capability that has 0:07:06.040 --> 0:07:09.479 built hit mobile games. One thing about the video game 0:07:09.520 --> 0:07:13.840 space is if you've been around, maybe too long, you 0:07:13.920 --> 0:07:16.920 know most of the creators out there, so you kind 0:07:16.920 --> 0:07:19.400 of know teams that could be a good fit in 0:07:19.520 --> 0:07:21.360 terms of what we were trying to do. But we 0:07:21.400 --> 0:07:25.760 really started the discussions internally, at least on Activision Blizzard 0:07:25.760 --> 0:07:28.440 around the capability they had on mobile and then PC 0:07:28.920 --> 0:07:31.240 with Blizzard. Those are the two things that we're really 0:07:31.320 --> 0:07:33.800 driving our interest. Big tech is under a lot of 0:07:33.840 --> 0:07:37.680 regulatory scrutiny. Big tech deals are under scrutiny. What's the 0:07:37.680 --> 0:07:41.120 status of the deal? What have your conversations with regulators been? Like, 0:07:41.640 --> 0:07:44.480 you know, I kind of come at this that big 0:07:44.520 --> 0:07:48.080 deals should be scrutinized, right. I think that's the role 0:07:48.280 --> 0:07:51.640 of regulators, why they're in place. I feel good about 0:07:51.640 --> 0:07:56.000 the progress that we've been making, asking good, hard questions 0:07:56.520 --> 0:07:59.080 about Okay, what is our intent? What does this mean 0:07:59.200 --> 0:08:01.920 if you play it out over five years? Is this 0:08:02.120 --> 0:08:04.560 constricting a market. I feel good about it. Microsoft had 0:08:04.560 --> 0:08:08.040 its time in the antitrust spotlight. Now the spotlights on 0:08:08.240 --> 0:08:12.680 Google and Meta and Apple and Amazon. How is it 0:08:12.680 --> 0:08:17.200 that Microsoft has skirted the spotlight. Your competitors might say 0:08:17.240 --> 0:08:23.080 it's unfair. Well, I think your point about us having 0:08:23.080 --> 0:08:25.720 grown through that time, I might call that the adolescent 0:08:25.760 --> 0:08:28.360 ears for us, as we were kind of learning. I 0:08:28.400 --> 0:08:31.520 think it's an important consideration that we did learn a 0:08:31.520 --> 0:08:34.440 lot as a company through that time and what it meant, 0:08:34.440 --> 0:08:37.280 and I think that sticks with us today. You've been 0:08:37.320 --> 0:08:40.520 a really big advocate of cross platform play and this 0:08:40.640 --> 0:08:43.160 idea that gamers should be allowed to play whatever games 0:08:43.160 --> 0:08:45.680 they want on whatever platform they want. Why is that 0:08:45.760 --> 0:08:48.760 so important to you? Maybe you happen in your household 0:08:48.800 --> 0:08:50.840 to buy an Xbox, and I buy a PlayStation, and 0:08:50.880 --> 0:08:53.679 our kids want to play together and they can't because 0:08:53.679 --> 0:08:55.640 we bought the wrong piece of plastic to plug into 0:08:55.679 --> 0:08:59.320 our television. It just seems that these artificial constraints that 0:08:59.400 --> 0:09:03.400 the industry we might put up for near term kind 0:09:03.440 --> 0:09:06.360 of business dynamics. In the long run, if you take 0:09:06.400 --> 0:09:08.920 a business that is at three billion people growing to 0:09:09.000 --> 0:09:11.760 four billion people over the next decade, and saying how 0:09:11.800 --> 0:09:15.200 do we continue to grow this business reducing friction for 0:09:15.240 --> 0:09:18.200 our customers? As an industry has to be at the top. 0:09:18.520 --> 0:09:20.160 So how far does this go? Does this mean that 0:09:20.200 --> 0:09:22.440 activision games that Call of Duty you'll be able to 0:09:22.480 --> 0:09:25.000 play on any platform and perpetuity. I don't know what 0:09:25.040 --> 0:09:27.720 that means and forever, Like when you think about how long, 0:09:27.760 --> 0:09:30.319 And it's not for any kind of nefarious business reason. 0:09:30.400 --> 0:09:32.120 It's just like, what do we even platforms mean ten 0:09:32.200 --> 0:09:34.440 years ago? Like, I think the definition of some of 0:09:34.480 --> 0:09:37.920 these things might change over time, but our expectation is 0:09:37.960 --> 0:09:40.640 we want more people to play. So I know you're 0:09:40.679 --> 0:09:44.160 working with Sony on some things for the benefit of gamers, 0:09:44.160 --> 0:09:45.800 Can you talk to us about that a little bit. 0:09:46.080 --> 0:09:49.280 We have a pretty big publishing footprint on PlayStation as 0:09:49.280 --> 0:09:52.400 well as Nintendo, which means we have good relationships with 0:09:52.440 --> 0:09:54.800 those platforms because we're they're a big part of our 0:09:54.840 --> 0:09:57.280 business and we're a big part of their business. I 0:09:57.280 --> 0:10:00.520 think our long term ambition of where we see this 0:10:00.600 --> 0:10:04.280 industry growing is also shared. I think the area where 0:10:04.320 --> 0:10:07.240 things get stuck a little bit, it's in the kind 0:10:07.280 --> 0:10:11.320 of nearer mid term competition. If somebody walks into a 0:10:11.360 --> 0:10:15.559 store and they have one bill. They're either going to 0:10:15.600 --> 0:10:17.800 walk out with a switch, which is what most people buy, 0:10:18.120 --> 0:10:20.240 or they're gonna walk out with a PlayStation five, or 0:10:20.240 --> 0:10:22.760 they're gonna walk out with an Xbox, or maybe somebody 0:10:22.760 --> 0:10:25.520 will go buy gaming a Windows PC. But in that 0:10:25.600 --> 0:10:28.319 world of somebody's got to make a decision for one 0:10:28.360 --> 0:10:31.880 platform over another in the beginning, UM, that is where 0:10:32.000 --> 0:10:33.640 I think we we get stuck in some of the 0:10:33.720 --> 0:10:35.680 kind of near term competition. I don't think that's bad. 0:10:36.280 --> 0:10:38.520 It's just the dynamic of each of us pushing each other, 0:10:38.960 --> 0:10:41.760 um to build the best product for our customers. Now, 0:10:41.840 --> 0:10:44.720 while you've been working to make the gaming industry more collaborative, 0:10:45.080 --> 0:10:48.320 the gaming industry has historically been tough for women, for 0:10:48.800 --> 0:10:53.200 diverse voices. When you look back on gamer Gate, do 0:10:53.240 --> 0:10:55.360 you think you did enough. I can always look back 0:10:55.400 --> 0:10:57.839 at any incident for me and think about things that 0:10:58.000 --> 0:10:59.640 in hindsight, I should have done more, I should have 0:10:59.640 --> 0:11:02.439 done better. I'm proud of how our team evolves, how 0:11:02.480 --> 0:11:05.679 our leadership team evolves. Now their societal issues around us. 0:11:05.720 --> 0:11:08.360 The gaming industry is not kind of immune to those 0:11:08.480 --> 0:11:10.800 people in my position sitting there as kind of old 0:11:10.840 --> 0:11:14.160 white guy as head of gaming platforms, not in I'm 0:11:14.200 --> 0:11:16.400 more the norm than I should be. And I talk 0:11:16.480 --> 0:11:19.160 about three billion people who play video games, and if 0:11:19.160 --> 0:11:22.640 you say your your audience is three billion people, then 0:11:22.640 --> 0:11:26.199 the demographic is the planet's demographic. I want our team 0:11:26.280 --> 0:11:29.360 to reflect the customer that we aspire to earn. I 0:11:29.440 --> 0:11:32.680 know that our teams ship their culture with every product 0:11:32.679 --> 0:11:35.679 that they shipped. Well. Activision specifically is facing a lot 0:11:35.720 --> 0:11:38.920 of challenges here. There have been lawsuits, there have been 0:11:39.040 --> 0:11:44.120 employee walkouts, there have been accusations of sexual harassment, sexual assault. 0:11:44.360 --> 0:11:46.600 How much did that concern you when you're thinking about 0:11:46.600 --> 0:11:50.120 this deal. We had access to data from the company 0:11:50.160 --> 0:11:53.720 before we announced the acquisition to see what the actual 0:11:53.800 --> 0:11:57.280 numbers were in terms of reports. Um, we definitely as 0:11:57.280 --> 0:11:59.440 a team signed up to say, just like we're on 0:11:59.440 --> 0:12:02.160 our own journe with Xbox, that we're going to expand 0:12:02.160 --> 0:12:04.640 that journey if this deal closes. It's a lot of 0:12:04.640 --> 0:12:06.480 people and a lot of people that will feel very 0:12:06.520 --> 0:12:10.080 dedicated to and committed to building a great workplace environment 0:12:10.120 --> 0:12:11.959 for them. That's true of any of our studios, right. 0:12:12.559 --> 0:12:14.800 But it's obviously a conversation that you're going to have 0:12:15.160 --> 0:12:17.840 you think about the board of Microsoft and when they're 0:12:17.840 --> 0:12:20.040 thinking about the deal and they're typing into their search 0:12:20.080 --> 0:12:23.240 engine activision, what are the headlines that they're coming back 0:12:23.280 --> 0:12:25.839 And there were questions that we had. We've learned from this, 0:12:26.000 --> 0:12:28.720 we will continue to learn um and we're committed to 0:12:28.760 --> 0:12:31.440 that that journey not only for the betterment of our teams, 0:12:31.440 --> 0:12:34.439 but our customers, the creators on our platform. We think 0:12:34.480 --> 0:12:37.360 it's critical to our business success that we make progress here. 0:12:37.840 --> 0:12:40.800 Is Bobby Kodak going to stay on? Yeah, I'm not 0:12:40.960 --> 0:12:45.280 in a position to make comments about their leadership team 0:12:45.440 --> 0:12:48.600 were in the regulatory phase and and how that will close, 0:12:48.840 --> 0:12:51.960 Like when the deal closes, then we have say and 0:12:52.040 --> 0:12:54.160 how they're managed and how it goes. But until that point, 0:12:54.480 --> 0:12:57.040 I'm not really in position to say. There have been 0:12:57.360 --> 0:13:02.640 very specific allegations of Bobby being aware of things that 0:13:02.720 --> 0:13:05.120 happened and not reporting it to the board. What has 0:13:05.120 --> 0:13:08.120 he communicated to you about what he knew, what he 0:13:08.160 --> 0:13:13.319 didn't know. The discussions we've had were about the teams 0:13:13.559 --> 0:13:18.680 where they're at. Can they make the progress they need 0:13:18.679 --> 0:13:22.000 to make because the closing is a long process. Are 0:13:22.040 --> 0:13:24.520 they putting in the work that they need to put 0:13:24.600 --> 0:13:30.000 in two move along their journey, and I believe they're 0:13:30.000 --> 0:13:32.120 committed to that. When I look at the work that 0:13:32.160 --> 0:13:35.120 they're doing now, there's always more that can be done. 0:13:35.600 --> 0:13:38.720 Activision has divisions that are unionizing, and I know Microsoft 0:13:38.760 --> 0:13:42.520 has said they'll recognize those unions. What does that look like. 0:13:43.520 --> 0:13:45.720 I've never run an organization that has unions in it, so, 0:13:46.120 --> 0:13:48.960 but what I can say and working through this, is 0:13:49.559 --> 0:13:56.280 we recognize workers needs to feel safe and heard and 0:13:56.280 --> 0:14:01.120 and compensated fairly in order to do great work. So 0:14:01.200 --> 0:14:03.280 we thought it was important to make a public statement 0:14:03.320 --> 0:14:05.520 on that front for workers that are there that are 0:14:05.520 --> 0:14:08.320 making decisions about their employment and how they want to 0:14:08.840 --> 0:14:11.280 know what that relationship looks like to understand what it 0:14:11.320 --> 0:14:13.520 would mean if Microsoft was able to close the deal. 0:14:13.640 --> 0:14:17.720 When I think about the environment on any of our teams, 0:14:17.840 --> 0:14:20.560 I build from a perspective of people of building a 0:14:20.600 --> 0:14:23.240 workplace where people feel like they can do their best 0:14:23.240 --> 0:14:25.200 work in a sustainable way and they could see this 0:14:25.240 --> 0:14:27.880 as a long term career for themselves. So if Xbox 0:14:27.880 --> 0:14:31.680 employees decided to unionize with Microsoft support that we knew. 0:14:31.720 --> 0:14:34.400 We made the public statement that it was It wasn't 0:14:34.880 --> 0:14:37.320 that it would have a broader impact than just the 0:14:37.360 --> 0:14:40.320 impact at what would potentially happen on the close of 0:14:40.360 --> 0:14:42.880 Activision Blizzard. So let's talk about some of the broader trends. 0:14:42.960 --> 0:14:45.880 You and I talked a lot during the pandemic gameplay surge. 0:14:46.320 --> 0:14:49.280 During the pandemic, we were all stuck at home. Has 0:14:49.320 --> 0:14:53.800 that changed? It has changed. We've seen gameplay hours come 0:14:53.880 --> 0:14:55.960 down a bit, which I will say I think is 0:14:55.960 --> 0:14:58.400 a good thing. People should get outside, people should moderate. 0:14:58.760 --> 0:15:02.720 Long term growth trajector for the business is incredibly durable 0:15:02.760 --> 0:15:04.960 and strong. You have adults now that have grown up 0:15:04.960 --> 0:15:07.280 playing like myself, and it's become a more normal part 0:15:07.680 --> 0:15:11.200 of of how people entertain and how families spend time. 0:15:11.280 --> 0:15:15.640 As the economy has has tightened for consumers, as gas 0:15:15.680 --> 0:15:19.160 prices are higher, people are worried about what what their 0:15:19.160 --> 0:15:23.680 home economic situation looks like. We're seeing gameplay hours kind 0:15:23.680 --> 0:15:26.600 of stay strong because I think from a value perspective, 0:15:26.840 --> 0:15:29.280 gaming is a good value for people at a time 0:15:29.320 --> 0:15:32.240 of kind of economic constriction. People bought Minecraft, they can 0:15:32.280 --> 0:15:35.080 continue to go play Minecraft. What about supply chain? What 0:15:35.200 --> 0:15:37.880 challenges are you still seeing? Are all the consoles that 0:15:37.960 --> 0:15:39.680 you want to have made in time for the holiday 0:15:39.720 --> 0:15:42.600 is going to be here. I still think demand will 0:15:42.640 --> 0:15:45.640 outstrip supply for us this holiday. We'll see when we 0:15:45.680 --> 0:15:49.120 get into three you'll start to see more that supply 0:15:49.680 --> 0:15:52.920 is catching up with demand and maybe actually see one 0:15:53.000 --> 0:15:54.760 in the store when you walk in. And what's the 0:15:54.760 --> 0:15:56.600 future of the console? I mean, our console is going 0:15:56.640 --> 0:15:59.200 to be around in ten years if even Microsoft is 0:15:59.240 --> 0:16:02.400 your sort of d emphasizing. Yeah, I equate in my 0:16:02.520 --> 0:16:04.880 head gaming on console to gaming on a television. But 0:16:04.920 --> 0:16:07.480 absolutely people are playing on more screens. And I think 0:16:07.480 --> 0:16:09.400 for us as a platform, if we don't adopt that 0:16:09.440 --> 0:16:12.080 as part of our strategy, we're kind of pushing against 0:16:12.080 --> 0:16:14.400 what our consumer, what our customers are asking for. We 0:16:14.440 --> 0:16:16.800 talked a bit about kids earlier, and you know, as 0:16:16.800 --> 0:16:19.080 a mom, I'm always slightly terrified that my kids are 0:16:19.080 --> 0:16:21.800 playing too much video games are ruining their brains. They're 0:16:21.800 --> 0:16:27.200 gonna be exposed to all this bad stuff. You're very 0:16:27.200 --> 0:16:31.240 pro game for kids, and I'm wondering, I wonder, how 0:16:31.240 --> 0:16:34.680 do you support that as a parent. You know what's 0:16:34.680 --> 0:16:36.440 best for your kid first, Like, I'm not going to 0:16:36.560 --> 0:16:39.600 say what's best for any individuals kids. What we can 0:16:39.720 --> 0:16:43.440 say and The research backs this up that gaming can 0:16:43.480 --> 0:16:46.760 be a great on ramp for kids into STEM education 0:16:46.800 --> 0:16:48.880 as they think about, well, how are these games built. 0:16:49.000 --> 0:16:52.720 I also think the community power of gaming is something 0:16:52.760 --> 0:16:56.920 that doesn't get talked about enough. Last night, I was 0:16:56.960 --> 0:16:59.840 playing Escape Room on Xbox with one of my friends, 0:17:00.040 --> 0:17:02.200 and while the conversation might start about how are we 0:17:02.200 --> 0:17:05.320 going to escape from this room, then we're talking about 0:17:05.359 --> 0:17:07.880 his daughter, who's looking at colleges, and we just talk 0:17:07.920 --> 0:17:10.479 about life like people will when they're in the same place. 0:17:11.119 --> 0:17:14.960 And that ability for gaming, whether it's with kids or adults, 0:17:15.440 --> 0:17:19.040 to bring people from different backgrounds, different geographies, different socio 0:17:19.040 --> 0:17:24.679 economic different religion, different genders together and shared experiences is 0:17:24.920 --> 0:17:28.360 pretty unique out there, and I think building those connections 0:17:28.400 --> 0:17:32.200 that video games can enable. Maybe this is too altruistic, 0:17:32.240 --> 0:17:34.879 but there aren't enough of those things in the world today, 0:17:35.000 --> 0:17:37.760 which brings me to the metaverse. You know, obviously Sacha 0:17:37.840 --> 0:17:40.399 came on my show. I hope that this is the 0:17:40.480 --> 0:17:43.680 next big thing that happens off to the mobile internet. 0:17:43.800 --> 0:17:47.720 Facebook changed its name to Meta. Some gamers don't even 0:17:47.720 --> 0:17:52.200 want this whole metaverse thing. My view on on meta 0:17:52.280 --> 0:17:54.720 versus gamers have been in the metaverse for thirty years. 0:17:54.760 --> 0:17:58.080 When you're playing games, if you're playing a World of 0:17:58.080 --> 0:18:02.320 Warcraft game, you're playing in rollblocks, you're playing in a 0:18:02.440 --> 0:18:05.240 racing game where everybody is in a shared world. These 0:18:05.280 --> 0:18:08.119 three D shared worlds that gamers have been playing in 0:18:08.200 --> 0:18:11.119 for years and years. I think what we've found is 0:18:11.160 --> 0:18:13.400 there's more connection, as I was talking about before, because 0:18:13.400 --> 0:18:16.879 we have shared purpose. It's not at all surprising to 0:18:16.920 --> 0:18:19.120 me that gamers might look at metaverse and think, well, 0:18:19.359 --> 0:18:21.760 I don't really get it, because we've we've already I 0:18:21.960 --> 0:18:24.760 already have an avatar of myself, and I can already 0:18:24.760 --> 0:18:27.000 go into a shared world, and I can already sit 0:18:27.040 --> 0:18:30.240 there and have voice conversations with people anywhere. But I 0:18:30.320 --> 0:18:33.760 do think the skills that we have as game designers 0:18:33.760 --> 0:18:37.199 and game creators make a ton of sense and a 0:18:37.200 --> 0:18:39.920 lot of enterprise experiences. And this is why Sati gets 0:18:39.920 --> 0:18:43.000 excited about it. What about crypto Play to earn is 0:18:43.560 --> 0:18:46.480 all the rage right now? Play to earn specifically is 0:18:46.520 --> 0:18:51.800 something I'm cautious about. Um it creates a worker force 0:18:51.920 --> 0:18:55.560 out of players for certain players to kind of monetize 0:18:55.600 --> 0:18:57.840 now to be fair for us in the game. In 0:18:57.920 --> 0:19:00.560 the game industry. This has existed for years. Years. There 0:19:00.600 --> 0:19:03.840 have been gold farmers of people who literally just spend 0:19:03.840 --> 0:19:06.639 their time doing some menial task in a game to 0:19:06.960 --> 0:19:09.199 accrue some currency that then they could sell to some 0:19:09.240 --> 0:19:11.880 other rich player and for real money so that that 0:19:11.920 --> 0:19:14.000 person doesn't have to spend their time. But now you 0:19:14.080 --> 0:19:16.320 find games that are starting to build that into the 0:19:16.320 --> 0:19:19.000 economy of the game itself. We made some comments and 0:19:19.080 --> 0:19:21.919 Minecraft about how we view n f T s in 0:19:21.920 --> 0:19:23.960 this space, because we saw people doing things that we 0:19:24.000 --> 0:19:25.919 thought were exploited in our product, and we said we 0:19:25.920 --> 0:19:28.600 don't want that. I think sometimes it's it's hammer looking 0:19:28.640 --> 0:19:31.159 for a nail when these technologies come up. But the 0:19:31.200 --> 0:19:33.720 actual human use or player use in our case of 0:19:33.760 --> 0:19:36.920 these technologies, UM, I think there could be some interesting things. 0:19:37.240 --> 0:19:39.760 So let's talk about your priorities looking forward. You know 0:19:39.800 --> 0:19:41.200 you're in the middle of trying to do this really 0:19:41.280 --> 0:19:45.400 big deal. Are we going to see you keep doing deals? 0:19:45.440 --> 0:19:48.800 Are you still on the lookout for new studios or 0:19:49.119 --> 0:19:53.240 new geographic locations where you want to build out Microsoft's 0:19:53.400 --> 0:19:59.159 gaming presence. Definitely. On the second part, geographic expansion is 0:19:59.320 --> 0:20:02.320 critically im We've hired our first people in Nigeria. Now 0:20:02.440 --> 0:20:04.840 as part of our team, we have teams in India, 0:20:05.040 --> 0:20:07.480 teams in South America. You know, again, when I talk 0:20:07.520 --> 0:20:10.359 about three billion gamers, I'll just use Africa for a second. 0:20:10.400 --> 0:20:12.880 Like one point two billion people in the continent. Average 0:20:12.880 --> 0:20:14.920 age is what twenty or twenty one. I think it's 0:20:15.160 --> 0:20:17.919 very very likely that the next big hit games that 0:20:17.960 --> 0:20:21.520 we're going to see are not from the traditional locations, 0:20:21.560 --> 0:20:24.280 not from the traditional people, and I think that's fantastic. 0:20:24.359 --> 0:20:27.159 So geographic expansion is critical. Cloud is important to that 0:20:27.200 --> 0:20:29.439 as we put our data centers in places and we 0:20:29.480 --> 0:20:32.600 can not only distribute the games, but allow creators to 0:20:32.680 --> 0:20:36.480 use our cloud development platforms to build games without having 0:20:36.480 --> 0:20:39.040 to have the local hardware right there in their house 0:20:39.160 --> 0:20:40.800 or in their office to go build. I think that 0:20:40.920 --> 0:20:43.119 is important. So we're gonna do a little rapid fire. Okay, 0:20:43.280 --> 0:20:46.679 what video games are you playing now? Cult of the Lamb, 0:20:46.880 --> 0:20:51.360 most important meeting you've ever played a game in? You're 0:20:51.359 --> 0:20:53.440 trying to give me in trouble but games. Have you 0:20:53.440 --> 0:20:55.080