The Real Competition is TIKTOK, Says the Largest Gaming Publisher

Microsoft’s CEO, Satya Nadella, had the fortune to be interviewed by TBPN, (Technology Business Programming Network) during a live stream where he gave his high-level insight on various topics, along with Microsoft’s approach to the future of their gaming business.

Nadella made a quick note to point out that following the acquisition of Activision Blizzard King, Microsoft is now the largest gaming publisher since the acquisition. However, he went on to say (similar to Matt Booty) that the true competition for Microsoft isn’t the competition that most would think about when it comes to the games' industry, PlayStation and Nintendo. But, rather short-form content such as TikTok and YouTube Shorts. Nadella went on to discuss his thoughts about the future of Microsoft and Xbox and their plans to be everywhere!

“Remember, the biggest gaming business is the Windows business,” said Nadella. “To us, gaming on Windows, and of course, Steam has built a massive marketplace on top of it and done a very successful job. So to us, the way we are thinking about gaming is, first of all, we’re now the largest publisher [after acquiring Activision].

“So therefore, we want to be a fantastic publisher, similar in approach to what we did with Office. We’re going to be everywhere, on every platform. So we want to make sure, whether it’s consoles, whether it’s the PC, whether it’s mobile, whether it’s cloud gaming, or the TV. We just want to make sure the game is enjoyed by gamers everywhere.”

“But at the end of the day, console has an experience that is unparalleled. It delivers performance that’s unparalleled, that pushes, I think, the system forward. So I’m really looking forward to the next console, the next PC gaming.”

“Most importantly, the game business model has to be where we have to invent maybe some new interactive media as well, because after all, gaming’s competition is not other gaming. Gaming’s competition is short-form video,” said Nadella.

“And so if we as an industry don’t continue to innovate, both how we produce, what we produce, how we think about distribution, the economic model, right, the best way to innovate is to have good margins, because that’s the way you can fund.”

There was certainly some critical feedback from the reveal of Microsoft’s unprecedented marginal growth plan of 30%, even though the average studio margin profits are closer to 12% in the industry. Many are displeased with the direction in which Xbox and Microsoft have taken in building their future. Some say Xbox is "dead," even though the latest handheld hardware, the ROG Xbox Ally, can’t stay on store shelves. Xbox and Microsoft appear to have a vision for their future hardware, creating a console that's closer to a PC than ever. But will they be able to land their vision, or flip-flip like previous years? TV, TV, Call of Duty, Call of Duty…