Xbox exec calls the metaverse a ‘poorly built video game’

Put a microphone in front of Phil Spencer and the guy will always deliver.

Spencer, who you may or may not know as the head of Microsoft Gaming (he’s in charge of all things Xbox), sat down with the Wall Street Journal at its WSJ Tech Live event for a wide-ranging interview about everything from Microsoft’s plans for mobile gaming to Spencer’s personal feelings on the metaverse. Spencer is one of the few industry leaders who actually gives real answers to questions on occasion (and comes across as “one of the good guys” for it), so let’s break down the highlights.

Metaverse catching strays

Undoubtedly the funniest thing Spencer said at WSJ Tech Live came at the expense of Meta’s Mark Zuckerberg-fueled metaverse efforts. As you can see at about the 1:15 mark in this clip from the WSJ YouTube channel, Spencer seemed to take a bit of a jab at Meta’s work-focused metaverse, without naming names of course.

“It’s a poorly built video game,” Spencer said. “Building a metaverse that looks like a meeting room, I just find that’s not where I want to spend most of my time.”

It’s not difficult to connect the dots and see this as a criticism of Meta’s Horizon Workrooms VR app. Zuckerberg’s corporate ambitions have almost become synonymous with the word “metaverse” itself. That said, it’s not like Microsoft is shunning the concept entirely. Spencer is just one guy in a much larger corporate machine; Microsoft CEO Satya Nadella said earlier this year that acquiring Activision in a $69 billion deal would “provide building blocks for the metaverse,” whatever that means. Nadella also showed up at Meta Connect 2022 recently to announce Microsoft Teams (among other things) integration with Meta Quest headsets, so working in VR is part of Microsoft’s agenda to some extent.

Call of Duty on Switch?!

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Speaking of the Activision deal, a big part of that massive acquisition is the Call of Duty franchise. There’s been a bit of a war of words between executives at PlayStation and Xbox throughout 2022, as Sony believes Microsoft could eventually block the popular shooter series from releasing on PlayStation consoles at all. It’s been a sticking point for global market regulators who are in a position to potentially block the merger from happening if it proves too monopolistic. 

For instance, the U.K.’s Competition and Markets Authority recently asked the public to weigh in on whether or not Call of Duty going exclusive would be bad for customers.

Anyway, Spencer tried to calm the masses at WSJ Tech Live, claiming the company wants Call of Duty on every platform, even the Nintendo Switch. That’s fascinating because Call of Duty has yet to grace Nintendo’s hybrid handheld console, potentially due to its relative lack of graphical horsepower. According to Spencer, that may change in the future.

It’s also an interesting comment because it seems to position Microsoft as being magnanimous with its newest toy, despite the fact that keeping Call of Duty multiplatform would merely extend the status quo.

Remember kids, corporations aren’t your friends.

Mobile ambitions

This is where the real money lives.
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Spencer also spoke about Microsoft’s mobile gaming plans (the video is available on the WSJ website), which right now mostly extend to cloud streaming Xbox games to Android devices and iPhones via the Xbox Game Pass subscription service. However, another huge part (arguably the biggest, at least monetarily) of that Activision deal is the inclusion of massive mobile games like Candy Crush Saga. If the deal goes through, Microsoft will rake in cash from a whole new marketplace that Spencer called the biggest gaming platform on the planet.

“We want to be in a position with content and players and storefront capability to take advantage of [mobile gaming],” he said. “Gaming is the largest form of monetization on mobile and we’re a gaming company.”

Interestingly, Spencer also spoke of the “duopoly” of Google and Apple controlling the only two viable mobile storefronts: the Google Play Store and the iOS App Store, respectively. Both businesses take 15 to 30 percent cuts of all in-app purchases from games on those storefronts. The Verge reported earlier this month that Microsoft wants to build its own mobile storefront, but we’ll see if that actually happens down the road.

It’s also slightly funny to see Spencer position Microsoft almost as an underdog in the mobile space compared to Google and Apple. For what it’s worth, all three businesses have market capitalizations of more than $1 trillion, so this isn’t exactly David vs. Goliath.

No Keystone, for now

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Another one of Spencer’s noteworthy quotes from the WSJ interview might deflate some hype you may have had for a rumored new piece of Xbox hardware.

Earlier this month, Spencer tweeted an image of a crowded memorabilia shelf that included a small white object on the top. This was largely thought to be Keystone, the codename for a streaming device Microsoft was said to be working on to facilitate Xbox gaming without expensive hardware.

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Unfortunately, Spencer poked a hole in the hype tire and deflated all the air. According to Spencer, that little object was indeed Keystone, something Microsoft had been working on internally. But in spring of this year, the company decided to pivot to working with Samsung to add a game streaming app to its smart TVs rather than continue work on Keystone. In other words, Keystone ain’t coming anytime soon.

Still, Spencer said it may only be a matter of time before something like that does come to the market.

“Will we do a streaming device at some point? I suspect we will,” Spencer said. “But I think it’s years away.”

Get your Xbox now while it’s (not really) cheap

Could either of the new Xbox consoles get a price increase eventually?
Credit: CHARLY TRIBALLEAU/AFP via Getty Images

Last but not least, Spencer talked about pricing on both Xbox hardware and Game Pass. The Xbox Series S currently costs $300 while the more powerful Series X is $500. Meanwhile, Game Pass is $10/mo for just console or PC games, or $15/mo for both plus the ability to stream games remotely. 

“I don’t think we’ll be able to [maintain current prices] forever,” Spencer said, per The Verge. “I do think at some point we’ll have to raise some prices on certain things, but going into this holiday we thought it was really important that we maintain the prices that we have.” 

Hardware price hikes in gaming are exceedingly rare, but so are the current global economic conditions. 

The reason Spencer’s comment is cause for concern at all is because Xbox would simply be following its rivals’ lead. The PlayStation 5 already got a variable price increase in every market but the U.S. ahead of this holiday season. And Meta recently bumped the cost of its Quest 2 headset up $100, so now it starts at $400. Microsoft and Nintendo both confirmed in August they wouldn’t be following suit, but that could change in the near future.

Don’t be shocked if Game Pass eventually goes up in price, though. It’s an absurdly good deal right now, but subscription services always cost more eventually. Just ask Netflix.

Between the deflating Keystone news, the hilarious metaverse commentary, and the potential horror of an Xbox price increase, there’s a ton to chew on with Spencer’s comments at WSJ Tech Live. Naturally, a lot of it makes Microsoft seem like the good guys despite being a gargantuan corporation with many of the same aims as its rivals. It’s fantastic what a little honesty can do sometimes.