Hey, I'm Dan! I invest in startups at Madrona and write the DL, a weekly newsletter about tech in the Pacific Northwest

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How Microsoft Plays Games

For years we’ve thought about how gaming can help Microsoft and I want to turn that around and actually think about how Microsoft can help us succeed in gaming. -Satya Nadella to Phil Spencer


Speaking of Microsoft, Phil Spencer, Microsoft’s EVP of Gaming, did an interview with Stratechery last week, and it was a great look into why Microsoft is winning in gaming, while Amazon and Google are still trying to figure out why gamers aren’t excited about Luna and Stadia.


Here are my takeaways from the article:

  • Microsoft made the decision to make gaming a top level function 3.5 years ago, rather than a group that reported into Windows
  • The original goal of Xbox was “winning the living room” rather than creating the best product for gamers; today, the gaming strategy is built around players rather than what’s good for Microsoft
  • One of the most important meta trends right now is that players want to play their games on any screen they want, regardless of where they purchased the game
  • The three key areas where they are investing today are: (1) Content, (2) Community, and (3) Cloud for Gaming
  • Microsoft is selling the next generation of Xbox consoles with a $25/month “Xbox All Access” plan. They view this as a Game Pass subscription that just happens to come with hardware (but maybe it’s just because the execs get comped on Game Pass subs 😉)


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