"Well, let’s just start with console all-up, and maybe this is vocabulary but it’s how I think about it. Let’s say the gaming industry right now is $200 billion, and maybe growing by 9 or 10 percent. That is probably a 2021 number, but let’s just use that. If console as a business is flat, and PC is basically flat, yet it’s still growing at 9 or 10 percent, that means all of the growth is happening in mobile.
Phil Spencer: Activision Blizzard Acquisition is More About Growing Mobile Than Call of Duty - News
by William D'Angelo , posted on 15 November 2022 / 3,625 ViewsMicrosoft Gaming CEO Phil Spencer in an interview with The Verge's Decoder podcast discussed mobile gaming and its importance for Microsoft going forward. The tech giant is in the middle of acquiring Activision Blizzard, which includes Candy Crush publisher and developer King, as well as a number of other titles like Call of Duty: Mobile.
"The number that’s not in the Candy Crush/King number is Call of Duty: Mobile and Diablo mobile, which are big franchises that exist in that Activision and Blizzard bucket that are also major players on phones," said Spencer. "Yes, the idea that Activision is all about Call of Duty on console is a construct that might get created by our console competitor and maybe some players out there."
He admitted that Microsoft is irrelevant in the mobile gaming market right now and even after five or six years of increasing their presence on the PC market they still have work to do.
"I don’t think anybody needs that quote from us to understand how irrelevant we are at mobile. Right? Anybody who picks up their phone and decides to play a game would see that on their own. For PC as well — our trials and tribulations over the last five, six years in PC gaming are well-documented, and we continue to work at it. I love the work that the Xbox app team and our PC studio have been doing, but it takes time. I think one is just an accurate snapshot of where we are.
"In terms of the Activision opportunity — I keep saying this over and over, and it is true — it definitely starts with a view that people want to play games on every device that they have. In a funny way, the smallest screen that we play on is actually the biggest screen when you think about the install base in a phone.
"That’s just a place where if we don’t gain relevancy as a gaming brand, over time the business will become untenable. We’re not alone in seeing this; this is true for any of us. If you’re not able to find customers on phones, or on any screen that somebody wants to play on, then you really are going to get segmented to a niche part of gaming where running a global business will become very challenging."
Spencer says the console and PC gaming market have remained flat, while the overall gaming industry is growing at nine or 10 percent. This growth is happening in the mobile market.
"This has been true if anybody looks at the numbers for five or six years; all of the growth in gaming has actually come on mobile phones. As a percent of the overall gaming business, console business is shrinking, because the overall business is growing while console stays relatively flat, as does PC.
"Then when you look at the largest gaming companies out there, Tencent being the biggest gaming company in the world, so much of their revenue comes from mobile. They put their business success that they have earned through their work into the market, acquiring other studios at a very fast rate.
"It puts a lot of us out there, who are maybe traditionally segmented to one screen and one device, in a position of, 'Okay, if you play this out over 10 years, if console itself will not grow, PC will grow in certain years and not others, and mobile will continue to grow, how do you continue to run the business and stay competitive with others that are out there acquiring talent and building new business models, new distribution, and new franchises?' It’s critical that if you’re trying to run an at-scale global gaming business, you meet your customers where they want to play, and mobile is more and more that place.
"Now, in addition to that, there’s also creative capability around social, casual free-to-play on mobile. I also think our studio organizations need to be great at building many different kinds of games that many different kinds of players play. Not to downplay the great success that we’ve had over the years with the games that we love to build, but in running a business like Xbox, you need to be globally relevant to anybody who wants to go play."
Spencer added that there is more demand for Xbox consoles than ever before, however, they are in third place as PlayStation and Nintendo are also seeing more demand.
"Well, on console, I think you could admit that both can be true," he said. "We can be in third place and have more demand than we’ve ever had. That’s completely possible, because I think the other console manufacturers are also seeing more demand than they’ve ever had."
Candy Crush publisher and developer King makes more money than Activision and Blizzard.
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012 and taking over the hardware estimates in 2017. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel. You can contact the author on Twitter @TrunksWD.
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11 Comments
That's sad King makes more money than Activision or Blizzard lol. We're going on and on about CoD, but the real money maker is Candy Crush xD
Sure it is
Well I think the acquisition is for all the parts: Candy Crush, WOW and COD.
He's correct, which is why I am so surprised at the regulatory fixation on Call of Duty. The console market is fully mature and has 2 players in firmly entrenched leadership positions, with Microsoft in a(n often distant) 3rd place.
Sony has done a very good job of framing it as CoD play. Many gamers and the gaming media have also made that mistake.
AnB make the perfect games for GP. Putting games like WoW on GP will be one of the best decisions ever made
He's right that all of the growth WAS on mobile. But in fact, mobile gaming is starting to slow down as well. Unless he has plans for something bigger for mobile gaming, he needs to realize quickly that mobile gaming is already stagnated. Another thing to realize is that majority of mobile game revenue and population comes from the east. I don't think these acquisitions are exactly effective towards Asia, Microsoft's weak point in gaming is the Asian market.
