Microsoft CEO: Sony Has Defined Market Competition Using Exclusives - News
by William D'Angelo , posted on 01 July 2023 / 11,054 Views
Microsoft CEO Satya Nadella during today's Microsoft vs FTC hearing said he isn't a fan of exclusives, but the console market leader, Sony, has defined competition by using exclusives.
"I would love to get rid of the entire sort of exclusives on consoles, but that’s not for me to define," said Nadella. "Especially as a low share player in the console market that the dominant player [Sony] has defined market competition using exclusives. I have no love for that world."
Nadella added "it makes no economic sense or no strategic sense" to remove Call of Duty from PlayStation. "Our goal with Activision in particular, in their content and our content, is to get it on more platforms. That’s what we’ve done with Office and that’s what I want to do with gaming."
The Microsoft CEO is "100 percent" committed to releasing Call of Duty on PlayStation.
Speaking on clouding gaming, Nadella says it includes Xbox Live.
"Whenever I think about the cloud in the context of the Xbox pillars of content, cloud, and community, Xbox Live is part of the cloud," said Nadella. "So even when you're thinking about a console or a PC, the cloud is actually very integral to the experience. So it’s not just streaming alone when I think about the cloud, streaming is still part of that overall cloud."
Thanks, The Verge.
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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I would argue that Nintendo does that even more. Their entire platform largely relies on first and third party exclusives.
Nintendo and Sega started the exclusive games, possibly Atari I wasn't around for them. Sony and Microsoft are merely continuing the trend.
I think he is talking about the third parties tho. Nintendo is hardly doing that for third parties, Sony is the king and by a long margin for that
Third party exclusives were popularized by Nintendo in the '80s, when they essentially forced pubs to only release on Nintendo, otherwise they wouldn't be allowed to release on Nintendo at all. They were only able to pull that off for a few years. But, they went at it really hard while they were able to get away with it
Maybe in the 80 but I’m talking about today :) I mean okay I guess if we talk about ‘why’ we are here (which is what Satya was eluding) I guess we can go back at who established that habit :) so yah maybe Nintendo, Atari or even Sega?
If you want to argue to death again somewhere else, that’s fine. But it is not what this article is about.
It is about exclusives driving the market (first or third parties) and making it an absolute necessity if you want to compete in any way.
I guess Nintedo doesn't exist to them. LOL
The regulators have framed the case around Sony and Microsoft being the primary competitors in the segment of the market that they are concerned about. I am somewhat surprised that Microsoft hasn't focused more on Nintendo, trying to get them into the conversation. Because Microsoft's case looks a whole lot better when you include Nintendo in the market.
I argue that first party and second party exclusives creates competition tho and it's obvious why. Third party exclusivity deals, not. Without exclusives, huge companies with big budget can sell hardware for cheap until there's no competition. Even if you make innovative hardware, they can copy it and sell it for less. The reason why this Microsoft ceo dude is saying this is because they don't have good exclusives to sell their hardware, but have control over hardware that brings them money (Xbox and PC).
Think about it as a restaurant. Your food is the selling point, why should you share your special recipe to your competitors? McDonalds shouldn't be forced to sell their Bic Macs to Burger King. Local burger shops shouldn't be forced to sell their original burgers to McDonalds.
That's what Apple and Tencent and Google does. They limit applications to one store and take commission fees. We should talk about the toxic mobile market more.
Well if exclusives are so bad, then release games like Starfield, Halo, Forza and Elder Scrolls 6 on PS5 then. Oh wait, no reason to buy an Xbox then...
I honestly dont understand why console gamers are the only group in the entire tech industry that seem to think their fav platforms wouldnt survive without exclusives. I'd love to know why people buy Sony blu ray players or tv's etc over say Samsung ones and the same goes vice versa. Without exclusives it would be having better tech and prices that would drive hardware sales.
Yes, because there are so many groups. Console gamers, PC gamers and...............mobile?
Edit: Oh you said the entire tech industry. I dont think that would work anyway. I mean MS would just sell their console at the lowest price. They have billions to blow away on stuff. Nintendo and Sony would have no chance. Thats why exclusives are important.
I love games, but I prefer quality and quality of services, which is not mutually exclusive to being tied to a box.
I bought my PS2 simply because it has games that booted up fast, played DVD's and music. Same for PS3 (I even wanted to use it for Linux, but Sony straight up removed that feature entirely).
I bought my 360 because my friends were playing it, not because it had Gears of War exclusivity (I also liked the 360's UI at the time as well).
I bought my Switch for the portability aspect, just like how I bought nearly every handheld Nintendo system in the past over their console counterparts.
Same reason as above as to why I want a Steam Deck. I'm not buying because of a few exclusives (especially exclusives that end up on PC in one form or another).
You have to remember that not everyone on the planet wants or likes exclusivity. Some just like the ease of use, the services, or even the UI/setup, because it feels natural to them.
I primarily use Steam because of it's many features, including mod support, and GoG galaxy for playing older games that are supported on modern OS's, that Steam doesn't pick up (which technically counts as a service, not exclusivity, because some of those old games are even found on Steam, but do not function as well as their GoG counterparts).
The difference being that the services can benefit you in ways that entice you to buy games on said platform.
Steam originally had stupidly good flash sales, which in turn kept me buying more and checking daily.
Thanks to the new UI update Steam got, I am now making use of it's built in notepad feature, saving me having to constantly tab in and out of a game to look at guides or stuff I've jotted on notepad.
I'm not saying I'm a "smarter buyer", I'm just telling you that I'm not the type of guy that solely buys consoles for premium, tightly locked down exclusive games. I told you my prior history with previous gens, which should give you an idea of what I look for in a console.
The two biggest gripes I have with the Switch for example, are hardware based (Joycon drift) and store based (games with high price tags on their storefront), and those issues slowly over time got me to stop using my Switch entirely.
I originally bought the Switch purely to use as an indie machine and a new portable system on the go. The only exclusives I ever bought from Nintendo at that time were AC New Horizons, and BotW, and the former got shafted content wise compared to the latter, which got a sequel within the system's lifespan.
What's the point of consoles if there ain't any exclusive...
I agree. I seem to be in the vast minority when it comes to that. I think exclusives are what gives each platform their character and personality. I've always purchased all three, so for me, it would be a shame if every console had the same games.
For me personally, yes. I enjoy how each console has its own personality. I liked how, when I was a kid, the SNES and Genesis were basically oil and water. Same with PS1 and N64, or PS2 and Xbox. Gaming polygamy is more interesting for me than gaming monogamy. I've tried only owning one console for monetary reasons... it doesn't last lol.
cause it will be based solely on hardware and online quality . Thats what it should be like.
And I'm just sitting here, LMAO as all of those "exclusives" (they're not really) either getting day one - PC release or will eventually be released on PC. What a time to be a PC gamer.
It's kind of crazy honestly. I go back and forth between my PS5 and PC but it's crazy how far PC has come where it pretty much gets everything now. I just wish I could get the console like experience to be better on PC. It's very close but I occasionally run into issues that infuriate me and then I go back to my PS5. Then my PS5 infuriates me at some point and I go back to PC. It's a never ending cycle.
Here’s an interesting thought…..
Microsoft divests Xbox + all game studios entirely…..
…….scraps the ABK merger…..
…….then buys Sony.
Hell if you sold off the non music/tv/gaming side of Sony the price would probably be the same as ABK. It would get what it wants which is market share and then it could do what it wants, library studios etc plus security knowing that no other trillion dollar company would buy Xbox and compete.
Why does he say Sony, when it's technically Nintendo, the oldest player by far, and the one who remained standing, before Sony entered the ring.
All Sony has done is emulate what MS started doing when it entered the ring, which is to buy up studios, make IP's exclusive, publish IP's, retain some IP ownership that leads to future exclusivity, or simply buying out timed exclusivity, all of which MS has done before.
I'm not going to say Sony should get a pass, they have been super aggro with their deal the past 2 gens (but that's mostly MS's fault for absolutely dropping that ball during the Don era), but at the same time, MS basically allowed these deals to happen, even back then.
Only now do they do this, because the grip is so damn tight, that they can actively feel their face turning purple.
Nintendo dont pay to deliberately block games on other platforms. Rumours are saying in Japan Sony place rules to never release on Xbox.
They didnt need to back in the day. When they had almost monopoly, they threatend publishers with not allowing them to release games on their systems if they supported other platforms. Nintendo is no saint either.
Never said Nintendo were saints, but its thanks to Nintendo you have a console market in the first place.
Look at xbox the good guys : "Xbox signs exclusive Game Pass deals that block games from coming to PlayStation Plus, says a new court document"
Will we get a new article with this ? Nah , no need .🫰
Source?
https://web.archive.org/web/20230628161445/https://files.cand.uscourts.gov/files/23-cv-02880_FTC_v_Microsoft/PX8001_Redacted.pdf
Page 7: last paragraph.
"For instance, Microsoft and SIE both made competing bids for Valheim and Immortality to have those games on their streaming services. Microsoft won both bids.
Microsoft often requires that titles included on gamepass - particularly titles offered on gamepass the same day they are released- not be made available on other streaming services."
If thats true, its not good for them either. At least these are no name games being done on and not huge AAA games.
Back in the day Nintendo ruled with an iron fist. There was a reason why they were the one company out there that enforced the "deal of approval" sticker on games published on their platform at that time.
Current day, you do not see that sticker much if at all, but I have never seen Sony or MS ever enforce that sticker and general rule of thumb upon the industry like Nintendo did.
Also, like KL said, Nintendo had a history of threatening publishers with their platform, much like MS had their own threat with their EEE strategy.
He is talking about paying off third parties to keep a game exclusive. Not sure if Nintendo is doing that but if they do it is not even close to be fraction of what Sony is doing.
Heck Bethesda acquisition was to prevent further Bethesda AAA to be bought by Sony.
You can argue if the latest is true but at the center of is point, it is about that. Not about developing your own exclusives.
Of course Nintendo also paying it. All the Switch 3rd party games that aren't or weren't on Playstation or Xbox shouldn't be a problem running on them. I don't think sony paying as many as you think since most of these games wouldn't run or would be very difficult to port to switch and Japanese games on xbox just don't sell much especially in Japan
I think Nintendo have way less third parties than Sony. And for Sony I’m talking about all games they are paying that are not coming to Xbox.
I’m not defending Nintendo here :) just saying that Sony is the biggest culprit in my opinion as of now. We have the tendency to only look at AAA but sony buys a lot of exclusives even smaller ones.
Yes we know playstation have much more 3rd party exclusives but I don't think sony paid for all of them. Most of those games would be very hard to port to switch and a lot of developers especially Japanese think their games wouldn't sell enough to port them to xbox
I wouldn't exactly say they don't pay third parties to do that, seeing as how they once enforced their "seal of approval" rule upon the entire industry way back in the day.
His cited example was Call of Duty after and if MS acquired Activision, not solely 3rd party exclusives.
He's talking about exclusives full stop. Not only the ones 3rd party publishers agree to.
Sony was doing all of that in gen 5 on PS1 before Xbox ever entered the market.
Sony didn't actively pursue companies nor did they publicly go out of their way to buy them. They made a console that was attractive to anyone who wanted to make games (Famously using discs instead of carts, allowing Final Fantasy VII for example to be on the console instead of N64).
Making a platform that's attractive to developers and benefitting from it isn't the same as spending 68 billion dollars to buy the biggest game publisher.
Hell, even making deals to get games exclusive to your brand is like...Econ101. That's like, the whole point of making a business. To make money. and to make money, you make deals. You offer someone something that's appealing or pay money for exclusivity...it's seriously like the most basic level understanding of business and economics. I have no idea how people are demonizing Sony for this.
Exclusives give a console its identity. IT sells the brand. IT's important. I am baffled that people don't understand this because waaaaaah my chosen brand isn't winning!
I was mainly referring to a few instances from Sony in gen 5 that go against Chazore's point that Sony now is just copying things Xbox did in the past, when Sony was doing those things in gen 5 even before Xbox entered the race:
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3rd party timed exclusivity deals- Sony paid publisher Eidos Interactive to make PS1 the exclusive console of Tomb Raider 2 from 1997-2000, after the first game had released on Sega Saturn.
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Heavy usage of 2nd party deals in order to gain exclusive IP's- When Sony entered the market they used money to convince multiple developers to abandon multiplatform or Sega/Nintendo exclusive development and instead make PS1 exclusives. Some of those studios they later bought after those IP's turned out to be successful. Sony's heavy handed use of money to win over formerly multiplatform or Sega/Nintendo exclusive devs was one of the main contributing factors to Sega's demise in the console market.
You are right that some of the developers they won over were won over merely by the disc drive, such as Square Enix, rather than by a usage of money. But there were many others instances where Sony used their massive cash reserves (relative to Sega and Nintendo at least) to buy their way into the market. Xbox was only copying moves from Sony's own playbook when they used money to buy their way into the market with the original Xbox console, they were just too late to the party, after Sony had already established a dominant stranglehold on the market through the popularity of the PS1.
Says the guy in 3rd place.
If in 1st place, then I'm sure he would say exclusives would be great and need more of them. No different in how Sony and Nintendo have always thought.
I keep hearing people say we need to do away with exclusivity. BS! It’s the lifeblood of competition within most industries.
For instance, I’m a bank manager. We have different rates than our competitors in order to entice the average consumer to bank with us. If nothing made us different than our competitors then why should we even exist?
If all consoles churned out the exact same games they’d all lose! You know why? No person would own 3 or 4 different consoles. Right now I know quite a few people who game mostly on a certain console, and own a 2nd console for its exclusives. That’s how it should be!
Do you need to buy a box to watch Disney plus and another box to watch netflix?. Like you say about being a bank manager your not giving anyone exclusives your giving them better deals and thats what drives people to your platform if the was no exclusives.
Wow is this guy out of touch !!!!
Wow-talk about the pot calling the kettle… Microsofts problem is they were doing this during the XB360 days instead of building up their own studios. They chose to buy instead of create and now their in a bad place looking for charity. They only have themselves to blame!!!!
Then what sense does it make to block the whole Bethesda catalog from Playstation now? Make up your mind.
FCC obviously intends to block this acquisition. Why people think this was nothing and CMA was the only major obstacle is a head scratcher.
So old Phil ( the smiling knife) Spencer was just telling lies again to kinda funny last month.
Literally the only reason Xbox brand became popular in any way is due to huge money exclusivity deals. Spare me the crocodile tears. Sony has every competitive right to do the same thing, plus they make amazing games organically, hence why they are the more popular brand all around...
Exclusives are the life blood of consoles. They are what give a console its identity and the primary factor involved in drawing customers. Without it, the only thing that'd matter would be specs and I'm not sure if you noticed but games are more than the sum of their pixels.
Gettin' real sick of people bitching about exclusives. IT's almost like people have no idea what they're talking about and have no concept of what industry we're talking about. It's genuinely baffling to see people unironically thinking all games should be on all consoles.
Then again, when you're a company that can't seem to make and maintain good exclusive IP, of course you'd try to convinve your fanbase that exclusives are bad. But what do I know, I'm just eternally critical of Microsoft because of their continued failures yet I'm the bad guy.
Edit IT's also clear that Microsoft just wants to go after Sony. Wasn't it well known that Microsoft only got INTO the console space because they saw Sony do it a generation prior and wanted a piece of that pie? Like, this is clearly just some petty fight at this point; Everything Microsoft has done up to this point has been specifically targetting sony. They keep bitching about everything SONY does but doesn't complain when Nintendo does the same thing. They put their games out on Nintendo consoles but not Sony. IT's remarkably clear this isn't about what's right, it's about what will hurt Sony.
and I know some people will cry 'but Sony's doing the same thing' but...no. IT's really not the same thing. Sony having a great relationship with Square-Enix after decades of working together is not unreasonable. Buying Sucker Punch and Insomniac after decades of collaboration makes sense. It is NOT the same as Activision being bought by Microsoft. The scale of it plus the history of the companies make it a vastly different situation and anyone saying otherwise is oversimplifying by eliminating context just to justify their biases.
The condition of video game exclusivity today is really reminiscent of the movie industry situation up to 1950 or so.
Before the United States v. Paramount Pictures, Inc. case theaters were owned by production companies and displayed movies made by said entity in a very similar fashion then to how console manufacturer act today.
Of course, there are other factors to consider but exclusivity as of now is nothing but artificial and might just be holding back the industry as a whole revenue-wise and option-wise.
Your take on MS being there to hurt Sony is blatantly false though. MS has a better relationship with Nintendo simply because Nintendo is open to a better relationship with MS.
Anyway, always fun to see you again pin you're 'MS can't seem to make and maintain good exclusive IP' to which every time you're called out on this you justify by 'they are not good to me or 'they have not to reached X on Metacritic' which speaks volume about someone 'oversimplifying by eliminating context just to justify their biases'.
"Great relationship..." You really believe that?
I mean, you do not need to take "Econ101" to understand how business works...
If Sony offers money, Square-Enix will make a game exclusive, if Microsoft offers more money, Square-Enix will make the game exclusive for them then, and if Nintendo offers even more money, then Nintendo will get it. Simple as that, there is literally NOTHING else in the equation but money (or whatever the company can offer that at the end as a "$$$" value associated to it). And one of the main issue for Microsoft (and more specially the Xbox Business Unit) is that they need to shit WAY more money than Sony for the same exclusivity... Not because of some "great relationship" but because Sony has 70% of the market share and it would cost way more.
Sony, Square-Enix are NO different and do (and should) care about money first and the shareholders. Fans, want to believe otherwise but that's on them.
In short: More money => 'Greater relationship'
Also if you took "Econ101", you should also understand that Microsoft buying a company (Let's take Bethesda) to PREVENT Sony for paying for AAA exclusive like they tried with Starfield; is probably the only thing they can do at this point. Because the Xbox business unit (check your note about Econ101 to understand what that is) CANNOT counter-pay it because Sony is abusing its market position to get those deals and it would cost 3 times to Xbox for the same deal (and as we know they do not have the same budget than Sony), BUT Microsoft as a whole CAN buyout a company as this is not coming from the BU budget. That's something a lot of people has hard time to understand.
Poor Nadela, if not for the greedy Sony they would put Bethesda and all other devs they bought as multiplatforms.
When is Sony doing it?
You keep making fun of Microsoft for not doing that with some of their games (while a lot of them are actually multi platform) while Sony is not even open to the idea.
This is really getting old now…
Its this behaviour of "We need and want competition, but we also dont want them to compete" mentality.
