[georgeecollins]

Sure, 3% is terrible. But the point is you spent a fortune buying all these studios-- aka key strategic intellectual properties-- and then you manage them badly. Then you just sell or shut them down at their absolute bottom and you end up just destroying value.

Older forms of media understand this. WB loses money and its still really valuable because people see the potential of Batman, Harry Potter etc.

IP studios are really valuable because they can drive attention to your platforms. Try starting a premium streaming service or a console without IP. But you can't manage it like tech. It's not going to grow all the time and returns are uncertain.

MSFT could be in the XBox as a platform business. They could have a few in house studios to prime the platform pump. Once it started being a content business they got lost.

[corimaith]

The mismanagement here was actually Microsoft giving studios free reign and they flopped with projects like Starfield. This needs to be understood really within the larger industry trend of quality decline of AAA, which I suspect has to do with changes in overall dev culture and discourse than corporate decisions. There hasn't been a time when developers have been more disconnected from their audience than now.

[healsdata]

> There hasn't been a time when developers have been more disconnected from their audience than now.

There are studios that routinely put out games that people love. For example, my wife and I will happily pre-order the next co-op game from Hazelight Studios. FromSoftware, Ghost Ship Games, and others fall into the same boat for many people.

The difference, in my opinion, is that games from these studios don't focus on creating an "always on" service, microtransactions, day-1 DLC, MRR, etc. Those things that blight games made by corporate studios are evidence of corporate executives putting their thumb on the scale.

There's only so much you can do, as a developer, to polish a turd.

[bmurphy1976]

With the obvious exception of Elden Ring, most of the games from these studios are quite modest small to medium sized projects.

I wish devs would stop trying to make every game an uber-game. They need all the monetization because they've already blown the budget before work even started.

Nintendo figured this out. When will the other big players?

[brianwawok]

Nintendo is selling first party games for $80. No thanks.

[TheTon]

At one point you could have said the same thing about Blizzard, that everything they did was gold. It’s hard to pinpoint where they went wrong, but it’s not clear to me that it was business model or game format related. Like, WoW was a fabulous success from day 1 and it was a live service game.

[gmadsen]

It was when the amount of lattes overtook the amount of Mountain Dew

[account42]

For games like Starfield, monetization isn't even the main issue but rather political ideology. You can only do so much ESG-approved preaching before customers go elsewhere.

[tpxl]

For games like Starfield, the problem is the game is bad, it has nothing to do with politics or ESG.

[teachrdan]

> There hasn't been a time when developers have been more disconnected from their audience than now.

I'm curious what you mean by this. It seems like gamers have never been more vocal and there have never been more avenues (social media, short form video platforms, etc.) for them to voice their opinions than we have now.

How exactly do you know that developers have never been more disconnected from their audience? And how would that be relevant to declining AAA game quality when it's the responsibility of management and leadership to ensure the quality of the final product?

[techpression]

I think developers = studio in this case, management included. It’s the same issue as Hollywood really, making content for a loud minority will not generate revenue. Compare how Marvel Rival performs to any Marvel Hollywood content after Endgame.

[RedComet]

The squeaking [spare] wheel got the grease.

[account42]

One way is developers making game for far left silicon valley ideologes when their audience is full of horny young males. I.e. the game is primarily designed to push an agenda rather than be fun.

[teachrdan]

> far left silicon valley ideologes [sic]

This is a trope that's more than a few years out of date. Silicon Valley is run by Mark Zuckerberg, Peter Thiel, Marc Andreessen, Elon Musk, and many other executives who are completely devoted to the current administration; even Tim Cook bent the knee and donated $1 million to Trump's inauguration.

And what does "far left" mean in this context? Is it the abolition of private property and the creation of a communist utopia? Or are we talking about basic equal rights and a slightly more progressive tax system?

Without a bit more clarity, comments like yours come off as being uninformed at best, ignorant at worst.

[georgeecollins]

Free rein is bad management by definition. You don’t need a manager to have free rein.

I’d be curious what you think the changes in dev culture are. I have worked for or with a lot of these studios and to me they have different cultures. But I could be missing the forest for the trees. MSFT has one culture that imo lacks a creative vision.

[venzaspa]

Depends, Tesco (the UKs largest supermarket chain - one of the largest in the world) on average net about 2.5-3% profit on a given year and they have to do a lot more than pump out a game or two every few years.

[georgeecollins]

The thing to understand here is the risk premium. Tesco is less risky on many levels. It also does not live inside a tech company that has really high gross margins.

[coffeebeqn]

I just don’t know how great the IPs at Xbox game studios are. They have a few staples but most studios they bought have struggled to put out any major successes in the last 5+ years. There’s only a few Pokémon’s and Harry potters out there. They even ran Halo to the ground ffs

[dd8601fn]

I assume a bunch of them print pretty reliably, like Call of Duty, when you're not using them as a loss leader on an expensive subscription that nobody wants.

[ChrisRR]

That would be King

[chocochunks]

They own Minecraft, Call of Duty, Elder Scrolls, Fallout, Doom, Diablo...