The console truce and gaming layoffs
Xbox games may come to PlayStation, while Sony's Helldivers 2 surges on PC
Xbox Head Phil Spencer fanned the flames of fan frustration this week when he alluded to rampant rumors that exclusives like Starfield might eventually debut on PlayStation, signaling a ceasefire in a two-decade console war.
The pivot would be as notable as it is unsurprising, given Microsoft’s multiplatform investment in its Xbox Game Pass subscription. With the PS5 outperforming the Xbox Series X and S, it’s clear why Microsoft would want to cast a wider net, even at the risk of enraging existing users who spent hundreds of dollars on a console expecting it to be the only home for franchise favorites like Halo.
Ironically, this outcome is the opposite of what the FTC argued would happen should Microsoft acquire Activision Blizzard. They alleged that Microsoft’s market dominance could incentivize them to take Call of Duty off PlayStation. Now, Microsoft appears keen to bring even more games to their ostensible competitor.
One acquisition fear has come true, however. Microsoft cut over 1900 jobs last month, many at Activision Blizzard. I booked Bloomberg’s Jason Schreier on Here & Now to explain the economics:
“During the pandemic, game companies saw their revenues go through the roof as people were stuck at home playing games,” says Schreier. “A lot of those companies saw money coming in and thought it would last forever and expanded accordingly. When the pandemic abetted and people returned to their normal lives and slowed down on game spending, those companies suddenly found that they were too big and had gotten there too fast.”
The layoffs at Blizzard Entertainment also came after the company started clamping down on remote work, leaving relocated ex-employees stranded in expensive cities like Irvine, California.
“They’re stuck someplace where their rent is a lot higher than it might be if they were living somewhere else and working remotely,” explains Schreier.
Incidentally, Schreier’s coming out with a book about Blizzard. Having just caught up with Blood, Sweat, and Pixels and Press Reset — I can’t wait to hear about the dysfunction, triumph, and tragedy he’s made a reputation out of unearthing.
Meanwhile, Sony’s held onto PS5 exclusives like the upcoming Final Fantasy 7: Rebirth, but it’s also launched titles like this week’s Helldivers 2 on Steam to great effect. And other giants are also getting together — Disney just announced a $1.5 billion investment in Epic Games’ Fortnite.
Other Here & Now Mastromarino productions
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Also of note: NPR “founding mother” Linda Wertheimer is retiring. I had the pleasure of working with her when she guest-hosted Weekend Edition and will always remember how the staff fretted about her whereabouts one Christmas morning before she showed up late with a huge apple pie. Naturally, all was forgiven. She’s truly one of the greats.