Destructoid Checkpoint: The Next 100 Days

Because the games industry is designed around the concept of entertainment, the nature of news related to it is often filled with twists and turns, heroes who become villains, and redemption or damnation stories. Sometimes they all play out at the same time, about the same thing. 

The Xbox redemption arc is over?

Xbox has been on a tear since replacing its upper management, ousting former head honcho Phil Spencer and replacing him with Asha Sharma. Sharma hit the ground running, despite a deluge of people wondering who she was and how she could even hope to run the company, as well as plenty of folks just not liking her because she was a woman. 

She quickly identified the price and value of Game Pass as an issue, reducing the cost to consumers, did some quick rebranding to make Xbox a bit more green again, and recently even pulled a switcheroo, turning Gears of War E-Day into an Xbox exclusive again to show the loyal Xbox fans that they are willing to keep some things away from the competition. 

Now, that detail is a little more complicated, as it appeared to be a last-minute decision due to the presence of a PlayStation logo in a trailer, but Xbox execs and developers at The Coalition are all saying it wasn’t; they just kept it super secret until the recent Xbox showcase. According to Xbox VP of Games Marketing, Aaron Greenberg, they just wanted players to know first, and kept the knowledge to a small internal group. 

The last 100 days at Xbox have been described as fast-moving and very energetic, but we are also seeing mistakes like this, and Xbox CSO Matthew Ball retweeting someone saying that Asha Sharma should stop talking and only Ball should be allowed to speak. He quickly removed the retweet, saying it was just an error while he was trying to talk to people about console gaming. 

I’m sure that tensions are high at Xbox right now. They have just had a major shift up, know that their business is limping, and are clearly under pressure to succeed. They also had another big secret that they were keeping: layoffs.

That’s right, ever eager for the future, hungry to take the top spot from Sony, and trying to win back fans with good behavior, Microsoft is opting for layoffs at Xbox. For the curious, Xbox made about $23.5 billion last year, while Microsoft made around $320 billion. As you can tell, they are hurting for cash.

This is the “right-sizing” that we spoke about a couple of weeks ago in relation to Bungie, and is further evidence that you are never really in the clear in modern business. Layoffs used to be a terrible thing for a company, sending shockwaves through the market, but now shareholders just see them as a positive.

Worryingly, in a post to Xbox Wire made after news of potential layoffs leaked, Asha cites the loss of half a billion dollars a year in revenue as a major issue. While the impact of COVID on most markets is over, the economy is punishing for most people right now, as rising prices across rent, bills, and food are leaving consumers with far less money to spend on gaming. 

Microsoft is well aware of this, as the letter goes on to describe the pressure that Xbox is feeling with regard to next-generation hardware. Console storage component costs have increased fourfold since last fall, and they expect them to continue rising. RAM has gone up in a similar way, and GPU costs won’t be doing them any favors either. At this point in her letter, Asha is more than happy to drive the bus over the previous leadership team, stating, “While the entire industry is facing a components crisis, we believe we have been impacted more greatly than many of our peers due to the choices we made over the last half-decade.“

Due to this, they don’t expect to be able to adequately meet console demand, and will need a “new business model and partnerships” to pull off Helix. From this, we can somewhat conclude that Phil Spencer and crew were perhaps getting ready to go all in on your ability to rent compute resources rather than own a console. That’s a vision of the future that I personally despise. 

All big projects like this start out with quick wins, things that are easy to do, and don’t cost much, and have a quick positive impact to get everything going in the right direction. That’s what we say in the first 100 days. The next 100 days of Xbox will be the harder stuff. Letting people go, probably canceling some games that are not tracking well based on market trends, and most likely closing some studios. The argument will be that the weak will die so the strong can live and succeed. 

It’s actually valid, just massively unpalatable, and is about as far from a quick win as you can get. This is deciding how 5-7 years of business will play out, as Xbox leadership will not want to be in the position of needing to call too many audibles. Xbox is about to enter its Bad Guy era, because studios you like, employees who did good work, or a studio you are a fan of are about to end up on the wrong side of the balance sheet.

What’s happening, Destructoid?

Andrej Barovic talks about AI use in Tomb Raider: Legacy of Atlantis. - “Generative AI is a cop-out, and I will never stop saying that. All this technology can do is create the average of all inputs, never steering even slightly toward innovation. And that seems to be enough for many game development studios nowadays, who have supplanted experimentation with “generative visualization” that only serves to embed averages into their minds.”

Tiago Manuel has some thoughts on the Resident Evil Veronica remake. - “Resident Evil Veronica, the remake of the weirdly-titled Resident Evil Code Veronica, or the even weirder Resident Evil Code Veronica X, looks great. Still, Capcom sure has to retool its awful cast of main characters to make it palatable to modern audiences.”

Scott Duwe takes a look at all the recent announcements to decide who won and who lost. - “The XBOX Showcase was chock full of many games and announcements, too, with a little something for everyone to look forward to. Granted, the company had a lot of ground to make up, so it feels like the only direction was “up,” but this event felt like a good start in reclaiming the brand’s glory after numerous missteps over the past few years.”

And that’s it for this week.