XBOX Series X

Description :

Console Supply/Sales :

"The swell in usage in gaming was a surprise to us..." (As a result of the pandemic.)
"...supply is actually as big as it's ever been (console supply), it's that demand is exceeding the supply for all of us..."
"...at this point we have sold more of this generation of Xbox's, which is Xbox Series X and S than we had any previous version of Xbox..."
Game Pass Vs Transactions :

Spencer thinks it's important to have the option between subscription and transaction, that is the main difference between their business model and Netflix's for example.
"...Transaction is bigger than subscription, subscription is growing faster just cause it's relatively new and with Game Pass we were one of the first kind movers in that space."
Gamergate, Steve Bannon, Free Speech and Polarisation In Gaming :

Kara Swisher : "What did the industry learn from Gamergate?" Spencer : "The point you bring up about the anonymity on the internet and what behaviour that unlocks for people that want to... kinda leverage those for what I'll call evil reasons. Is a great learning, one of the benefits we have on Xbox is that same account that you're using to log in and create your identity is the same account that all of your games are tied to. It's the same account your console is tied to and what we find on our network is that when people are misbehaving. We have a report function that is built right into the social connection that people create on our platform, if we ban somebody's account we really have the ability to impact somebody's gaming identity and what availability they have. Now there is work for us to continue to do in this space, I'm not trying to position this as a done effort. But it's somewhere we continue to invest, even in the fall we just bought a company Two Hat that builds a product called Community Civ. That is automated moderation tools on our network, so as all of the millions and millions of conversations are happening as you can imagine at some point for us to moderate this in an effective way it really has to be driven by the compute and cloud power we have and when we find bad behaviour and when we can ban and pause people's accounts and there could be a real ramification of that in terms of the gaming experience that they have on our platform."
Kara Swisher asked about Steve Bannon's involvement/opportunities in Gamergate and the connection between gaming and polarisation : Spencer : "...one of the things we have stated about our social network, we are not a free speech platform we are a platform around interactive entertainment and video games and we're not there to allow all kinds of social discourse to happen on the platform. That's not why we exist."
Kara Swisher : "Tell me, what do you mean by your not a first amendment platform? Meaning not everything goes, correct?" Spencer : "That's right, we're not there to allow any conversation to happen on our platform. Not to say it never happens...", "...I'm not judging what other networks do its just not what are network is about."
Kara Swisher : "But I would like you to judge that, who do you think is doing a better job on content moderation. The gaming industry or social media companies like Facebook and Twitter?" Spencer : "Ha ha huh, I think we all have a long way to go. You can tell me that's a lame answer, but thats it..." Kara Swisher : "Thats a lame answer..." Spencer : "We do... um, I will say..." Kara Swisher (jokingly) : "That's a lay up..." Spencer : "No I will say for gaming I love the transparency of our business model, if you like what you're doing your gonna buy a disc or buy a game or buy kind of an item in a game and that means that my business thrives when people are happy and our playing on our platform and they're investing in the content that's there. That's very different if I have a passive business model that maybe my customer doesn't even understand and I think some of that pure AD driven platforms that are out there. They get them so stuck in this model because some of the most tumultuous topics they can put out there are the things that drive the most clicks and those clicks are the things that actually drive the monetisation. We don't get payed on Xbox by how many times you click on something, I get payed by how many times your kids like Minecraft and I do think that transparency in the gaming space means that we have to be very very consistent with our customers because we almost have more of a subscription relationship with our customer. That if your logged into Minecraft tomorrow and had a bad experience, then you might never come back.... In gaming it doesn't help me if people are enraged by Halo, it's a death strategy for me."
Xbox Live Moderation and Cross Network Bans :

Kara Swisher : "Talk about the process when someone gets harassed on Xbox Live, what is the process? and is there a way to design these platforms to avoid these toxic platforms?" Spencer : "So we have a couple things, in the background we can monitor the sentiment of a conversation and the AI does a good job of highlighting when a conversation is getting to a destructive point. We have automated tools that will actually flag a message thread and we will give the people in the thread a note that says hey this is getting to a point where we see it's becoming destructive so either calm it down or we're going to shut down the conversation. There is a report a user button that is built right into the user interface, so if our behind the scene tools aren't following or if somebody does something we can't catch and you want to report then you report it and it comes into our systems we have a full team of policy and enforcement that follows up on those."
Spencer : "We've invested as MS in so many of these technologies, we share these technologies with other gaming partners out there. I don't think gaming wins by one platform being kind of safer and other platforms not being safe because to the uninformed gaming is gaming it's a monolithic activity. Areas where I think we need to continue to make progress, when I think about video and pictures and our ability to detect what's happening in a video conversation. We don't have as much of that, that happens on Xbox Live because it's not what it's about. But just as I think as an industry voice conversations and how do we monitor quickly? That's an investment that we have a lot of work going on right now."
Spencer : "You know something I would love us to see.... be able to do, this is a hard one as an industry is when someone get's banned in one of our networks is there a way for us to ban them across other networks or at least as a player for me to be able to bring my banned user list because I can always block people from my playing. I would love to be able bring them to other networks where I play, this is the group of people I choose not to play with because I don't want to have to recreate that on every platform that I play video games on."
Activision Blizzard Allegations :

Kara Swisher : "...What did you make of these allegations (Activision), when you first heard them?" Spencer : "...I always feel for people working on any team, my own teams, other teams... I think people should feel safe and included in any work place that they are in. I've been in this industry long enough to maybe feel more ownership for what happens in the video game space, and I'm saddened and sickened when I hear about workplace environments that cause such distress and destruction of individuals and teams and it's something that as an industry I think we can continue to make the investments we need to go make. But this should be an entertainment business, this should be about fun and competition and cooperation, and to hear stories of people working on teams that are destructive is just really hard."
Kara Swisher : "... what did evaluating all aspects of your relationship with Activision even mean, did it result in any action?" Spencer : "The work we do specifically with a partner like Activision is something that... obviously I can't talk publicly about, we have changed how we do certain things with them and they're aware of that. But I also, this isn't about kinda of for us as Xbox kind of virtue shaming other companies, you know Xbox's history is not spotless." Kara Swisher : "No, I think... Xbox there was an issue at the GDC where women were hired to dance on platforms." Spencer : "and I have no problem being very public about are GDC dance party moment, that was a painful moment in our history of Xbox. Some of the things that make me proud of that is how we came out it, the work that we did as a team. I believe we are stronger now because of that event, not that I would choose to repeat that event if I had that choice. I love the fact that my own team was some of the strongest voices out there on social talking about how this wasn't right, and then the work that the team did to come out of that and say this moment won't define what Xbox means. But rather will be a catalyst for us being better and growing, and that really honestly I apply most of my energy in that space and any of the partners that are out there... if I can learn from them or I can help with the journey that we've been on on Xbox by sharing what we have done and what we have built..."
Kara Swisher : "So finger wagging doesn't work?.... What do you do when you have a partner like this, because this is not simple stuff... (recounts specific Activision allegations)... Now what do you do when you have a problem like this in the game industry?" Spencer : "Well I think the first thing that we need to be able to do, is to have people feel like they can report and talk about whats happening. That goes to like I said the safety for people, and I have more kinda capability of that on my own team. That I'll just say in general, having open lines of communication where people can report on their lived experience on our teams has got to be so critical, and to get there it's a cultural effort of how do you build that trust. So people feel like when they whistleblow, when they raise their hand about topics that are going on that they won't face repercussions, rather they'll see action happen..."
Kara Swisher : "...what's wrong with punishing them for that? Like we don't want to do business with you unless you clean up. Now again these issues where back several years ago to, but under the same leadership Bobby Kotick who is the long time Activision CEO." Spencer : "I think in terms of interaction with other companies, things that we choose to do with our brand and our platform in coordination or not with other companies is the avenue that we have... to have an impact. I would say in terms of individuals that are in leadership positions at other companies, it's not obviously our position to judge who the CEOs are. CEOs are chosen by shareholders and boards, at Xbox I know who I'm accountable for here in terms of the business and the operations. It's my teams here, my management chain and that's the thing we continue to focus on, is to try and grow..."
Kara Swisher : "...Do you think you as an industry, not you Phil Spencer has to... or maybe Phil Spencer also has to think about this more?" Spencer : "Oh absolutely, yeah there is no question. Phil Spencer needs to think more about it, the industry needs to think about it. The representation on our teams, who the voices are that are making decisions that are leading. Is critical not only to our long term team dynamic, but the long term business dynamic and those two things are tightly linked. If you're talking about video games telling stories and sharing empathy between different groups based on me being able to tell my story through my lens and you can play that game. Voices that are telling these stories that are making decisions about what content shows up, about what content is right, has to be diverse in the broadest sense of that word in order for us to achieve the goals that we have in gaming."
Kara Swisher : "Do you think your future lies more in those games or in the big Call of Dutys?" Spencer : "The thing is in the gaming space is that something that starts small can take over, because it's not necessarily the production budget that leads to gaming success. It's actually the kind of creative capability gameplay capability of the teams..."
Gaming Addiction and China's New Rules :

A conversation about the discourse around gaming and addiction, including China's new rules around gaming and whether it's the companies or the governments responsibility. Spencer doesn't believe any sort of legislation around gaming is incoming, believes platform holders have a job/responsibility to provide tools to manage how people engage with gaming (plugs Xbox tools) and believes all industries need to realise moderation of any activity is a good thing. He doesn't think China cutting people off from video games is an effective way to stop someone from doing something, they will get around it with VPNs or networks to find gaming content they want to interactive with.