Satya Nadella Says Microsoft’s Office Playbook Will Turn Xbox into a “Fantastic Publisher”

Microsoft CEO Satya Nadella discussed Microsoft’s gaming strategy and next-gen console plans during an interview with TBPN yesterday. The new interview follows recent comments from Microsoft Gaming CEO Phil Spencer and Xbox President Sarah Bond, who both hinted that Microsoft’s next-gen Xbox console running Windows, just like the freshly-released ROG Xbox Ally handheld.

First of all, Nadella expressed his excitement about Microsoft becoming a major gaming publisher following its acquisition of Activision Blizzard. During the arduous process to convince regulators that the deal wouldn’t harm competition, Nadella explicitly said that he had “no love” for console exclusive games. “If it was up to me, I would love to get rid of the entire exclusives on consoles, but that’s not for me to define, especially as a low-share player in the console market,” Nadella said back in 2023.

“The way we are thinking about gaming, first of all, we’re the largest publisher after the Activision [acquisition.] We want to be a fantastic publisher, but we want to take a similar approach to what we did with Office,” Nadella told TBPN yesterday. “We want to make sure whether it’s consoles, PC, mobile, or cloud gaming or the TV, we just want to make sure games are being enjoyed by gamers everywhere.”

The Office parallel is interesting considering that the gaming and productivity industries don’t have much in common, but Nadella apparently disagrees. It’s clear that Microsoft releasing all of its games on more platforms will help the company make more money, but this is already harming the company’s Xbox hardware business, with US retailers like Costco recently stopping to carry Xbox consoles.

Regarding Microsoft’s Xbox hardware, Nadella said that he’s “very looking forward to the next console,” and the exec also believes that Microsoft can offer the best of the console and PC worlds. This vision isn’t fully realized yet on the ROG Xbox Ally, but the next-gen Xbox will reportedly support current-gen Xbox Series X|S games and backward-compatible OG Xbox and Xbox 360 games.

“We also want to do innovative work on the system side on the console and on the PC,” Nadella said to TBPN. “It’s kind of funny that people think about the console and PC as two different things. At Microsoft, we built the console because we wanted to build a better PC, which could then perform for games. I kind of want to revisit some of that conventional wisdom. But at the end of the day, console has an experience that is unparalleled. It delivers performance that’s unparalleled that pushes, I think, the system forward.”

Lastly, Nadella echoed recent comments from Matt Booty, the head of Xbox Games Studios, who said in an interview with the New York Times that TikTok and movies were now competing with the gaming industry for mindshare. Nadella also emphasized that it was important for Microsoft to aim for high margins so that the company can maintain its ability to innovate.

“Gaming’s competition is not other gaming. Gaming’s competition is short-form video. So, if we as an industry don’t continue to innovate, both how we produce, what we produce, how we think distribution, the economic model, right? The best way to innovate is to have good margins. That’s how you can fund [innovation].”

You can watch Nadella’s full interview with TBPN on YouTube. Besides gaming, the Microsoft CEO also discusses the company’s partnership with OpenAI, his views on artificial general intelligence (AGI), and more.

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