Microsoft‘s Chief Financial Officer, Tim Stuart, has told the Wells Fargo TMT Summit that the Xbox format holder eventually wants to bring PlayStation and Nintendo to Xbox Game Pass.Stuart revealed that the ultimate goal for Microsoft is to have all of its content and services “to every screen that can play a game,” and is part of a “mission” to generate high profits from the company’s gaming division.For us, when we think about the business, gaming as it relates to Microsoft and with Activision, operating leverage and margin expansion is definitely a piece of that puzzle.At the highest levels, you go from what was a lower margin third-party entity that we sold on our store to a high margin first-party business, so when you think about the Xbox component of Call of Duty, you go from that low margin business to a high margin business. Then what you do is you also expand and say, we’re now driving high margin sales on PlayStation, on Nintendo.Related Content — Sony PS5 Complete Guide — Everything Explained About PlayStation 5 For New Owners In 2023 While this may seem like a lofty ambition, it should be noted that Microsoft’s Phil Spencer previously seemed to hint at such a future, when he said that the company needs to think of PlayStation and Nintendo users as part of the Xbox community. One also has to consider how long Microsoft may be in the hardware business given how poor sales have been as of late.Microsoft landed a massive deal this year by acquiring Activision Blizzard, although titles such as Call of Duty will still remain on PlayStation platforms for the next decade. However, other big hitters such as The Elder Scrolls VI and the recently-launched Starfield are PC and Xbox exclusives. And that’s really, lastly, where we’re going in this business, is that expansion of operating leverage, where we think about placing our bets. First-party, subscriptions, advertising – those are all high margin businesses that we want to expand into. And what you’ll hear from us more and more is a bit of a change of strategy, and again, not announcing anything broadly here, but our mission is to bring our first-party experiences, our subscription services to every screen that can play a game.That means smart TVs, that means mobile devices, that means what we would have thought of as competitors in the past like PlayStation and Nintendo. We’re going to Nvidia GeForce Now, their gaming subscription service.[Source – Wells Fargo TMT Summit via VGC]
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