Shulou(Shulou.com)11/24 Report--

Thanks to CTOnews.com netizens Fat Cat, for the clue delivery! CTOnews.com, Oct. 31 (Xinhua) Phil Spencer, head of Microsoft's games division, recently said that video games can withstand the test of economic weakness, even though the software maker expects the recovery in other parts of its consumer business to slow.

Microsoft offers Xbox consoles at various prices and offers XGP subscriptions for $10 or $15 a month. Phil Spencer said it set the best record for Xbox consoles in 2008 during the global financial crisis.

Rising prices and interest rates have sparked enthusiasm among investors eager to find pockets that can support financial markets in a recession. Games remain a top priority for Microsoft, which is working to complete its $68.7 billion acquisition of publisher Activision Blizzard.

Other technology companies may be at risk in a recession. Google's parent companies, Alphabet, which still relies on Internet search and Meta Platforms, which relies on social media, still derive most of its revenue from advertising. "the macroeconomic environment is challenging for most consumers," CEO Patrick Lo of network hardware maker Netgear said in a statement, reporting a 14% drop in annualized revenue on Wednesday.

CTOnews.com has learned that Microsoft is more diversified than these companies, although executives said earlier this week that the consumer segment would hurt sales of Windows operating system licenses, Surface PC and ads such as Bing and LinkedIn this quarter.

Microsoft Chief Financial Officer Amy Hood told analysts on a conference call on Tuesday that the company expects more users to join its Xbox Game Pass service, which provides unlimited access to hundreds of video games, this quarter. Amy Hood said game revenue should fall in a low to medium percentage range because of strong growth in the same period last year and the launch of first-party games.

Phil Spencer, CEO of Microsoft's gaming division, is optimistic about the future of the division.

"over the years, games have adapted to these issues in times of family economic instability," Phil Spencer said at the Wall Street Journal's WSJ technology live conference in Laguna Beach, California. "

Not everyone agrees with Phil Spencer.

"the video game industry has always been 'depressed'," Mat Piscatella, executive director of market research firm NPD Group and video game industry consultant, wrote in a tweet in July. "but every time this incident is mentioned, it will be said."

Piers Harding-Rolls, director of research at Ampere Analysis, a research firm, made similar comments.

"after two years of huge expansion, the game market is preparing to slow this growth a little bit in 2022 because a combination of factors undermines performance," he said in July. "

But Phil Spencer can point to Microsoft's own experience with the recession as evidence of his claim.

In 2008, Microsoft cut the price of Xbox consoles in various markets because of public interest in the Nintendo Wii during the global financial crisis. Robbie Bach, president of Microsoft's entertainment and devices division at the time, said: "digitally, in terms of game consoles, we have had the best holidays and calendar years in Xbox history."

In 2020, a brief recession coincided with the outbreak of the coronavirus, but this led people to stay at home and play more games, including on Xbox consoles and PC. "people around the world are turning to games to keep people connected and alienate society," Satya Nadella, Microsoft's chief executive, said in April 2020.

Phil Spencer says today Microsoft lets people choose how much they are willing to spend if they want a game console. The company offers a $499 Xbox Series X (about 3628 yuan) and a weaker $299 Xbox Series S, he said. Microsoft subsidizes the cost of each console from $100 to $200 (about 1454 yuan) and expects to make the money back by selling accessories and store purchases. If players are willing to pay $10 (about 73 yuan) or $15 a month to subscribe to XGP, it's up to them. Users can also buy games directly or play some games for free.

Phil Spencer says he doesn't think Microsoft can keep the price of games the same forever. But compared with other manufacturers' pursuit, they can provide an impressive amount of entertainment content. "people can play video games for hundreds of hours," he said. "

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