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Xbox's Matt Booty On Studio Acquisitions And Making Game Pass Valuable
One of Microsoft's major reveals at its E3 2019 press conference was the announcement that it had acquired Double Fine Productions, the development studio founded by Tim Schafer. Double Fine joins Ninja Theory, Obsidian, Playground Games, Compulsion Games, and a few others on the list of acquisitions. It begs the question: Why is Microsoft spending so much money on bolstering its roster of developers? The obvious answer is that it wants more exclusives to make Xbox platforms more attractive to customers, but, actually, there's more to the strategy than meets the eye. Following the Xbox press conference, we caught up with Matt Booty, head of studios at Xbox, to discuss this and more. How much are you aware of the audience you're trying to engage when you come onto the stage and you talk about Microsoft's portfolio of studios and games? Obviously you want to hype up or appeal to the core gamers but, when you've got a new platform, you also need to flex for the mainstream press, right? So in the last 20 years, the number of people playing games has tripled. So I remember in the 90's doing talks and saying, oh some games will be as big as music. And then, someday games will be as big as movies. And we've completely eclipsed both of those. And so now it's just crazy to see just how many people are playing games. And with our goal of reaching all two billion people that are playing games on the planet today, your point about reaching to a broader range of gamers you know really thinking about a whole bunch of games that people want to play with the community and friends that they want. We've all got different groups of people that we play games with and then anywhere they are. It's so important to us. Because games have become just a part of society now. I mean Phil had those words, Phil talks about how it can become kind of a unifying force for the world. But it's only possible because games have just become part of the fabric of life. Really we start planning for this show pretty early in the year and there's a lot of work by the teams that go into getting us here. And I can say that almost all the decisions that we make and everything that we end up putting on stage has more to do with the players and the fans than anything else. It's great if we just wind back a year or so. Last year I was talking about how [Xbox boss Phil Spencer] became part of our CEO's leadership team and the importance of gaming inside Microsoft. But given that, it's not like somebody comes in and says, "Make sure you hit these key points." And we have an amazing amount of support and with that support comes latitude to really talk about the games that we think are important to the players and share the things that are important. So between last E3 and this E3 you've been on kind of like studio acquisition run. What's the thinking behind that? Why are you guys out there looking to acquire studios? Yeah, so you heard a lot about what we're doing today in the briefing if we just kind of recap it. We start with games, sixty games. We have 14 first party games, 30 of those will be available in game pass and then we've talked about streaming and so we've hit that point, being home streaming, the cloud streaming. Then we showed a new console and there's a lot of stuff that we covered. Game Pass is the center of gravity for everything for us. The fans and the players inside Game Pass want content, they want games. So my job, really my goal, is to make sure that we're providing a steady stream of great new games into Game Pass. Right? So that if you become a Game Pass subscriber, you know that on a regular beat you're going to be getting great new games. And with the development time for games, I think it's a lot longer to make a game than it does even a full season of some TV shows, right? We need lead time. So it turns out that if we're going to keep that cadence going we just need a lot of people creating content. And that's really what's been driving it for us. Game Pass is still fairly new and the industry as a whole is still used to selling boxes. When you acquire a studio or when you speak to a development team how do you tell them what they're going to create this game, spend years on it, and you're basically going to give it away for free. Or we're going to give it away for a subscription fee, which feels nominal compared to the time and effort that goes in. How do you convince them that there's still value in that? It's a great question from the developer point of view. I love you're looking at that way. Let's go to something like, so you are the director of Game of Thrones and you've been making Game of Thrones and people watch through and HBO subscription and you aren't talking about ticket sales. You're not talking about movie theater opening box office, but clearly Game of Thrones has had a huge impact on pop culture, right? We can talk about Stranger Things going into Netflix. Same thing. For us, Game Pass in that conversation becomes much more about discovery and it becomes about how you can open up your game to a broader audience. It becomes about really delivering players to the game that those developers have made and a much broader audience. You know that is part of the equation that we acquire the studio and hopefully by doing that we remove some of the financial pressure on the studio. Tim Schafer, right after the briefing posted a video and he talks about how when he comes up with a game idea now, he doesn't have to go and spend all his time shopping it around to all the publishers looking for somebody to fund that. So hopefully we can take all the time that the developers used to spend having to do that and put that back into creativity. And if that's what Game Pass enables then I think that's great from a creative standpoint. We know for example that game pass can bring a lot of new people. We can tell just by looking at some of the information that we get that a lot of the people that are playing State of Decay 2 have really were never on Xbox before. So the fact that they can get in easily through Game Pass and ended up playing … I just love that. So I think it is certainly the case over the last 20-30 years you know as long as I've been in games. Everything used to be based on units right? How many units is that? And then we kind of got into this world where things like Metacritic and review scores started to matter. And I think now, it's really just, it's more about audience, it's about audience reach and how can you connect with the most number of people that are going to play your game? I think Game Pass is a fantastic place for putting your name in front of your players. I guess there's certain types of games where Game Pass is very obviously beneficial. Do you generally lean towards certain types of games that fit the bill for the service? You take a look at Bleeding Edge for example and something like Game Pass is perfect for it because it gets people to it and then they're engaged in a service based model with the game. One of the more satisfying things about Game Pass that we've seen is that games like Forza Horizon 4, that are in Game Pass and could be a traditional game with a pretty traditional structure, is doing fantastic in game pass in terms of people playing it and enjoying it. All the way through to Minecraft, which is also doing well. Same with Sea of Thieves. We've got State of Decay in there. So those games are all getting a lot of usage inside Game Pass which is great. For that reason we don't really prescribe what kind of game somebody should make. What we try to do is try to give them information, here's what we see in game pass, here's what we see doing well, here's kind of the way we think about it. And then we let the studios go after that. Again, I think for them, they're North Star more comes down to how I connect with players. How do get this in front of a bigger audience? So when you're making a studio acquisition, what exactly is it that you're looking for? Because you've made, recently, between Obsidian, Ninja Theory, and Double Fine. These are beloved studios that make fantastic games but seem like they've had a bit of tumultuous period of late. From an outsider's perspective, it may seem these acquisitions are a bit of a rescue effort. When we look at a studio, it's what I said on stage today, we really look at people, teams, and ideas. And in terms of people, we are attracted to and tend to have relationships with studios who share our vision of where gaming can go. So they see gaming as something growing in global popularity, they understand that gaming can be a unifying force that bring people together, and they are very player and fan driven. So when you think about just even when Ninja Theory, Obsidian, Double Fine they are all very very connected to their fans. So in terms of the people. In teams it is important to us, and one of the things that I really value is that studio like Ninja Theory, a studio like Double Fine, it's not that they just had one hit game, they have really stuck with it through success and through adversity. I think that says a lot about the character of the studio and also is a great indicator that they know how to run a studio. That they know how, they've got cohesiveness that they know how to stay together. It's a really different challenge and a different approach when you've got a game that maybe didn't do so well but yet you manage to keep your studio together and kind of dive in and get back at it. So to me that just talks a lot about character. And you look at Ninja Theory it's been around for 10-15 years you look at Double Fine for 20 years I mean Obsidian goes all the way back to the Interplay days. So these are studios that kind of been through it all and that idea is if you kind of connect the dots on the studios we've got and you'll see that we really are attracted to studios that have had multiple ideas. Because did somebody come up with a good idea? Or did they just get lucky? When I look at what Tim Schafer's done with, excuse me, Double Fine, it's clear that he knows how to create process to generate new ideas. So he's not sort of the one song wonder kind of thing. Same thing with Ninja Theory, look at the consistent games that they've put out. So that's really how we think about these studios. People, great people, share our vision, teams that have stuck together through highs and lows and then they've made more than one game. They've had many ideas. Now to your question about their financial situation. I think that is a reflection of some economic things that have happened in the games industry where we're seeing that there's a ton of activity and fantastic help at the level of our ID@Xbox program where you've got smaller teams making smaller games and I love that our ID program is a place where that stuff can come in and then we are very fortunate to have big franchises like Halo, Gears, Minecraft. There's this place in the middle that it turns out it's really hard to run a studio that's got 60-100 people. Now what you end up doing is having to put together a lot of different publishing deals, maybe having to take on work that isn't about games. You end up kind of having to really think about dovetailing and overlapping the resources in the studio, all of which, really at the end of the day, takes up time. So our approach is, hey if we can come in with a Tim Schafer, Nina Kristensen Ninja Theory, and if we can say, however much time you were spending meeting with publishers at GDC, however much time you were spending on other projects to help pay the bills we can make all that go away. And you can take all that energy and put it back into the games and the creativity. And I think we can unlock some things, right? So just like Undead Labs that we acquired last year, State of Decay 2, great games but you know that game started out for probably closer to the AA, indie, side of things and it's fantastic to think about Undead Labs being part of Xbox games studio. Because I think that we can give them the resources we can give them access to the other studios and we can help them take that next leap forward to what needs to happen to make their next game really big. That's really... we were just this morning having some conversations with some of the folks at Ninja Theory you know. How's it going? Go over and visit there this summer and we hear quite a bit about how we've managed to unlock the ability to hire key people. We've managed to bring a sense of security so some more senior people are willing to go work there. We've given them just resources to go take that next step. Now whatever that next step is, I think the production value on Hellblade was amazing. I mean that game was basically a AAA production value in a AA scoped game. But if you think about what can Ninja Theory do with more resources that's amazing to think about. This is a weird perspective to come at it from but how much of giving these developers unlimited resource, so to speak, changes the way they make games and the games they make? Hellblade is what is because of the restraints that were placed on Ninja Theory. It is a reflection of the limitations they had. How do you approach changing the ethos of the developer and the creators energy by bringing almost anything they want to the table? Does it change? We are really taking the approach wherever possible to leave them the way they were. And to really get in and do as little to that studio as possible post acquisition. And part of that does come down to sort of how they were operating and how they were working right? It is a little bit of a balance because I do want everybody in those studios to feel secure and I think that we can look at what we've done with Mojang as a proof point. We will come up this fall on the five year anniversary of the acquisition of Mojang and that studio is going as strong as ever. You saw Minecraft Dungeons that are in pre stage, we just announce Minecraft Earth a couple weeks ago. And the Minecraft team on stage at Apple WWDC. I think that that really is where some of my job and some of the studio head leadership job comes into, is how do we balance giving them the resource, now I can go get those four technical animators I wanted. Or you know now we can go do this crazy mo-cap session we wanted to do. Balance the new resources with... You know we don't want to lose that creative edge. I think that's a good question and it gets to the heart of what the job of the studio heads is, what my job is. I don't think it would be accurate to say that they've just got a blank check but your point is really well made. I think that really what I'm banking on to make sure that that doesn't happen is that there's so much stored creative energy that it's going to be a while before that starts to slow down. So one of the interesting things about these acquisitions is a rather gracious approach from Microsoft to allow these developers to still publish games multi-platform and fulfill existing arrangements. I really, I mean it starts and ends with the players. I would just feel horrible if I got excited and even in the case of something like Psychonauts 2 was a Kickstarter backer for game and then I found out that I wake up one morning and suddenly it's not playable on the thing I thought it was going to be playable on. We took that principle of player first in what we did with Minecraft. Minecraft ships on 21 platforms. Now that isn't to say we haven't done a lot of things just taking advantage of Xbox and taking advantage of things that only exits at Microsoft like HoloLens in the work that we've done there. But it really just comes down to the players and player choice. Whenever one of these happens it's like one of the first discussions that we have with somebody is yeah of course, if you've already got your PlayStation version in the way, we're going to let you keep making that. Or your kick starter fans expect this thing to show up on the Switch then we're going to go ahead and do that. How much does that factor into future games? Once Obsidian's existing agreements, same for Double Fine, are taken care of, is it like, "Okay this is a Microsoft game studio now and you're going to be making exclusively Microsoft games." If a developer comes to you and says, "Hey, I've got this idea for a game, I want it to be multi-platform." Is that something you'd consider? I think we would first of all look at everything on a case by case basis. It is, to be clear, the goal with these studios is to provide content for game pass and to provide support for all the new things that we talked about today. Everything from Mixer to Xbox live gold to Xbox... we've got the Game Pass Ultimate with streaming and everything. Our job as first-party is really to be there first with all of that. At the same time we have a great relationship with Nintendo, a great relationship with Sony, and if it made sense I don't want to rule that out but to be clear, our main mission is going to support game pass. Is there a studio out there that you would love to acquire and which one would it be? [Laughs] I can't answer that. When I talked about like people, teams, that idea is that so much of this does come down to relationships that we've built and people that we've worked with and I don't want to say that means it's somebody we've had to have worked with before in the past or something. And I'll also say that there's not some kind of, there's not like a list on my wall and I'm kind of checking them off one by one. That's kind of disappointing. I wanted a dartboard situation. [Laughs] I'm not just throwing darts. It really more because a lot of work and effort goes into getting to meet the studios, meeting the employees, spending time with the employees. We have a whole team of people that make sure that they've got everything they need. Somebody like [Ninja Theory founder Tameem Antoniades] building this studio ... Like that's kind of a big deal to then turn around and sell it. To me it's really more about let's focus on what needs to happen on that person to person relationship and let's focus on you know what we need to do to get everybody in the studio comfortable and to me that's a lot more important than thinking about what the next one might be. How much of a focus are you mandating these studios place on content for current systems versus content for Scarlett going forward? Is it, like, "Ok, start developing things for the next hardware and finish up what you're doing here?" So we really in that case again it's just about player choice. We want to make sure that we are hitting a broad audience and we want our fans to be able to play up and down four generations of consoles. So we want to have Xbox one support. But the advantage of being first party is that we have direct access to team working on project Scarlett. You know I sit in meetings, I'm part of those meetings. You know we can... One of the first things we did when we started working with Double Fine is send team down to Double Fine to go disclose them on everything we're doing with project Scarlett. So they've got a front row seat to what that's going to be and how it's going to work and how that's going to come together. So we absolutely want to take advantage of that so I think it's about supporting the family of Xbox devices while making sure that things play best on Scarlett.
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