A recent report said Microsoft CEO Satya Nadella was at one point mulling the possibility of shuttering the Xbox division. Before this, Microsoft’s own co-founder Paul Allen’s investment company called for Microsoft to dump Xbox and spin it off as a separate business. That never happened, and now Nadella is speaking up to express Microsoft’s commitment to gaming. He told Dwarkesh Patel that it’s not true that Microsoft’s investments in gaming is part of some kind of “means to some other end.”
Microsoft has a long history of supporting gaming, Nadella pointed out, referencing how Microsoft Flight Simulator was a Microsoft product before the company even made the first version of Windows.
“So, gaming has got a long history at the company, and we want to be in gaming for gaming’s sake. I always start by saying I hate to be in businesses where they’re means to some other end. They have to be ends unto themselves,” he said.
Nadella’s comments came in response to a question about if Nadella had some kind of “premonition” about how gaming could help contribute to Microsoft’s push into the artificial intelligence space by using games to train its models.
“We are a company where we have to bring all these assets together and be better owners by adding value. For example, cloud gaming is a natural thing for us to invest in because that will just expand the TAM [Total Addressable Market] and expand the ability for people to play games everywhere,” he said.
Nadella went on to say that Microsoft’s new investments into gaming-focused AI with its Muse technology can be helpful to allow Microsoft’s game team to make games faster and more efficiently.
“As the biggest, world’s largest publisher, this will be helpful. But at the same time, we’ve got to produce great-quality games. I mean, you can’t be a gaming publisher without, sort of, first and foremost being focused on that,” he said.
Microsoft’s new Muse technology is what the company claims is the world’s first “world and human action model” that is trained right now on Ninja Theory’s abandoned game Bleeding Edge. Ninja Theory has said Muse won’t be use to make games, but instead to help empower humans to work faster.
“I think about gaming data as perhaps, you know, what YouTube is perhaps to Google, gaming data is to Microsoft. And so therefore I’m excited about that,” Nadella said.
AI is a controversial technology within the gaming space and across numerous other businesses. A recent GDC study found that the majority of game studios worldwide use generative AI already, despite concerns about the technology. Microsoft itself has gone on record saying advancements to AI will lead to job losses in the short term but may lead to more opportunities in the long term. Microsoft laid off more than 2,500 people in the past year in gaming roles, though whether or not the reduction had anything to do with AI is unknown. Video game voice actors have also gone on strike due to concerns about AI.
