Microsoft Head of Xbox Comments on Metaverse and P2E games


Sep. 05, 2022

On August 24th Bloomberg had a chat with Phil Spencer, Head of Xbox about the future of gaming and its place in the metaverse.

To summarize Spencer’s position; he is optimistic about the growth of the metaverse projects, however, not so sure about play-to-earn (P2E) crypto games. The reason, according to Spencer, is P2E’s economic aspect and its speculative nature.

Here is what Microsoft executives had to say about the future of metaverse, NFTs and Play to Earn crypto games.

Microsoft is all in with Metaverse

According to Spencer, “My view on Metaverse is that gamers have been in the Metaverse for 30 years. When you’re playing games, if you’re playing a World of Warcraft game, you’re playing in Roblox, you’re playing in a racing game where everybody’s in a shared world.”

Spencer believes that gamers have been in a metaverse for decades due to the nature of games; meaning that games take place in a virtual environment.  Spencer defines Metaverse as being essentially a 3D shared environment where individuals are free to interact with one another.

Spencer’s view reflects those of Microsoft CEO Satya Nadella, who stated that, “If you take Halo as a game, it is a Metaverse. Minecraft is a Metaverse, and so is Flight Sim. In some sense, they’re 2D today and the question is, can you now take that to a fully 3D world, and we absolutely plan to do so”.

True to the CEO’s statement about 3D, in March 2021, Microsoft introduced Mesh, which is perceived as a first step towards an Xbox metaverse future. Microsoft Mesh shifts online video communication from the 2D video landscape into a 3D environment. A mixed reality space where users can exist as holograms as they converse and work together. CTO John Roach described Microsoft Mesh as “a gateway to the metaverse.

Crypto-based P2E games are another issue

Spencer acknowledged that game commercialization has been around for some time. However, he expressed concern regarding some games that are largely designed to earn virtual cash or crypto. Spencer stated, “Play-to-earn specifically is something I’m cautious about. It creates a worker force out of players, for certain players to kind of monetize.”

Nevertheless,  head of Microsoft’s Xbox gaming unit did not dismiss the play-to-earn field altogether, he acknowledged that there might be some valid use cases in the field.                       

What about NFTs?

He talked about NFTs through some comments made about their experience with Minecraft and NFTs, and how Microsoft views NFTs. He said, “Because we saw people doing things that we thought were exploitive in our product and we said we don’t want that.” Mojang, developer of Minecraft, has taken a firm stance against the massively popular game’s involvement with NFTs.

In October 2021, Microsoft NFTs emerged again. This time as a promotional tie-in to the launch of Windows 11. A limited number of the NFT was given away for free, it had little utility or value. One may conclude that, Microsoft is keen to experiment with, mint and deliver NFTs to the public.

Microsoft to Acquire Activision

Microsoft Acquire Activision

Spencer stated that mobile phones are the biggest gaming platforms on the planet, and he referred to Microsoft’s potential acquisition of Activision, a mega-publisher with high capability on mobile platforms. The deal was signed in late January 2022 and set to close during fiscal year 2023; costing US$68.7 billion, which makes it the largest acquisition in the gaming history.

When asked about regulations and scrutiny of big deals by authorities, the Xbox head said, “I kind of come at this…that big deals should be scrutinized. That’s the role of Regulators, why they’re in place.”

The interview ended by Spencer expressing his satisfaction with the progress Microsoft has made.