Microsoft exec says gaming is somewhat resilient Microsoft’s head of gaming said Wednesday that video games can stand up to economic weakness, even as the software maker expects slower pickup in other parts of its business targeting consumers.
Rising prices and interest rates have inspired investors to hurry up and find pockets of financial markets that can hold up in a downturn. Gaming remains a high priority for Microsoft, with the company working to close its $68.7 billion acquisition of publisher Activision Blizzard.
Microsoft exec says gaming is somewhat resilient
Still derive most of their revenue from advertising, with the former still relying on internet search and the latter on social media. Patrick Lo, CEO of networking hardware maker Netgear
, which reported a 14% annualized revenue decline on Wednesday, said in a statement there was a “challenging macroeconomic environment for most consumers.”
Microsoft is more diversified than those companies, although earlier this week executives said its exposure to consumers would hurt sales in the current quarter of Windows operating-system licenses, Surface PCs and advertising on properties such as Bing and LinkedIn.
During the quarter, the company expects to sign up more subscribers to its Xbox Game Pass service, which provides unlimited access to hundreds of video games, Amy Hood, its finance chief, told analysts on a conference call on Tuesday. Gaming revenue should decline in the low to mid-teens percentage range because of strong growth in the year-ago quarter that saw introductions of first-party games, Hood said.
Phil Spencer, CEO of Microsoft Gaming, sounded optimistic about the prospects of the unit.
“It’s proven over years, at times of economic uncertainty for families, gaming is somewhat resilient to those issues,” he said at the Wall Street Journal’s WSJ Tech Live conference in Laguna Beach Gaming Arts to Showcase, California.
Not everyone shares Spencer’s view.
“The video game industry has never been ‘recession-proof,’ but that line gets brought out every time the r-word is mentioned,” Mat Piscatella, executive director and video game industry advisor at market researcher NPD Group, wrote in a July tweet.
Piers Harding-Rolls, research director at researcher Ampere Analysis, has made similar comments.
“After two years of huge expansion, the games market is poised to hand back a bit of that growth in 2022 as multiple factors combine to undermine performance,” he told CNBC in July.
But Spencer can point to Microsoft’s own experience with recessions as evidence for his claim.
In 2008, during the Global Financial Crisis, Microsoft cut prices of Xbox consoles in various markets as the public became interested in the Nintendo
Wii. It turned out to be “numerically on the console side Gaming Platforms, our best holiday and our best calendar year in the history of Xbox Microsoft exec says gaming is somewhat resilient,” said Robbie Bach, president of Microsoft’s entertainment and devices unit at the time.
In 2020, a brief recession coincided with the onset of coronavirus, but that led people to stay home and play more games, including on Xbox consoles and PCs. “People everywhere are turning to gaming to sustain human connection while practicing social distancing,” CEO Satya Nadella said in April 2020.
Today, Spencer said, Microsoft gives people choice in how much they’d like to spend if they want consoles. The company offers the $499 Xbox Series X and the less powerful $299 Xbox Series S. Microsoft subsidizes the cost to the tune of $100 to $200 per console, with the expectation that it will make the money back on sales of accessories and storefront purchases, he said. It’s up to gamers if they’d like to pay $10 or $15 per month for Game Pass subscriptions. They can also buy games outright, or play certain games for free.
Spencer said he doesn’t think Microsoft will be able to keep the prices of games constant forever. But they can provide impressive amounts of entertainment in comparison with other pursuits. “People can play video games for hundreds of hours,” he said.
Shell posted adjusted earnings of $9.45 billion for the three months through to the end of September Microsoft exec says gaming is somewhat resilient, meeting analyst expectations of $9.5 billion according to Refinitiv. The company posted adjusted earnings of $4.1 billion over the same period a year earlier and notched a whopping $11.5 billion for the second quarter of 2022.
The oil giant said it planned to increase its dividend per share by around 15% for the fourth quarter 2022, to be paid out in March 2023. It also announced a new share buyback program, which is set to result in an additional $4 billion of distributions and is expected to be completed by its next earnings release.
Shares of Shell closed the European trading session up more than 5%.
The London-headquartered oil major reported consecutive quarters of record profits through the first six months of the year, benefitting from surging commodity prices following Russia’s invasion of Ukraine.
It has coincided with calls for higher taxes on the bumper profits of Britain’s biggest oil and gas companies Microsoft exec says gaming is somewhat resilient, particularly at a time when the country faces a deepening cost-of-living crisis.
Shell warned in an update earlier this month that lower refining and chemicals margins and weaker gas trading were likely to negatively impact third-quarter earnings.
On Thursday, the company said a recovery in global product supply had contributed to lower refining margins in the third quarter, and gas trading earnings had also fallen.
“The trading and optimisation contributions were mainly impacted by a combination of seasonality and supply constraints, coupled with substantial differences between paper and physical realisations in a volatile and dislocated market,” Shell said in its earnings release.
What about renewable investments?
Shell CEO Ben van Beurden said in a statement that the firm’s “robust” results come at a time of ongoing energy market volatility.
“We continue to strengthen Shell’s portfolio through disciplined investment and transform the company for a low-carbon future. At the same time we are working closely with governments and customers to address their short and long-term energy needs,” he added.
In the first nine months of the year, Shell’s investments in its “Renewables & Energy Solutions” sector came to around $2.4 million Microsoft exec says gaming is somewhat resilient, roughly 14% of its total cash capital expenditures of $17.5 million.
An ad tier designed to attract budget-conscious consumers, a push to monetize account sharing that is meant to keep Wall Street happy, and an ambitious gaming road map — these three pillars could transform Netflix into a very different company, and ultimately help it fend off competitors like Disney+ and HBO Max.
There’s no guarantee that any of it will work, and gaming in particular has long been a tough nut to crack for industry outsiders. But compared to just nine months ago, Netflix does have a much clearer plan and a new narrative to tell investors.
Executives laid the groundwork for that narrative this week, with Verdu telling the TechCrunch Disrupt audience that the company’s embrace of gaming was one of just a handful of major inflection points over Netflix’s history. And Hastings, while acknowledging that Netflix is not immune to the current economic climate, tried to exude confidence in the company’s path ahead during Tuesday’s investor call.