Xbox's Phil Spencer On Buying Studios, AI Bots And We Happy Few's Ban

Moments after the 2018 Xbox E3 presentation, I am escorted backstage to speak with Phil Spencer: Industry Veteran and Executive President of Gaming at Microsoft.

With State of Decay paused on the TV, Spencer clearly has adrenaline still coursing through his veins.

He launches into a recap of how felt the show went.

"Yeah the support we got this year, I have to say, from games of all kinds - I mean the fact that we had Kingdom Hearts on our stage, we had Black Desert (the MMORPG), we got to show Devil May Cry - we’ve had some great support from Japan and closing with Cyberpunk was awesome, from the CD Projekt Red team."

"And just the tonality, I thought it really worked having Life Is Strange there, it was nice to see breadth of colour palette, breadth of subject matter show up, and I didn't feel like - and of course I would say this - that it lulled in any way."

"I thought it really clipped along well."

2018 marks Spencer's eighth year presenting at E3, delivering - arguably - Xbox's most important announcements every year.

It's hard to imagine the shine wearing off, with a gig like that.

"It's slightly terrifying," Spencer tells me, "we get millions and millions of people seeing the show."

"I can't think about that before I go out."

One of the biggest changes to the way Xbox delivers its E3 conferences in recent years has been the addition of the general public - the fans.

"I remember the years when I'd come and it's the press. And everybody's blogging and tweeting and there's silence there," Spencer says.

"You say something that you think is interesting, and fans would love, and you hear... crickets."

Spencer says although it wasn't the reason FanFest was included ("we did it for the fans") it has turned out to be "just an awesome addition to the show".

"When I come out, they make me feel at home. It's just an energy jolt - you can’t not feel that."

Even with the fans in the crowd, Spencer still feels the pressure of being in his position.

"I think the thing that always hits me the most is that I represent our team."

"I come out, and I'm a figurehead for thousands of people that are working incredibly hard on our platforms and our games and our service."

Most of those people don't get to come to E3, obviously, but Spencer tells me most of them are watching online at home. Xbox also sets up events in Seattle so staff can come together as a team, and watch.

"I'm representing people that are very, very passionate and work very hard and do some just amazing work."

"That's probably the pressure that I feel the most."

But what about the crowd?

"You know, for the fans - they tend to be very nice and complimentary," Spencer says. "It’s nice."

"I'll get feedback afterwards about things I say and stuff, but I think everybody’s kind of there as a celebration - and I feel that when it comes out."

The Games Industry, Matured

Spencer began his career at Microsoft as in intern in 1988 - that's 32 years with the company.

You must have seen a lot of changes in the industry, I said to him.

"Oh wow, yeah."

He pauses.

"So I've been playing video games my whole life," Spencer says, "and you know it's interesting as video games have become more of a global business - over two billion people on the planet play video games of some kind, across all devices, it's a $150 billion a year business, it's a real business."

"I've seen a lot of professionalism, I guess, roll into the business in the years that I've been involved."

He pauses again.

"I think actually - well certain people might frown at that - I think there's been some good diligence and kind of - structure."

And where is the gaming industry heading, according to Phil Spencer?

"The thing I probably feel now and want to act on more than anything is the role that we have to play in society," Spencer says.

"We are a true art form. And we are an art form that reaches young, old, male, female, every continent, every planet, race. And we're an interactive art form, that begs questions of people cooperating or competing and coming together."

"We have creators now that create stories that ask real social questions, and push on social issues - which I think is great."

Spencer highlights that gaming is a form of entertainment, and that "we should never lose that".

"I think it's been really great to see over the years gaming find its role in society. And we don't always get it right."

Responsibility

Spencer acknowledges there are experiences people can have while gaming that are less than ideal.

"The kind of experiences any of us can have on social networks - whether they are gaming or not," is how he describes it.

Harassment has been around since online play began, and while getting stats on the behaviour van prove difficult, it doesn't appear to be slowing down.

As a woman I learned very quickly early on to mute my mic, have a ambiguous or outright masculine gamertag, and choose a male avatar in order to avoid a constant barrage of vile messages.

While obviously this is the fault of the people behaving in that way, the platform they are expressing their need to violently [censored] [censored] in my [censored] has a part to play in stopping it from continuing.

"I see us as an industry stepping into the responsibility," Spencer says. "Not, like I said, always getting it right, but taking our responsibility there seriously. I think that's a great thing."

Spencer says combatting the more toxic side of the community is something the industry is doing collaboratively.

"I see us doing that as an industry together. We don't pick those areas to compete," Spencers says.

"Nobody would say 'our social network is safer than someone else's' - we just want people to feel like if their kids are playing games they are in a safe environment and that's what we all strive for which I think is great."

Xbox Live is now 15 years old, and as it's grown to now 60 million people, parental controls and content controls - the functions that help shield gamers from harassment and unwanted interactions - are "foundational to how we build our services", Spencer says.

"As I've said, we don't always get it right, but we are always learning."

Spencer tells me the story of David McCarthy, one of his direct reports, who is responsible for Xbox Live services.

"He's incredibly plugged in," Spencer tells me.

"The nice thing is last month is he was down at Sony, and we were talking about these issues. We'll go over to Valve and we’ll talk about these issues, we’ll talk to Nintendo about these issues.

"It's an area where the industry comes together, and I think we all take it very seriously, because of the role gaming plays now."

Community and Anonymity

In his presentation at E3 this year, Spencer spoke fondly of the gaming community, and he expanded on this as we sat down together.

"The thing I love, on the positive side for me, and frankly for people who are playing - as the vast majority of experiences are incredibly positive - is the way playing games together brings people together across social lines, across geography lines, across gender identity lines, whatever it might be," Spencer says.

"I think the world needs more things that bring us together these days."

"When I'm playing State of Decay," he says, pointing to the screen behind me, "and I'm trying to grow my community, I open my community so that anyone on Xbox Live can jump in."

"I meet some people that I would never meet on the real world. And I think this art form, and this engagement, gaming, can bring people together."

But when those people are anonymous?

"The anonymity of the internet on so many social spaces can lead to... not the best in human behaviour," Spencer says.

With gaming, it's different.

"You have a gamer tag, I have a gamer tag, we have shared experience. There's still some identity that you want to build.

"People become less anonymous."

Diversity, In More Ways Than One

In a surprise announce at the conference, Spencer revealed Xbox's acquisition of five new studios - Undead Labs (State of Decay), Ninja Theory (Hellblade), Compulsion Games (We Happy Few) and brand new studio The Initiative.

"You can imagine the conversations with the different teams happened at different times, so our whole thing was to keep it from leaking," Spencer says.

"I'm glad we were able to get to today!" he laughs.

"We know that people love our first party games. It’s an important part of people choosing our platform and services, I love the franchises that we have." Spencer says.

"But we also know that content is an important part of people's choice in the platform, and we knew some teams from our time in the industry - that we'd built long relationships with - and we just knew would make great additions to the team."

"It's awesome. You must have felt it - the energy in the room? People lost it."

As he enthuses about the work these studios are doing, he hits a sore spot.

"We Happy Few - it was a game that we premiered on our stage a few years ago - and it's a team that can really ask and beg some hard questions and the way that they tell stories," Spencer says.

"I think you can sense when you watch the trailer that it's a team that I think is very plugged in to pushing some boundaries, and I love that."

I tell him that's a bittersweet one for us in Australia, because we've had We Happy Few banned.

"I know," he says, sympathetically. It feels genuine.

The use of the drug Joy in was a major reason for the refused rating by the Classification Board. "Computer games will be refused classification if they include or contain drug use related to incentives and rewards", the rules say.

So we just get to sit there watching other people play, sobbing at our screens, I explain.

"It's ah, yeah. Yeah. Well I mean - there will be more games from Compulsion Games," Spencer tells me, reassuringly. "I know the team are committed to that."

Spencer says the acquisitions came from a question that arose when working with the various teams on existing projects.

"Okay, how can we support them?"

"It became a lot easier from an investment standpoint on their part, just like risk and everything, if they were a part of our team," Spencer says.

So there's the diversity of games, the diversity of the studios now - how important is it to have diversity of people making those games?

What does Spencer, personally, think diversity of people that brings to a company like Xbox?

"I think that every one of these leaders would kind of kick me under the table if I tried to make this an issue so I'm going to say it once and I won't say it again," Spencer begins.

"The fact that Nina Kristensen runs Ninja Theory, Helen Chiang runs Minecraft for us, Bonnie Ross runs Halo for us, Shannon Loftis is our publishing lead - I look at our organisation and the fact that so many of our senior leaders there are strong women in the industry, and I love that."

"And it wasn't divisive in any way for us to do that," Spencer says. "It was a natural ascension of people to the positions that they’ve earned based on their track record and their leadership, nothing else."

"But I love when you step back, and you get to look at that team. I'm very very proud of that."

Of course, it isn't just about elevating women in the industry.

"When you have an aspiration to reach two billion gamers, not all the gamers look like me," Spencer says. "They don't live where I live, they don't sit in the same socio-economic space, not everybody plays on a 4K OLED."

"When you're trying to reach a gamer wherever they are, you need to represent the content and the taste and the stories and the sentiment of many different people."

Geographical diversity is something Spencer calls out as another thing he "loved" about the studio acquisitions.

Two more UK-based studios (Ninja Theory, Playground Studios) join the existing studios who sit in the Upper North West corner of the United States, and Southern Canada. Compulsion is based in Montreal.

"I love just the geographic difference that we are starting to see," Spencer says. "Even the indies that show up on our stage, they come from all over the place, and I think that’s great."

The various ways Xbox looks at diversity contribute to what Spencer calls a "diversity of thought".

"Being inclusive to new ideas, new creative ideas at our table, is critical to our work," Spencer says.

The Future of Helping Developers

My ears pricked up at the mention of artificial intelligence at the conference, so I had to ask - where is Xbox looking to use AI?

"We've had a long relationship with Microsoft research in AI," Spencer explains.

Most of it is being used to create believable competitors in a game - Forza, for example, with Drivatars (which model how you play).

"This was an early learning," Spencer says, "just as an example of us looking at creating more believable social environments. For when maybe you don't want to play online, but you wanted to feel the kind of diversity people give you when you're online."

Spencer says Xbox will continue to push on that. AI isn't just important all up as a Microsoft initiative - it turns out a lot of the researchers in this space love games, too.

"When Nina [Kristensen, Ninja Theory] I finally got to the point with Ninja Theory that we were close [to the acquisition deal], some of their lead engineers happened to be over at our Cambridge research office meeting with our AI team," Spencer says.

"And it had nothing to do with [the acquisition] - that meeting had been set up a while before. But it's really great to see the collaboration that happens between our studios and how interested our researchers are."

Spencers says Xbox has "a very diverse palette" of things they can do in games, so those sort of partnerships "are going to be awesome".

Obviously developing better AI will inevitably mean more believable play spaces for gamers, but Spencer believes there's some real opportunities to test games "in a different way".

"I know this isn't as interesting as more interesting gameplay," Spencer says, as I shake my head emphatically, "but to be able to provide to a developer who is getting ready to launch their game the ability to test against some real AI bots that play like real players, it's another area that we are looking at a lot."

In this scenario, developers can see what 10 million players feel like when their game launches - so they don't have to launch and feel that in the real world.

"How can we help developers test their games more completely with AI?" Spencer asks, clearly excited by the possibilities.

He grins.

"Thanks for wearing green today, by the way."

Gizmodo Australia travelled to E3 as a guest of Xbox.


Comments

    Spencer revealed Xbox's acquisition of five new studios - Undead Labs (State of Decay), Ninja Theory (Hellblade), Compulsion Games (We Happy Few) and brand new studio The Initiative.

    Playground Games?

      Yeah, weirdly absent.

      Though to be fair I assumed they were a Microsoft studio all along, since they just churn out (very good) Forza Horizon games every two years.

    Had the great pleasure of meeting Major Nelson at PAX a few years ago, and Chris Charla the year (or two?) before that. Very jealous you got to tick P3 off the list.

    Based of this it doesn't sound like Microsoft has any intention to appeal the classification for We Happy Few. I assumed the reason the decision wasn't appealed was that it was submitted by Gearbox and Gearbox aren't going to publish it any more, but maybe not? Which is a shame since I'm not sure the Classification Board's decision would hold if it was challenged since it's patently stupid and also a set a really dumb precedent.

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