Xbox Could Become Irrelevant If It Doesn't Thrive In Mobile, Phil Spencer Says

Microsoft has always said its deal to buy Activision Blizzard King was mostly about getting a foothold in the mobile game space, and now Phil Spencer has discussed this further. Appearing on the Xbox podcast recently, Spencer said Microsoft runs the risk of becoming irrelevant if it doesn't find a way to have success in the mobile game market, which is bigger than console and PC.

"I am really looking forward to learning on mobile. The truth of the matter is, if you're going to continue to be relevant in gaming at a global scale, you're going to have to find a way to be relevant on the largest platform, which is mobile," Spencer said.

Now that Microsoft owns Activision Blizzard King, the company takes ownership of the juggernaut Candy Crush series, Diablo Immortal, Call of Duty: Mobile, and every other mobile game from ABK. This is independent of whatever internal plans Microsoft might have had already for the mobile gaming space, including potentially its own mobile game store.

"It's critical for us to deliver on the full promise of over 3 billion people playing video games; the opportunity to reach more and more people. People who only play on their phone, find Xbox to be something that's interesting for them," Spencer said.

No one should expect Microsoft to turn all of its franchises into mobile games (which is something that Activision Blizzard previously said it wanted to do). In fact, Spencer said Microsoft's ability to operate in multiple different business sectors is a strength.

"It doesn't mean I want to turn all of our franchises into mobile franchises; it doesn't mean everything is going to go free-to-play. I think the distribution and business model diversity that we have is a strength of the platform," he said.

Microsoft sells games outright; it also has the popular subscription program Game Pass; and it operates free-to-play games. With the acquisition of ABK, Microsoft also pushes further into the mobile game space and the potential riches there.

"We've got to be relevant on mobile. There is no way to plot the future without being on the platform that most of the planet plays on," he said.

Spencer also shed some light on the background of Microsoft's deal to buy ABK. He said some time ago he sat down with Microsoft CFO Amy Hood to examine the market and determine who the biggest players in the mobile space were, and that's where ABK came up.

Microsoft recently completed its $68.7 billion deal to buy ABK, the largest-ever transaction in the video game space.