Buy it, then Break it
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- čas přidán 13. 05. 2024
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Microsoft closes multiple recently-acquired game studios, including Tango Gameworks, the developer behind award-winning game Hi-Fi Rush.
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It sounds really depressing that companies exist to grow, buy other companies, then wait to eventually be bought out and fired. All for faceless shareholders to gain a little
Faceless? That’s my 401(k) at stake.
@fmccloud you're 401K is invested typically in mutual funds, so the actions of these companies buying and closing each other is often neutral with minimal gains. The real winners are the owners of the companies that get bought, they get a check and can walk away
That's capitalism at it's worst for you
The shareholders are mostly people at the top of the company who are doing this to boost the stocks short term so they can sell options and bail.
@@MarcuStar745XDThis is capitalism working as intended, sadly
“There’s only so many dogs you can cut open at a time”
We need a Linus without context video with quotes like that.
For real I've never heard anyone say that in my life. And I live in the south east USA , home of the wild-ass saying. Oh yeah I forgot he was actually talking about a vet there lmao. Sounds like a saying like "there's more than one way to skin a cat "
the behavior is monopolistic. they never intended to run the majority of the studios they bought. i think they want the ip in the catalog and the elimination of competition.
"Capitalism is the gentleman's form of slavery." -Kwame
E. E. E.
Microsoft ☕
"oh, I didn't get rich writing out a bunch of checks. Buy them out boys" - Bill Gates Simpsons
@@Smegmadonis Real
To Microsoft, they don’t care that you stayed on Game Pass to play Hi-Fi Rush. They want games that will have players sign-up and forget to unsubscribe.
isnt this true for every subscription based thing in the world?
So that's why they wanted Activision so bad.
Who forgets about 700 games
@@magmachicken4402idk i own 70 percent of the games on gp. that i care about anyway, and i forget how many i have sometimes
another problem i see everywhere is enshittification, companies making an amazing product with the backing of huge companies, something so good its widely unprofitable in its current format, then once they have beaten off any competition who cant afford such unrealistic costs, and aquired most of the potential users, switch to clawing back features behind paywalls and making their product terrible and locking everything that made it good behind a paywall
These practices are supposed to be prevented by antitrust laws, but monopolies, spying, and propagandizing is only illegal when it's not American companies doing it
I'm just curious how Discord will look in 5 years. I hope it won't be another case of Skype.
Same thing with Google search, it's worse than it was 10 years ago. And your only real alternative is bing which is at best a sidegrade.
Unless you want to use weird Chinese or Russian search engines.
No clue how but this should be regulated or illegal. With enough money you can corner a market and destroy all the small businesses. Then, like you said, once they have a monopoly they can exploit their position now that they've killed the competition. Companies operating at a loss to create a monopoly is insidious.
@@azerim2039 I saw the first and I'd ever seen on discord a few days ago for honkai star rail. Right now it may just be one ad, but I bet they're going to start showing more.
Buy it, use it, break it, fix it, trash it, change it, mail, upgrade it
It's just Microsoft's old strat of embrace, extend, extinguish. They "embraced" by buying out all these studios, "extended" by hiring a bunch of staff they couldn't afford, and "extinguished" by closing down all these studios under the pretext of cutting costs.
why dont you cry as much on the other studios doing the same thing?
@@ExTremZerohuh?
@@TriopsTrilobite Microsoft arent the only company doing layoffs...but doing research and blind hating is easier.
OK. But you can also say they embraced these small developers and gave them all the staff and money they needed to make a really awesome game and then the devs fumbled the bag and made games that sucked to alot of people or were broken on release and didn't make enough money to justify the investment so in order to stop the bleeding they closed the studio. That's how capitalism works.
@@ExTremZero the video is talking about Microsoft. Companies like Sony, EA, Ubisoft and Tencent are no saints but if you actually got butthurt because I didn't put a "hate" comment about them too that's your problem not mine. I was just stating a pattern of behavior that Microsoft was guilty of before and is doing again now.
the game pass model is going to kill all these small studios under the MSFT umbrella. you're 100% right.
Alright, I'll watch the 69 billionth video about this...
Dude I am telling you watching video about same topic again and again ,it's like entelectual masterbation. You get nothing valuable information everyone one or the other way everyone says the say fucking stuff .
nice
Its rumored that Bethesda was a defensive acquisition for Xbox. Starfield was being shopped around and the last thing they wanted was for it to be a Playstation exclusive. Getting big ticket ip like Fallout and Elder Scrolls was a cherry on top. Sadly buying Bethesda means their smaller studios slip through the cracks.
They were really banking on Starfield bringing in more subscribers to gamepass, but it’s likely at this point that the people who want gamepass already have it. And if gamepass isnt growing and xboxes arent selling, expect more cuts to happen
Edit: another aspect is the shadow of the $70 billion acquisition (the largest in tech history) of Activision. Small bets on small games arent making dents in that like a mobile game or live service game can. while a hifi rush can be a smash hit making 20-30 million, call of duty made $2 billion in one single quarter
I think it's also important to emphasize that in Microsoft (as other YTers like SOG pointed out), the entire Xbox division was essentially a rounding number on their spreadsheet for most of its existence. Those two acquisitions made shareholders pay attention big time, and now they demand profitability from the gaming division.
@@Ace-cc1em i wasnt fully aware of that dynamic but it makes sense. thats a huge chunk of the cash microsoft has on hand and id want to know where my moneys going too
@@Ace-cc1emTrue. Revenue wise it used to sit around 4% and doubled to round 8-9%
My understanding is that the A' s in gaming were from distributors in documentation to retailers in the 1990s. Nothing to do with credit but rather how popular the distributer thought games were. This was so that retailers knew to buy more copies of the popular stuff. Something along those lines.
Truly the moment for the first AAAAA game
I appreciate you, gentlemen. And all the producers, researchers, writers, etc of this show… gratitude
Luke is right in that this will just result in people looking more to companies not under their umbrella for games. I think in the long term this is just going to result in a new wave of studios with experienced devs, less corporate oversight, and no over-inflated budget which is where most of the best games come from IMO. It is sad that these people are losing their jobs, but their experience isn't going away. Hopefully they get to land on their feed and can pursue their vision elsewhere.
I think the problem (and confusion) here is a difference of values. For us, and for anyone who is guided by a moral compass, the people and developers that made a beloved game happen are what hold value and deserve respect. But for data and profit driven companies, people are replaceable. They aren’t buying dev studios, they are buying IP. The studios are expensive to upkeep, and are a negative number on a balance sheet, while IP holds value on its own and has no negative cost of ownership (though technically there is server/upkeep cost if it’s an online game). For any studio where they don’t see immediate future pay-off to upkeep, they’d rather own the IP alone and future rights to that content, expansions, and sequels.
The problem is that IP is basically worthless if you don't have a way to actually utilize it
Catch and kill? removing potential competitor?
That explanation for the veterinary company also works for the housing crisis in Canada. A house can be lot of debt for a family, but just a little variable for huge investors. No way a worker can compete with investors.
Tango Gameworks has 35 employees? Ok, they couldn't afford 35 devs ?
Japanese Devs are cheap as hell compared to western ones, Microsoft just suck with the Japanese market and on another cycle of trying to enter it with a new game or studio and then immediately giving up.
I'm more and more convinced to never ever sell to a large company, if I ever start my own thing.
Guess you have never owned a business.
Most business owners, who work 70 hour work weeks, would gladly bloat their company’s value and sell their business as exit strategy.
Then finally have time for personal life, or start a better business with previous knowledge/experience and money.
It’s the $70b hole Microsoft needs to fill from the ABK deal.
With that deal came increased scrutiny from Satya and the board.
Call of Duty will 100% make that money back within a few years, so why the panic? Microsoft doesn't even understand what they bought
@@jfudge7384"so, why the panic. Microsoft doesn't even know what they bought "
That's the panic
spread to thin like butter on bread sounds like an LOTR ref.
10:32 bro Linus turned into CaseOh 😂
The thing is i think it's a manipulation of the numbers overall, basically because of Gamepass, while they might have internal numbers that decide how much revenue for example Hi-Fi Rush made, they might also have a number that they put into the books to make it seem like the investment LOST money when it instead MADE money, then writing it off, and essentially cooking the books with a bunch of things that made them money, but can be listed as things that lost money at the same time.
Using the Bean analogy, that 1 billion dollar bean actually made you 1.5 billion, but you listed the money made as .5 billion, and write .5 billion off on your taxes, while having profited .5 billion.
No one is playing hifi rush. No one. It didn't make money. Redfall was broken as shit. I've never heard of the other games. Stop trying to be mad all the time. You can't honestly tell me your mad they closed the studio that made hifi rush. No one cared about hifi rush 7 days ago.
@@doodoo66why are you acting as though hifi rush is a live service. Of course no is talking about it now, cause it came out years ago.
@Random_dud31 no I'm saying it has always been a failure. It has always sucked.
@@Random_dud31 which is why no one is talking about it. Or playing it.
@@doodoo66 it made money, it had its playtime. But because it's a _Music_ game, a single player one at that, itll get passed by quickly. Even with streamer mode on, the music industry is a mess.
1. Buy studios
2. Close studios
3. ???
4. Profit?
We all know how corporations operate the problem here is that we've been lied to and that's it. When you look at Bobby, Jim, Andrew, hell even Nintendo they don't talk directly to fans in any way. Why? Because they know what their job is and don't have to say a word. Phil on the other hand oh boy he said a lot things and most of what he said was a lie. That's the problem.
its his job to be the face and spokesperson of xbox, i'll bet he is just as blind sided by microsoft as everyone else, imagine being in the middle of a huge community of xbox fans, tech news, and mega corporate conglomerates, and every time you appologize about all this horrible stuff going on, Bill goes and fires a whole nother' team.
then you appologize again and say "We'll make great games!" then MS ships Redfall, you appologize agian and then bill goes and fires that studio too.
Honestly, i couldnt do it, if i was phill i would etiher leave MS and say to the world that i cant be apart of these monopolistic tragedies or i would just kms already.
1:48 I would more or less call it a year-over-year decline in growth. In recent years, growth has been slowing down significantly, but has not yet reached negative growth.
The thing with vets is that you also hat the option of opening a completely new company. You just need the startup costs.
These big corporations should not be able to buy small studios/companies unless they are held legally liable for dropping them immediatley after acquiring them. This is just promoting a monopolistic market where they just eliminate the competition by buying them
Buying Bethesda is like buying a 13 year old cat, with no hair.
A almost dead hairless cat that hasn’t done anything for… since Skyrim, even even Skyrim was a bit of a hairball
“Bethesda” is not just Bethesda Game Studios.
if revenue doesn't go up then costs must go down to seem like you are growing, and there's no better time to close a studio than just after a release.
Honestly, that's a terrible time to close, because that greatly decreases confidence in other companies under the same umbrella
@@InfernosReaper oh sure, for morale it's awful, but financially that studio ain't bringing in any more money for another 2 years. Microsoft clearly don't care about how their employees feel, so from that point of view it makes sense
@@BradsSpace2 If they were *condensing* studios, it'd be one thing, but they're basically just cutting people and locations then *hoping* they'll have their customers won't jump
If you drive off your customer base by destroying the production soon after releases, you're gonna lose more money in the long run. That *should* be obvious
It's almost paradoxical how these companies will spend money like they would on a long-term investment then try to run things like a fly-by-night operation, expecting to make everything back quickly.
@@InfernosReaper Well they know that 99% on their customs either don't know about studio closes or don't care. It's easy to assume the amount of people that keep up with this sort of news is a lot but it's actually a very small percentage. People still play blizzard games, people still play EA games, people will continue to play microsoft games. It's sad but true.
@@BradsSpace2 Except this isn't 15+ years ago. People are much better informed about these things than they used to be and the phrase "once bit, twice shy" will come into play a lot more than you wanna give credit for.
It’s exactly this kind of game that killed nortel. Not because they got outplayed, but because they overplayed themselves.
Prey was amazing
17:01 love Dans lough
Yep, this is why I switched to Linux and why I buy indie games instead of triple A games. Im so done with corporations and their greed. Will never go back to Windows, and I'm currently running Bazzite linux gaming distro, and it's phenomenal. I guarantee 100 percent Windows will be a subscription system in the future where you won't own Windows, and you will be renting it. Instead, it's only a matter of time.
Given the old embrace, extend, extinguish mantra is still alive and well at MS, I'd wager that Microsoft will dump the NT kernel in favor of Linux before it turns Windows into a subscription service.
If you're buying a studio, that is called an asset. That is not a "cost" to be cut. You expect that studio to generate profit. Otherwise spin it off and give it autonomy instead of smothering it in the cradle.
Obviously its to thin out the competition
I don't think anyone will be surprised by that to tell the truth.
Close the options. Just have 1 or 2 games that you can only subscribe to, and are filled with macrotransactions
that seems like the end goal unfortunately. I canceled my subscription.
To be fair, a lot of those studios were already broken before Microsoft got their claws in them. That said Microsoft clearly overextended buying many studios that needed clearly a lot of work and studios that were fine as they were or simply might of needed a little fixing ended up paying the price for it.
Redfall was already in development for a good while when Microsoft bought Bethesda iirc. From what I read too both Fallout 76 and Redfall were just Zenimax trying to make their portfolio look more attractive to potential buyers since live service games have been all the rage the last 5-10 years and the successful ones print money.
Micro$oft doesn't want the studio, they want the IP. They just want the rights to produce sequels.
Spread too thin like peanut butter on bread is a totally fine analogy and Luke is big trippin, can even see Linus face go HUH? 8:07
Arkane Austin made Redfall, they needed to be closed asap.
So now, more people know about Microsoft's EEE pattern.
I think it's about owning the titles that these companies produced and not about the companies themselves. After all, they keep the title, regardless if they close down the company name
Haha. Bummed that chat made the “tax write off” joke before I could comment
Xbox buying smaller studios like Obsidian, Ninja Theory, etc makes sense.
Xbox funding could help these studios make more and better games. It means these studios don't have to constantly look for a company to publish their games.
It just seems cheaper, more effective, and more beneficial to Xbox overall.
But them buying these big publishers like Activition Blizzard and ZeniMax makes little sense to me. These companies dont need Xbox funding. They are multiplatform publishers so those game are gonna be released on Xbox anyways.
I dont see how Xbox owning Activition and ZeniMax is beneficial to anyone. It just makes things worse.
heres a cure to this, dont sell your company, grow it instead.
Isn't buying other people's beans, make yours sell better.... I mean isn't that monopoly right?
Close Bathesda ?!
How is this legal?
Also vet bills are crazy. I once paid the same amount as a 24" monitor for my puppy's leg to be set. They used a single tongue depressor, cut in half and filed down with a bandage.
What might happen after you take the human deal is that human selling aquired company to money guys, making gigantic profit, and you essentially just lost the money in difference, that went to the person you sold your business too. Just like tech scalpers. I don't know if that is a real thing, but that fear might reduce the chances of selling to people or small groups of people ever more
That thumbnail 😂😅
As far as Microsoft is concerned they don't care to explain nor do they owe you an explanation.
Remember when the FTC was trying to stop Microsoft from acquiring ABK and people got mad?
Halo is actually in a good place right now Luke.
Shout-out to Dr Smith, the real MVP
The Grandly Mistaken Trash Compactor.
Maybe the peanut butter comment was in reference to the hobbit movie except there the phrase is spread too thin like to little butter on bread.
It’s stock and market value manipulation. That’s the main tail wagging the big tech dogs tail right now
Sounds like microsoft has taken the nortel approach.
Similar to the later discussion about taking the human offer, I keep getting offers from corporate buyers of residential properties to buy my home and my in-laws’ home (which is in a trust I am co-executor of) and every time they call I ask them the number their offer will be. If they waffle and want to meet or whatever, I say “No, I want a ballpark number right now, you obviously have been researching this enough to get my phone number, so what’s your number? No number, no meeting.” And **no matter** what number they say, my response is “add two more zeroes to the end and we can talk” because if I’m gonna sell out, I want enough money to buy all the properties around this one and annoy the crap out of them for the next decade.
Don't worry, they'll buy all the homes around you and leave them vacant and rotting away until your property value plummets, then they buy your home for cheap, demolish all the homes and build an apartment building. Seen it happen in lots of university cities already.
@@jfudge7384 Cool for them to try, I’ll just go to the tax assessor’s office, get my property taxes reduced for the loss in real value, claim it as a loss on my income taxes, and live there forever much cheaper than I could have before, and next time they want to offer me something, it’ll be 3 0’s they need to tack onto the end of the figure since I now know the value of what they intend to do with the land. 🤷🏻♂️
I really, truly would take the human offer because it would be a total affront to my values, but thats only of course if Im not in a desperate situation myself, then that could yeah Change because of my own needs you know?
Although I never played Hi-Fi Rush I’ve heard nothing but positive things said about the game. To shutdown that studio is just so beyond stupid to me, those were real creatives.
Just because the game had over-whelmingly good positive reviews. Does not mean that it made money to keep afloat.
Edit: bruh he literally explained better and more in depth that I was willing lol
With the whole bean talk that linus did, it all comes down to they won't get that money back they already "wasted" the why keep hemorrhaging money to something they consider a loss.
Smaller prestige games... No more big valuable DLC! Come up with a new Flappy Bird!
It's so frustrating just having corporations acquiring whatever they can just to have it, and not caring about it. There are too many degrees of separation from the people running everything to the people at the bottom that are doing the work and the actual customers and clients.
How much money is being made by "forgotten subscriptions". All income, no expense. Especially when people aren't playing. How much of the business model is based on that?
Governments should be able to do multiple things at once...
I know a life of corporate greed brought us to this untimely demise, but still, I blame society 😢
Well because its not "just" corporate greed. It is a society problem in the big scale. The way we as humans almost universally accept the idea of infinite growth and shareholder economy is way more just corporate greed, it's a way of living that shapes us and our behaviour.
@soerenbo while the straw that breaks the camels back often gets the attention, the culminating effects are the real culprit... 🫣
The paradox of progress will doom us all
woops all the free money is gone, now gotta balance the books, and money is the only thing that will matter
don't ever sell your company to a large corpo. Its not worth losing your soul.
Given that Tango Game Works was under Bethesda I think it's actually something to the effect of this.
Bethesda had projected Starfield to do gangbusters, then when it was shown it was wildly off target Xbox said 'You need to make up this difference, figure it out'.
Bethesda then went, 'Okay, well the main studio is fine no matter what because I work here, but every other studio, whatever collection of them makes up the difference, cut them and call it good.'
Then Xbox has a lot of egg on their face because they were not expecting them to cut Tango Game Works because they were just so far away from the decision at that point they had no visibility. Queue damage control and doubling down to shelter their position and status quo to avoid Microsoft coming down from on high to clean shop.
It's probably not even about growth... You are thinking about this way to plainly for a billion-dollar company.
They are buying these studios which makes their stock price increase, then they get shattered which doesn't have an equal effect on the stock value, because they get rid of all the overhead costs of the employees etc, but keep the IPs.
Not to mention, they are outright buying a ton of the competition, then just closing them, if that's not a Blanton monopoly move, idk what is.
1:50
Reverse growth sounds... so russian :D (if yk yk)
Earnings before income tax and depreciation
Let's buy our competition then close them so we are the only company left.
Just like poker buying the pot.
The only "Microsoft" game I've wanted to play was Sea of Thieves, which thankfully came to PS recently. And been enjoying it with friends, but that's it, nothing in Xbox/Microsoft Catalogue actually intrigues me.
Business consolidation sucks. Even in the case of streaming services, where it’s very annoying as a consumer, it’s atleast a competitive market because of all the big players in that space.
8:06 americans will use ANYTHING except the metric system
If Xbox wants to make money from gamepass, they need to add more party games, like the new game Make Way, or they could add games like Ultimate Chicken Horse
sounds like they need to fuck this gamepass shit off.
is it not monlopolistic to just buy everyone and fire them?
What I don't get it, why don't they just use the (excess) revenue generated from their moneymakers like COD and Candy Crush and funnel that into smaller games?
Microsoft should buy apple would be fun to see how fast it would go into the dumpster
Doesn't Apple have more money than Microsoft? It wouldn't make sense
@@GoodlyPenguin it's called a joke/sarcasm
Microsoft can't afford Apple. Not yet, anyway. Wait for China's economy to fully implode first and see how much that shaves off of Apple's market cap.
Surly AI would be making game development cheaper?
Minecraft, Mojang, Microsoft
Your Dr. Friend should sell her business and cash out on the easy couple of millions lol
bish, they probably ask a lot but provided less
Games these days are trash anyways, forcing me into a subscription model knowing that games would become even worse would make me ditch gaming for good. Hardware is also barely affordable these days, that'd be the final nail in the coffin for me.
Also ask Hollywood how that business model turned out.
The evil within was one of my favorite horror game series. I even use Linux exclusively to not put up with Microsofts BS. And still they manage to make me angry.
Wait till MS dumps the NT kernel in favor of switching Windows over to the Linux kernel. You think they make you angry now? Hoo boy... 😏
Sometimes, good business is just shutting down the competition. Microsoft is not out to make great games, they are out to make money from a target audience, limiting the choice of the target audience indirectly benefits Microsoft as well. Discussing them not buying other studios, makes less sense if you acknowledge they want less competition in the market.
AAA publishers want to haverst IP to sit on it and also kill the competitiors but ultimately their customer is the shareholder not gamer, employee is even lower. Follow the fun, whereas AAA publishers are following quarterly profits
I was about to make a comment about the way absolute capitalism works but I see lots of people already made all my points. They buy a company in the same field just to strip it of anything they can use and then they just close the stripped company down. Now they own the products and other things PLUS there is one less competitor.
Couldn't Microsoft just sell the companies on? That way the studios could potentially still be there. Or is that not how it works 🤷
How about don’t but the studio if your just going to shut them down even after hit games.
Capital accrual is dumb and leads to issues like this. Business Cooperatives would be way better like how Sunkist and Land o' Lakes are really a bunch of smaller companies working together under the same name.
Its a shame Microsoft didnt closed down Blizzard.
dude I just played the whole hifi rush! best game of the year to me. Microsoft is really dumb for making this decision. Also they just said hifi rush was exactly what they wanted! this is crazy talk.... I'm never paying for xbox pass ever. I played on steam, and I did left a great review coz I don't lie
Yeah, buying them destroys them....r u peeps new
aw yeah late stage capitasm woes. Not only does the market not regulate itself, the market goes to shit by itself eventually