Microsoft’s CEO agrees Xbox’s competition isn’t other gaming platforms, it’s TikTok

Microsoft CEO Satya Nadella has echoed comments from Xbox’s leadership that the company views its competition in gaming not as other game platforms, but short form video like TikTok.

Speaking to TBPN during a live stream on Tuesday, transcribed by VGC, Nadella was asked about his outlook on gaming, in a month where Xbox announced Halo for PS5 and is reportedly under pressure to hit unprecedented profit margins.

Nadella used the segment to talk up Microsoft‘s gaming on Windows business, which he noted was its biggest, and alluded to bringing its next console closer to Windows. The next Xbox is widely expected to be, essentially, a PC, like the recently released ROG Xbox Ally.

“Remember, the biggest gaming business is the Windows business,” Nadella said. “To us, gaming on Windows, and of course, Steam has built a massive marketplace on top of it and done a very successful job. So to us, the way we are thinking about gaming is, first of all, we’re now the largest publisher [after acquiring Activision].

“So therefore, we want to be a fantastic publisher, similar in approach to what we did with Office. We’re going to be everywhere, on every platform. So we want to make sure, whether it’s consoles, whether it’s the PC, whether it’s mobile, whether it’s cloud gaming, or the TV. We just want to make sure the game is enjoyed by gamers everywhere.”

The CEO went on to discuss Microsoft’s plans for its next Xbox console, which he suggested Microsoft wants to bring closer to its PC business. According to reports, the next-gen Xbox will be a hybrid system capable of playing PC games from multiple stores like Steam and Epic Games.

Nadella told TBPN: “We want to do innovative work on the system side on the console and on the PC. And it’s kind of funny that people think about the console and PC as two different things. We built the console because we wanted to build a better PC, which could then perform for gaming. And so I kind of want to revisit some of that conventional wisdom.

“But at the end of the day, console has an experience that is unparalleled. It delivers performance that’s unparalleled, that pushes, I think, the system forward. So I’m really looking forward to the next console, the next PC gaming.”

Finally, Nadella echoed comments made by Xbox games boss Matt Booty last week, in which he claimed Xbox’s biggest competitor was not another console, but TikTok and movies.

“Most importantly, the game business model has to be where we have to invent maybe some new interactive media as well, because after all, gaming’s competition is not other gaming. Gaming’s competition is short-form video,” Nadella said.

“And so if we as an industry don’t continue to innovate, both how we produce, what we produce, how we think about distribution, the economic model, right, the best way to innovate is to have good margins, because that’s the way you can fund.”