Microsoft faces the harsh light of unwanted leaks

A culture of paranoia surrounds game companies, who guard their secrets with a care bordering on fanaticism. Of course, companies like Microsoft – which is this week in the agonizing throes of a self-inflicted leak – have good reason to be secretive.

They operate in a highly profitable, fast-moving industry in which competitive information has real value. They serve an audience that seizes upon the merest tidbits to feed frenzied social media discourse on a daily basis. But still, these companies are generally guarded, to the point in which most of their utterances are either improbably hyperbolic, or are designed to obfuscate and disguise negativity.

So when a company’s internal operations, ranging from passing fancies to likely future business strategies, are laid bare, the result is a barrage of intense analyses from the media and commentariat.

Little wonder that in the wake of the leak, Xbox chief Phil Spencer issued a statement that there wasn’t much to see here, because time passes and things move on, blah-de-blah.

Long battle

The leak came about as a result of Microsoft’s long battle with the Federal Trade Commission over its incoming acquisition of Activision Blizzard. As part of its legal obligations, the company provided the FTC with documents, including links to poorly redacted papers that were neither required nor requested. The FTC’s public affairs director Douglas Farrar wrote on Twitter: “The FTC was not responsible for uploading Microsoft’s plans for its games and consoles to the court website,” adding a judge’s order explaining the snafu, and ordering the removal of the documents.

For his part, Spencer posted on Twitter, claiming that the information is essentially outdated. “We’ve seen the conversation around old emails and documents. It is hard to see our team’s work shared in this way because so much has changed and there’s so much to be excited about right now, and in the future. We will share the real plans when we are ready.”

In a memo to employees (leaked, of course), Spencer added that the leaks were “disappointing” (corporate speak for ‘enraging’), saying that “the documents are well over a year old and our plans have evolved”.

He wrote: “‘We will learn from what happened and be better going forward. We all put incredible amounts of passion and energy into our work, and this is never how we want that hard work to be shared with the community.”

Unveiled plans

His assertion has done little to dampen the desire of journalists and industry-watchers to rifle through the papers, especially considering that they include useful hard data, proposed future product launches, and the kind of intra-company tittle tattle that, frankly, we all love to read.

First, those product plans, including hardware proposals that can hardly fail to attract interest from competitors. They feature a scheme, hatched in the middle of last year, that might yet see the launch of a digital-only Xbox Series X arriving in October next year.

Microsoft’s (now moot) secret codename for the project is “Brooklin” which the company planned to launch for the same price as the current Series X ($499), and which it internally described “the most powerful Xbox ever, now adorably all digital.” The new device – and this is kind of cool, depending on your aesthetic choices – would be cylindrical, with 2TB of internal storage, doubling the current specification, as well as other useful upgrades, including better wi-fi and power performance.

With sales of physical media declining and the digital-only Series S doing relatively brisk business, this doesn’t feel like a mind-blowing suggestion. (A new Series S was also leaked, codenamed ‘Ellewood’, and featuring various mid-generation upgrades, at the console’s current price)

Still, when a major platform-holder like Microsoft, with long and sensitive relationships with bricks and mortar retailers, decides to turn its back on physical media … phew … that’s a message that needs to be handled with care, as opposed to being gleefully splurged on gaming blogs.

Sony is said to be planning a digital-only mid-generation PlayStation 5 Slim next year. Earlier this year, Spencer said that Microsoft had no plans for such a configuration, telling Bloomberg: That’s not the feedback we’re getting right now. Right now, we’re pretty set on the hardware we have.” Huh.

Other papers showed Microsoft’s desire to dovetail its considerable ambitions in the cloud, with its console business. One set of presentation slides stated: “Our vision: develop a next generation hybrid game platform capable of leveraging the combined power of the client and cloud to deliver deeper immersion and entirely new classes of game experiences. Optimized for real time game play and creators, we will enable new levels of performance beyond the capabilities of the client hardware alone.”

The proposals also included information on a snazzy new two-toned game controller codenamed Sebile, and featuring upgraded haptics, Bluetooth 5.2 connectivity, “Direct-to-Cloud” pairing capabilities, and a removable battery that can be recharged. .

Other juicy stuff

Also included in the leaks were various high level emails musing various potential acquisitions including that of Valve and Nintendo. In an email to Microsoft top brass Chris Capossela and Takeshi Numoto – spotted by Axios – Spencer wrote that Nintendo is “THE prime asset for us in gaming,” adding that “if any U.S. company has any chance with Nintendo, we are probably in the best position”.

The email also stated that Microsoft was in “two fairly active mergers and acquisitions discussions,” with Warner Bros. Interactive and Zenimax, adding that such deals were “gettable by us if things align”.

In a rare insight into the negative fallout of a prime game delay, another email showed Spencer bewailing the slippage of Bethesda’s Starfield. Pointing out that “we are likely to go through a gap almost 16 months between big exclusive launches on our platform [Game Pass] and that this was “really a disaster situation” and that “we need to get much better at overall portfolio planning on our games”.

Again, this will come as no surprise to anyone following Microsoft’s efforts to populate Game Pass with top notch games, but it’s still fascinating to see how the company’s bosses were dealing with the problem, as it unfolded.

Even a few days after the massive leak, new details are emerging that shed light on the Xbox business’s internal workings, including new game proposals, charts that detail consumer spending behavior within Game Pass, and more. No doubt, someone at Microsoft will soon be taking a training session on the effective use of redaction tools. In the meantime, we are grateful to this lapse, for the informational fruits it has yielded.