Microsoft: ‘We’re moving away from being a maker of packaged goods’

The future of the games industry is in the cloud, Microsoft VP Phil Harrison said today.

He made his statement as he lifted the lid on the firm’s new London Studio: Lift London. The new studio is entirely focused on the cloud and will not be making physical video games.

Harrison said: I wanted to create from scratch a 21st century studio. Not a studio that would make retail products. A studio that would make games for the cloud. Putting together the most incredible talent ever seen in a start-up.

He added: The shift is from packaged goods to connected products. We will continue to support retail with our products for sure. But we are going to keep creating features that are enhanced and improved by the network.

Moving from being the maker of packaged products to the operator of connected services.”

Lift London is run by Rare veteran Lee Schuneman, and joins a raft of UK Microsoft studios which includes Soho Productions, Lionhead Studios and Rare.

Schuneman said: Lift London is built in a new way and staffed by the best-of-the-best. We are also here to create new IP in new business models. Europe is our main focus. We are here to deliver entertainment as a service, when, where and how you want it. We are going beyond the box, onto tablets, mobile and TVs. And we are made in London, a diverse city that’s full of opportunities.

The traditional retail games release model, massive up-front-design and development costs, will change and as we do know is change. We will still see the big blockbuster games. But for the larger, networked gamers, we need to think of new business models.”

But Harrison says creating games for retail is still on Microsoft’s agenda, and that being a cloud-based development outfit doesn’t mean there’s no room for discs.

Purchasing a product from retail on a disc is a great starting point, and 90 per cent of your content is on that disc,” he says.

By and large what you get on that disc is the extent of the product. What I would encourage you to think is that the disc is the start of a five-year relationship with the gamer, we will try to refine and extend the product over many years. It is not mutually exclusive. We don’t have to stop doing disc products to be cloud-centric.”

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