Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the main topic discussed in this episode?
Welcome to 2026. It's a year where you're going to be hearing about the same handful of people and companies over and over and over with no end in sight because they own everything. Welcome to TripleClick, where we bring the games to you.
This week, we are talking, of course, about Xbox, again, as their new leadership is reportedly planning a bloodbath of layoffs and studio closures in the coming weeks. Cool. Great. Let's get into it. I'm Kirk Hamilton.
I'm Maddie Myers.
And I'm Jason Schreier. Hello.
Hello.
Hello, my friends. It's so nice to see you both. Hello.
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Chapter 2: Why is Xbox facing layoffs and studio closures?
Did you guys see that the New York Knicks are NBA champions?
I did see that.
I did.
I figured you were probably excited about that.
Well, I'm not that excited, as we discussed yesterday. Last week, it's not like I'm a Knicks fan, but New York is pretty crazy. It's very funny to see like grown adults walking around with Knicks jerseys everywhere and people just talking about them constantly. There's excitement in the air.
Given everything else that's happening, it's nice that there's just this thing that people are excited about that is really cool. I mean, I watched the highlights from that game. Was it game four? The game with the incredible comeback? That was some amazing basketball.
It's funny you say that because all of them in every single game, the Spurs were up by double digits and four of them, the Knicks came back to win.
There was the one that was like a record-breaking comeback.
Yeah, game four was the one. They were down by 29. The farthest anyone's ever been behind.
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Chapter 3: What listener questions are raised about Xbox's future?
We don't have sponsors. We don't deal with any of that stuff. We are not beholden to anyone. We just make the show. We own the show. And we're very happy to be a part of our network, Maximum Fun, which is a listener-supported network. So MaximumFun.org slash join. Go there. Sign up to become a member. Get a ton of bonus episodes, including a recent one about...
the show Players, the directors of which are going to be making an interesting-looking DC show we just found out, which is kind of cool, a show about Jimmy Olsen.
Yeah, I'm excited for that.
And a million other bonus episodes. This month we will be doing a spoiler cast about 007 First Light. which we all played and are in the process of finishing. So that'll be a kind of Bond conversation. There's a lot of stuff we didn't get into in the triple play on that game because there are so many one-off things that are fun if they're unspoiled.
So I think it'll be a really fun conversation about sort of what makes Bond Bond and what that game does well and what could be improved in the next one if indeed IO gets to make the next one. Yeah, let's hope so. Yeah, let's hope so. Maximumfund.org slash join, become a member, support, triple click and independent media. Before we get into our topics for the day, a quick correction. Okay.
Last week I made the mistake of talking about a Star Trek show that I haven't actually watched. And while I said that, I still made a mistake about it. So last week I mentioned an upcoming Star Trek, it looks like horror survival game from Team Bloober, Bloober Team. It's called Star Trek Shadow Frontier and it stars Rolaran, a notable Bajoran character from Star Trek The Next Generation.
who I mentioned. I think I kind of said I had mixed feelings about her just because some of her episodes aren't my favorite episodes of TNG. But she's a cool character and has a lot of potential as a character and is really widely beloved. And she's going to be the main character of this game. I also said she was on Deep Space Nine because I thought she was.
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Chapter 4: How does Microsoft handle negotiations with game studios?
And I've never watched Deep Space Nine. I think I said as much. But as it turns out, Roe Laren was not on Deep Space Nine, but a fun bit of trivia. So originally, the creators of Deep Space Nine wanted to get Michelle Forbes, the actress who plays Roe Laren, to be on Deep Space Nine, to have Roe Laren be a character.
Because Deep Space Nine has, like Worf is on that show, there's characters from... From the next generation. It takes place at the same point in the timeline. And then Michelle Forbes turned it down. So they wrote a new Bajoran character, a character named Kira Nares.
Kira Nares.
Kira Nares, who is played by Nana Visitor, who is a beloved character now.
Love her.
And I understand that Deep Space Nine, Maddie, you have seen it. It's kind of a lot about the Cardassians, right?
It is. It is, among other things. It's funny that I didn't catch this, but it's because I watched these two shows at the same time because they are set in the same time period. So I should have caught you and I didn't.
And you're a racist against Bajorans. That's true.
But I do think the Cardassians are a superior race and I am in favor of everything.
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Chapter 5: What are the implications of Microsoft acquiring game studios?
It is. So anyways, I just wanted to issue that correction to remember not to get over my skis, especially when talking about Star Trek. And one fun fact that I had kind of forgotten that I will close this correction with is that Michelle Forbes, who played Rolaren, also played Admiral Kane on Battlestar Galactica. Now, that makes sense.
There's a lot of creative overlap between Battlestar Galactica and... And TNG specifically, because Ron Moore, who created Battlestar, was a writer and wrote some of the best episodes of TNG. But Michelle Forbes turns up, and I'm sure a lot of people watching the show were like, oh, my God, it's Rolaren playing Admiral Kane, who's this major antagonist during maybe the best arc of that show.
I, of course, had no idea back when I watched Battlestar because I hadn't seen TNG. And so now I learned that in the process of learning about this mistake that I made. And I think that that's a pretty cool, fun fact. It is cool.
So anyways. All right. When you guys talk about Star Trek, I think I know how my wife feels when I talk about sports.
Have you not even seen Battlestar Galactica, Jason? I feel like you would like that show.
Wow. That would be a fun one for a rewatch sometime. That would be like really good Beanscast stuff. That's a great show, Jason. You would really like it.
It does have some seasons that are bad, I think. But it's also got some great seasons.
Oh, I'm not saying it's a flawless show. It would just be an incredibly fun show to watch and talk about.
Hard sci-fi is generally not for me.
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Chapter 6: How did the COVID-19 pandemic impact the gaming industry?
So that's worth noting here. Like also that's worth noting as part of this is that like this is going to be a bloodbath. It is going to be more than these three. I can say that for sure. And it's going to be cuts all around. I mean, the full picture of this won't be clear for another couple of weeks, but it's going to be real bad for people who are working at Xbox.
I wouldn't be shocked if we wind up in a world where Xbox is like doubling down on just the big franchises and that's it.
That's what Sharma said she wants to do, right?
Yeah, I mean, she said she wants to put more investment into Fallout and Elder Scrolls and so on and so forth, which, I mean, makes total sense. The fact that they had this hit show without an actual new game to correspond to and take advantage of that success is pretty wild. It is. Yeah, though...
focusing on those to the exclusion of everything else as a strategy. That's the big question. I would at least question that. Yeah.
I mean, that's when you get into this whole idea of, of like margins and what they actually mean, right? Like I talked a little bit about this on blue sky. I think just to clear up for people what a profit margin actually is, it's basically the percentage of your revenue that you're keeping as profits.
So if you have a hundred dollars in revenue, but you've spent $97 and you only keep three, $3 of that a hundred dollars, um, That's a 3% profit margin. So essentially you're spending $97 to make $3. So a profit margin doesn't reflect actual profitability in terms of the amount because that 3% could be $30 billion.
You could be making obscene amounts of money and still only have a 3% profit margin if you spent $970 billion to make that $30 billion. Right. Um, so it doesn't reflect profitability. What it reflects is efficiency.
And so if you're a business like Microsoft and you have, um, Azure and other areas of your business that have incredibly high profit margins, then why are you spending a hundred billion dollars on Xbox to only make $3 billion when you could be spending that money on Azure and making $40 billion, et cetera, et cetera. That's kind of the simplified version of how the math works in terms of margins.
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Chapter 7: What are the challenges of working in the gaming industry today?
Yeah, I mean, as far as what studio heads are actually doing right now, I don't know 100% what the answer is to that question. I think a lot of them are calling up lawyers or bringing in maybe agents to scour the scene and see what else is out there, what other kind of buyers are out there, because a lot of people lean on like...
agencies to be like okay can you connect me with this publisher and see if they're interested in buying us or can you connect me with this potential investor and see if they want to find us maybe one of these companies will be one of these studios will be like hey i can go and find a publishing deal at this other company maybe we'll go independent
but with a publishing deal, or maybe will be acquired. And they have to figure out what that looks like. They're probably calling up accountants and figuring out what the money looks like. And then as far as the negotiations, I mean, this is me just kind of speculating because I don't know what the conversations are like between, say, Tim Schafer and people in the Xbox sphere right now.
But it could be conversations like, hey, what does this look like as far as this IP? What kind of commitments can we make to get this IP back? Or like what kind of deals can we strike regarding that IP and what that looks like? Could we get Psychonauts back if we agree that the next Psychonauts game will be on Game Pass in perpetuity?
Like that sort of thing can be the kind of the horse trade of it all. And it's really complicated because there's like so much money at stake and so many people's livelihoods at stake here. Yeah.
Yeah, and it probably depends on how each of these studios is actually doing financially, which we also can only speculate about. And for each of them, there might, I imagine, be a different question of whether going independent, quote unquote, is even possible. For some of them, it might only be possible to be sold elsewhere.
So then I would think the networking and wheeling and dealing that the studio heads are doing could be very different. And also, what is the actual valuation of each of their IPs, that is one of those things that feels kind of like magic numbers to me because I'm not an expert in this.
But I think even if you are, there's a little bit of vibes associated with that because it's like, okay, what is Psychonauts 3 actually worth if it were to exist? And perhaps it's Tim Schafer's job to make the argument of how much he thinks it could be worth, how much he thinks it could sell as compared to 2 or even 1. And that speaks to how valuable his company is.
But then also he has to consider how valuable is any other possible game that Double Fine could ever create and how valuable is each of his employees. I mean, that is so stressful to even fathom, to be thinking about those numbers and making those arguments.
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Chapter 8: What are the pros and cons of going independent for game studios?
That changed when they were bought by Microsoft. If they were to go independent again, it would again turn into that model where they're funding themselves based on contracts for future games. Right now, after Killing Keeper, they have a new game that Tim Schafer is spearheading. They mentioned this in the end of the Psych Odyssey doc in the epilogue.
They mentioned that Tim Schafer has a project of his own. So it's possible that they spin out and either keep working on that with Microsoft and Microsoft funds them to keep working on it. Or maybe they find another buyer for that project as part of this whole process. I don't know. It could look like a number of different things.
And it could mean that they have to lay people off who don't fit into that or who they can't afford to to keep employed along the way as part of that. I don't know.
Maddie, something you were saying about trying to determine the value of psychonauts. Video games are an industry and people need to sell things, but it's such a challenging thing to do. I mean, just thinking about this as a creative work and something that actually tells a meaningful story and means something to the people who made it.
I make art and I don't have to sell it or think about how much it's worth. And that, I think, is a good way to make art. And it must be so hard to look at something that you've made that's been so hard to make, that's so meaningful, and in Psychonauts' case, really genuinely great, and then have to put a number at the end of it.
In particular, because after the Xbox exposition, they were basically told, well, you're coming to Xbox, you know, this is like during the Phil Spencer era, you're coming to Xbox and this is going to be on Game Pass and like we're all about Game Pass. So as a result, you can just make this really cool, artistic, beautiful thing and it's fine.
And then, you know, I'm sure when they started on Xbox. Keeper, this is like a Lee Petty, I would guess, passion project. The art in that game is beautiful. Lee Petty is an artist, an art director. He made something just totally gorgeous and weird and cool. And yeah, maybe only whatever, some small number of people played it relative to the Call of Duty.
But they were, again, they had been told like, well, just make Keeper, make a cool game about a lighthouse. Like it's going to go on Game Pass. It'll be cool. And so they finally could just start thinking about their art. as art, as just a thing that they want to make. And so, hey, Lee Petty, all right, man, it's time. Make this cool thing. And then that changed.
And of course, this happens when you get bought. We've run into this in media, right? You get bought by someone. They tell you things are going to keep being the way that they were. And then the market changes. The incentives change. They change what they're telling you to do. And suddenly what you're doing isn't good enough.
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