PHIL SPENCER: There was something magical about that feedback loop of actually seeing customers use the product that you had built that just, again, reinforced the whole loop about if you can spend more time in the creation on the things that really matter to your customers, you get so much more value out of that.

KEVIN SCOTT: Hi, everyone. Welcome to Behind the Tech. I’m your host, Kevin Scott, Chief Technology Officer for Microsoft.

In this podcast, we’re going to get behind the tech. We’ll talk with some of the people who have made our modern tech world possible and understand what motivated them to create what they did. So, join me to maybe learn a little bit about the history of computing and get a few behind-the-scenes insights into what’s happening today. Stick around.

CHRISTINA WARREN: Hello and welcome to Behind the Tech. I’m your host, Christina Warren, senior developer advocate at GitHub.

KEVIN SCOTT: And I’m Kevin Scott.

CHRISTINA WARREN: And I’m so excited. We have such a great guest today. We have Phil Spencer, who is the CEO of Gaming at Microsoft. I had to like wear the shirt, I had to wear the band shirt to the band concert. For anybody who is watching our video feed of this, I’m so excited to hear your conversation with Phil.

KEVIN SCOTT: Yeah. Phil is one of my favorite people and he has such a great job and has had such a great career. I mean, like, honestly, there aren’t that many people who have loved the thing that they are one of the industry leaders in, ever since they were a kid, and like at every step of the way, he has taken this love of videogames and just turned that into like a super interesting career at every step of the way.

CHRISTINA WARREN: Yeah, absolutely. And I can’t wait. Let’s go ahead and let’s get into your conversation with Phil.

KEVIN SCOTT: Awesome.

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KEVIN SCOTT: Phil Spencer is the CEO of Microsoft Gaming. He began his career at Microsoft as an intern in 1988, and since then, he’s done many, many things to benefit the gaming community, like pushing for cross-platform play, pioneering backwards compatibility within the Xbox line of consoles, and launching Game Pass.

And as a heads up to you listeners. Phil and I know each other pretty well. We’ve been on Microsoft’s Senior Leadership Team together for several years, and you may have seen us gaming together recently for the Build Conference. That was a ton of fun.

It’s so great to have you on the show today, Phil.

PHIL SPENCER: It’s good to be here. Kevin Thanks for having me.

KEVIN SCOTT: So the way that we usually start these conversations is by going all the way back to childhood, and I’d love to understand, like, how you got interested in technology, math, science, like whatever it was that got you on this journey.

PHIL SPENCER: Yeah, it’s interesting. I think for me, it probably centers on my parents, who were kind of early investors in things I was interested in. I grew up, I don’t know if it’s like a lot of kids, but as a comic book reading, D&D playing, videogame playing kid. My wife likes to say that I haven’t changed much in the years. That’s kind of still who I am.

But I remember my family bringing home first, it was a Pong machine back in the day, showing my age, and then an Atari 2600 and really getting interested in videogames in my home. The arcade down the street, my friends would ride, we’d ride our bikes down and play Robotron, Galaga, the games of the day, and had a ton of fun.

And I remember when I got my 2600 at home, there literally was this question in my mind if I would ever leave the house again, or was this going to be the end of me?

My dad, Perch, who is a chemical engineer by trade, so into tech and as in his workplace, computers are playing more of a role, brought a computer home, Sinclair ZX81. We brought it home. It was the first machine I ever had. We started typing in programs from the back of like Compute Magazine and buying books of code, you know, BASIC programs that we would type in.

I kind of learned to code debugging my typos or misprints in those magazines, took some classes at school when I was in junior high on the Apple II. That was kind of the thing.

And then I ended up in high school working in a videogame store, Computer Mart in Vancouver, Washington, sitting behind the desk. And, you know, families would come in, whether they had like a Commodore or an Atari or a PC, and wanting to buy videogames or buy a system.

And it was a cool opportunity for me to just kind of be along with different people who had come in on their journey, what was interesting to them. I was playing most of the games in the store, so I was kind of a reference for what people wanted to play.

And that kind of continued to when I joined University of Washington as a student my freshman year in the engineering department. And then luckily enough, my second year, my sophomore year, a kid who lived two doors down from me, Tai-Yi, his dad was a vice president at Microsoft in the CD-ROM group and he saw some of the videogame stuff I was doing on the Atari 20 –Atari ST it would have been, and said, “You should come over to Microsoft.” This was kind of pre-Windows 3. “And we’re doing some things on CD. We think pictures and animations and stuff will be one of the new media types.” They were just starting to create the multimedia division.

And that was my internship in 1988 in the CD-ROM group/multimedia group, and it’s been a crazy, what now, 34 years since.

KEVIN SCOTT: That’s awesome. And like, it may be an unusual path, but I don’t think it’s unusual for folks of your generation and mine, we’ve got like all of those things that you said, Dungeons and Dragons playing, comic book reading, you know, videogame loving, like, you know, right here, too. And like so many of us had that mix of things that led us into the computing industry.

You know, just completely random, like when you got your 2600, what was your favorite set of games that you were playing?

PHIL SPENCER: Well, so now you’re going to get me in game geekdom, so I will apologize in advance. I think like a lot of people, when I first got the 2600, I was obviously attracted to the games I had played in the arcades. So you had Space Invaders, you had Missile Command.

And then pretty quickly, you realize that people who were actually building dedicated games for the 2600, taking advantage of the input devices that that machine had, as opposed to the multiple sticks and buttons of like a Defender or something at the arcades, that people who were crafting unique games were the ones that were really doing more interesting things. And those are the ones I gravitated to, like your adventure type games. And because people knew that, okay, I’ve got this joystick, one button or one of the rotating with one button, and they built handcraft experience.

So going in, of course, I was going to be interested in the things I was paying a quarter for down at the local arcade. In the end, what I really glommed onto was the creators who looked at this specific device and created some of the, you know, great games that are out there. And still, like you think about Pitfall and some of these things back in the day that were just fantastic, fantastic games.

KEVIN SCOTT: Well, and I mean, I guess the interesting thing about a game like Pitfall, for instance, is not only designed for the particular capabilities of the 2600, it’s sort of different from a coin operated arcade game in the sense that it’s designed for you to explore and like you’re not having to pump quarters into your machine at home, like you owned the thing and you can play for as long as you want to. And like that was really a big different modality, I think, between the home console machines and the coin op machines, right?

PHIL SPENCER: You know, it’s funny that we’re talking about this now because I still bring this up with the teams, the fact that your business model around your videogame is not an afterthought. It’s actually core to the design of the game, or I would even say an application that anybody is building.

And not to bring it back to Xbox right now, because I’m sure we’ll get there, but I think about diversity of business models on our platform is actually part of the creative toolset that our creators have, and I think you’re spot on.

And I use this analogy quite a bit, that in some ways that the coin arcades were the first free to play games, right? They weren’t exactly free, but what they were trying to do is they built this compulsion loop around digesting quarters into these cabinets, and the core dynamic of the game, both its difficulty ramp and a bunch of things was totally created around that business model, and rightfully so. I mean, creators should get paid for the work that they’re doing.

And when then all of a sudden you got home and you’re spending 40, 50 bucks for a 2600 cartridge, you didn’t want that same experience, right? And yeah, it’s still part of the conversation today of what is free to play, what is a retail game, what is a subscription game. The fact that the business model is such a core part of the creation process is as true today as it was 30, 40 years ago.

KEVIN SCOTT: Yeah, it was always fascinating to me as a kid to look at things that were beautifully crafted things, where they just didn’t work because of the business model.

So for instance, like the ones that I’m thinking about are Space Ace and Dragonslayer, like just the most gorgeous things, more like interactive stories than videogames and –

PHIL SPENCER: Laser disc based, yeah, absolutely.

KEVIN SCOTT: Yeah and they just didn’t work for me because like, you had to stuff so many damn quarters into the machine to like, see the story unfold, whereas it could have been a much more enjoyable experience if it hadn’t been tied to the notion that you had to like pump quarters in at a frequent pace.

PHIL SPENCER: It’s so smart and it’s actually this intersection of, I would say, three things. It’s the device that you need to go play that, because the next question would be, well, why didn’t those just become 2600 games or whatever it would have been at the time, Atari 800, whatever the right machine would have been, Vic 20, Commodore 64?

Well, the problem was that we didn’t have laserdisc at home, right?

KEVIN SCOTT: Right.

PHIL SPENCER: And visual fidelity of those machines or the storage capacity of the cartridges or floppies that we were using, there’s no way they were going to hold that amount of linear video content.

So you had – well, you had to have a big cabinet because you’ve got a laser disk inside of this thing, which then challenges the business model because somebody is walking in, and they’re not going to sit there for three hours in front of the machine.

And you’re absolutely right, this how does device influence creative, and their creative was amazing for the time, these fully animated videogames, and the business model, I mean it still it’s as relevant, as I said, today, that same discussion, what device am I playing on, what technical capabilities does it have, what device, what business models are prevalent? And then obviously, the creative capability of the creators is at the core.

KEVIN SCOTT: So do you remember the first program that you wrote? So you were interested in videogames. Yeah, there’s some period of time between when you get your first console and when you go off to you UW. So how much programing did you do between the two?

PHIL SPENCER: It was constant. I mean, my first program that I ever wrote was probably Lemonade Stand in the seventh grade as part of my before school, like computer club, where you’d go in at 7 a.m. before the classes would open. I think it was an Apple II. And, you know, the instructor, who’s actually pretty good, would write up, here’s what I want your program to do. You know, it’s all text based, but it’s at least running math models.

And then once I started working at Computer Mart, we’d actually have some of the game creators come by the store because we were kind of big enough in a local area around Portland, Oregon, that I would meet people that were actually working on games. So we’d get the opportunity to kind of help out with things like installers and little things. And that’s was kind of my production work for the longest time through high school.

When I got to college, it was obviously all about writing compilers and, you know, kind of real CSS code as opposed to the stuff that I was kind of doing, and frankly, getting a real training on what is a pointer and like, you know, just real linear algebra math, doing 3D transformations for 3D games. I mean, that was my real learning.

But yeah, early on, it was kind of, here’s a problem, go write something that works. And I love that iterative process. I miss it many days.

KEVIN SCOTT: Yeah, for sure. Yeah. I mean, this is one of the things that I talk with people a lot about, like there was this beautiful thing about the simplicity of the machines that we had when we were growing up. I mean, they didn’t seem simple to me at the time, but in retrospect, yeah, they were not that difficult to approach and start doing stuff on, whereas it’s the tools are way more powerful now and the machines are way more powerful, but you also have a lot more stuff to get your head wrapped around if you want to claim that you have mastery over your whole computing toolkit.

PHIL SPENCER: I was just talking about this with somebody the other day where literally starting with when I learned, I started from the bottoms up, meaning I learned assembler, and then through assembler, I learned what linkers do and what compilers did. So I was kind of working backwards from a high level language.

And I remember when I started at Microsoft working with some amazing developers, Todd Lane and these other guys, who would, when I would write code, we would literally look at the output of the compiler to see how well we thought the compiler did, and then obviously watch the linker. And you were, as you said, it was all so transparent to you, the whole kind of pipeline to getting an exe.

I would say, one of my maybe overstretches when I joined Microsoft was, if you know anything about like Amiga, Atari ST, Apple IIgs, these were all Motorola 68000 machines. And when I got hired here, all of a sudden, I’m on an Intel-based 8086 and I’m like I’m trying to, you know, learn a whole new instruction set. And it was kind of, as most things were back in the day, baptism by fire in terms of code reviews and how stuff worked at Microsoft.

But you’re absolutely right that transparency of how things not only were built, but also ran at runtime, much different today. But frankly, the things that developers do today with writing code is well beyond what I think I would have ever gotten to.

KEVIN SCOTT: Yeah. Well, yeah, don’t be so sure. (Laughter.)

But I mean, I think one of the really interesting things technically about videogames that was true then and I think it’s still true now, although you probably got a better bead on this than the me, is that, you know, you were sort of forced into like really understanding all the low level details of the machine because the things that you were trying to do were like right there on the bleeding edge of what the machines were capable of. You were just trying to wring every unit of performance out of the machine. And that’s still true, right?

PHIL SPENCER: Yeah, absolutely. I mean, I would say one of the slight differences now with videogames – well, let me say two things. One, most games that are built are targeting multiple platforms, from mobile maybe all the way through a high-end gaming PC. So it requires a certain level of abstraction in how you’re kind of building your game because you do expect that experience to flow.

I mean, we were talking about Minecraft just a minute ago. You know, think about a game like that and the different target platforms that they have. It requires more abstraction in the code than maybe back in the day where you’re building one game to run in one place.

The other thing in a videogame today is, you know, a videogame can easily reach 50, 60, 100 gigabytes of data. And the creation of the data is the most expensive part in building a videogame, and all of that is animation, music, art assets.

So the code itself, yes, you want it to run as effectively as it can, and efficiently as it can, but at the same time, it’s not actually the critical path in getting a game done as effectively as you can. Toolchain and asset production is way more important.

So we spend a lot of cycles actually on getting – writing code to help us build a game, as opposed to just running the game, because the running of the game itself is critical, but when you think about getting that game done and making your creators on your team as effective as possible, there’s a lot more internal work that goes into building a videogame than there has ever been before.

KEVIN SCOTT: Well, you know, maybe let’s talk about that for a minute, because we’ve made reference to this teaser video that you and I made for – for Microsoft’s big developer conference, Build. And one of the things that that teaser video is trying to do is show people that, hey, we’ve got this AI abstraction layer now that you can use to, like, help you do things like make videogames more interactive and enjoyable.

But like this point that you made about how like the games themselves are so complex, that you have to build layers of tooling to help manage this complex task of making a modern videogame, so you know, maybe we can talk a little bit about that.

So just for folks who know nothing about the gaming industry, like let’s take a, you know, top title, something like, you know, Halo, for instance, like, what does it take to make a game like that?

PHIL SPENCER: Yeah. Well, you’re talking now, when you think about all of the people involved in a creative process, whether it’s the multiplayer, people playing with each other online or the single player, which in a lot of ways are games that share asset, but are separate games from a creative design construct, you might have a thousand people that are part of actually getting a game out the door. You’re going to spend 100, 200 million, maybe even $300 million to get a game done of what we call like kind of your top, triple-A franchises of today, from us or a third party. I mean, it’s as big as any Hollywood blockbuster movie in terms of the production cost of getting the game done.

And maybe there’s some ego in this statement as somebody who comes from the games industry, but I’ll say the complexity is higher because you’re kind of rewriting the film format, while you’re kind of creating the assets if you’re doing engine work at the same time. So the runtime is usually being evolved, if not created from scratch, while you’re creating these assets.

And this is why I think your point about the use of machine learning and AI, there’s always this draw from some of, hey, we can have more believable AI characters, we can have kind of algorithmically created worlds that you can go, and how cool would that be, and us in the games industry kind of come back to, and if we could just help me test this game, you know, that would be such a huge, huge breakthrough for us because it is as much about when I say tests, kind of validating the content, validating the scripts, validating the edge cases of a game. These are the things, as these games get so big, that are really, really the kind of depth of where time is spent and frankly, a lot of variability is spent in ensuring a game gets done.

We kind of know what it means to create a character or a world at least, or a scene. You know, we’ll do it a few times, and now we’ve got a benchmark validating all of that content for the tens of millions, if not hundreds of millions of players before they get it. That is the part that is just kind of not infinitely complex, but close to it, I think.

KEVIN SCOTT: Yeah, well and I think that’s a super good point around technology in general. Like, you know, you and I love technology, you know, for the sake of technology. We can sort of look at a thing and say, wow, this is interesting and cool and complicated and nuanced.

But at the end of the day, like, if the technology isn’t in service of something that people want, it’s pretty, you know, pretty useful. And like, the thing that you want in a videogame is like a – just a super compelling experience. It’s got to have a good story that, you know, the characters have to be great. It has to be, you know, visually engaging, like the music has to be – I was thinking about this the other day at, you know, how big a difference it was, you know, between the, you know, the 8-bit generation of games and the 16-bit generation, just the sound and like – and you had to up-level, you had to up-level the people who were contributing to the game because of the capability. You know, like the composition for like a game like Mario Brothers for instance, like some of those are like musically sophisticated compositions.

PHIL SPENCER: That’s right. Yeah. I mean, full symphonies now we’re using all the time to record what we do in the videogames.

I’ll say there’s another layer that maybe players don’t – if you don’t dissect a videogame, which you shouldn’t do when you play, it should just be about the fun, there’s also multiple layers of systems at work when you’re playing a videogame.

You know, we talk about videogames and what is that kind of three seconds of fun, like when I’m – and that’s the I have a controller, keyboard and mouse or touch, and what is the thing that I do over and over and over that’s kind of just so compelling?

And then I have another loop, which is maybe my five minutes of fun of like what gets me to keep playing and keep playing and I feel challenged and I feel some growth in that.

And then maybe over a five-hour, one-hour period or whatever, there’s another kind of set of systems at play to keep me, usually having to do with the economies of like I’m gaining this amount of experience points and what are the syncs of where I go spend at those and does that economy hold over the time? We have economists that are working on games that kind of help us with these things.

But the number of systems from a near term control and not, this isn’t even talking about the creative of what is the story and do I feel connected to the challenge and the characters, but the amount of kind of engagement systems that are involved in a game and testing those out, is the game actually fun, what does that word even mean, and, you know, these are things that game teams spend so much time on and there’s high variability in it.

And I think there should be, right? At the core, while it is very technically based, I view videogames as an artform and what makes a good painting what makes a good song, what makes a good TV show, I think there’s a lot of organic in that.

KEVIN SCOTT: So I think the first videogame for me that hit all of those things, that had the, you know, the three seconds, the five minute, the multi-hour was probably the original Legend of Zelda for the NES.

PHIL SPENCER: Yeah.

KEVIN SCOTT: And like I just remember getting it and like, it was sort of instantaneously fun, and then you just couldn’t put it down. My brother and I, I mean, we just – we got it for Christmas one year, and, like, we just disappeared. Like, the entire Christmas vacation was, like, gone. Do you remember, like, which – the first game like that was for you?

PHIL SPENCER: You know, I – maybe because I came from reading and comics and stuff, the early Zork adventures to me were things I spent, a ton of Infocom games, if people remember those.

And these are text, right? There’s nothing on screen other than reading of the text. But this idea of an interactive adventure and kind of the extent to which I in my head perceived was there, in reality when I played the game, like now looking back at Zork, you kind of realize there’s pathways that they send you down and the amount of variability is there, but kind of not there to the extreme that was in my head. But those are the games that really got me going.

And then a little bit maybe like your brother, and this is a total kind of 180, my dad and I would play Larry Bird versus Dr. J One-on-One basketball, and like there is no story. It’s Larry Bird and Dr. J and I’ve a one-stick and one-button controller, like the old 2600 controller.

But the visceral feeling I had when I would hold that button and Dr. J would fade away, as long as I was holding that button, he wouldn’t let go until right at when I, you know, Larry Bird starts to drop and I let go of the button and the shot is made.

And you know, those connections where you feel such agency in the experience that it’s like you’re doing it, right, I’m not being led, this is something where my impact on the experience, and a little bit like your brother is why I bring up my dad, I also see gaming as a very communal thing and my best experiences have always been played with other people.

KEVIN SCOTT: Yeah, for sure. It’s so much more fun. Like even if you’re not playing together, like having a community of people where you just sort of talk, I – and I’m not a super big gamer now, but when I was in grad school working on my Ph.D., I lived with three other Ph.D. students, and they were video gamers. This is sort of PlayStation 1 generation.

PHIL SPENCER: Yeah, sure.

KEVIN SCOTT: And like they played an insane amount of Tomb Raider.

PHIL SPENCER: Sure yeah.

KEVIN SCOTT: And I was perfectly happy to sit there and watch them play Tomb Raider.

PHIL SPENCER: Well, what a great franchise because it’s puzzle solving. There is dexterity involved, but anytime you’re playing a game where kind of everybody can contribute in the room, I just think it’s awesome. I’m playing way too much Elden Ring right now.

KEVIN SCOTT: Nice.

PHIL SPENCER: A great game from Miyazaki-san, a good friend, and congrats to them on all the success that they’ve had.

But it’s interesting how often I’m in a party and we’re all playing, it has some co-op capability, but usually we’re all playing in parallel and just kind of talking to each other about the experience that we’re had or, “Hey, I’m stuck somewhere; can you kind of come in and jump, jump in and help?”

And I’ve always loved that part of gaming, whether it’s the old BBSs I used to run from Computer Mart and people talking about games or the experience in the store, and now so much of that has gone online, just the community around the content and the creation is it’s an integral part of what gaming is about.

KEVIN SCOTT: So, you know, maybe let’s jump back to your time at University of Washington. So you knew when you went to UW that you wanted to major in computer science or that was still up in the air?

PHIL SPENCER: Like most things in my academic career, I had very little – I had no plan. I graduated from a place called Ridgefield, Washington, down in southern Washington High School. I applied to one school, University of Washington. I don’t know what I would have done if I didn’t get in, but luckily I got in.

My dad was an engineer, so he said, you’re going to join – it’s one of these schools where you kind of declare at the beginning and then after your sophomore year is when you apply you get into a school or not. So I said, okay, engineering.

My first semester, I guess, they were on a semester system, I learned what it meant to drop a class and still get a sub 3.0 grade point average. So I was quickly indoctrinated into, okay, this engineering requires real work, not just like my high school skate by.

They had a class, I think it was called Engineering 101, where it was like a one credit class. You’d go, I believe, once a week, and the different engineering disciplines would kind of come in and pitch what they were doing. And CS was not part of the engineering discipline, at least at UW.

And I ended up in graduating, my actual degree is in something called human-centered design and engineering, the HCDE department at UW, and which is this mix of kind of human condition and code, and even hardware and the interaction between all of these things. When I was there, it was scientific and technical communication. It’s changed names a couple of times.

But I found that department through this Engineering 101 class and I just love the idea that we would be sitting there working on computers, building UI elements, writing code, and that intersection of kind of the human condition and the capability of technology was just so interesting to me.

And that’s the department I joined and four years later, I was done and got offered a software development engineer job at Microsoft after my two year internship.

KEVIN SCOTT: So what was it like in those early days at Microsoft, either internship or fulltime engineer? So I obviously wasn’t there in the early days and my – you know, my impression of what it was like has been through talking with folks like you who were actually there. And there was this famous Douglas Coupland book called Microserfs that yeah, talking to a bunch of Microsoft folks who were there at the time Coupland wrote the book, it sounds like it got some things right.

So yeah, I’m just sort of interested. I mean, it was a very different time and probably felt magical because this was like when Microsoft was on its just really exponential rise, mostly because the personal computing ecosystem was on its exponential rise.

PHIL SPENCER: Yeah, a little bit like my UW decision, University of Washington decision. So, Min-Yi, who was the vice president in charge of Microsoft Press and the CD-ROM group, offered me this internship, and my choice was between going and joining or going back to Computer Mart for another summer, a job I loved. And his pitch to me, or the internship pitch was at the end of summer, I get to keep my PC that I’m working on, and that’s what flipped the bid for me and had me join Microsoft for that internship the first year. Because I was right across the bridge, I worked full time for the first two years, and I’d just kind of alternate my classes and where I was.

In terms of the environment here, you know, it was, I’m going to guess – I’ve looked at this before. I think there was about 3,500 employees when I started my internship. And what are we now, like 200,000 or some kind of crazy number like that?

KEVIN SCOTT: Yeah.

PHIL SPENCER: It – I will say the similarities are mostly in name today, like, comparing what it was like back then to what it is today. But I will say it’s still kind of an engineering-led, product led company. Back then, the transparency – everything, like I had the full Windows install base, codebase on my machine. Like, I was doing compiles of the full system. I was working on GDI and some other things with some of the team.

And the transparency inside the company, it was kind of everybody, all hands, to get whatever we needed to get done. If you were a dev and you could write code, most people were definitely willing to kind of invite you into the codebase. And there’s good and bad in that, as you can imagine in terms of quality and kind of practice and even supportability of the code that’s written when so many different people are coming in.

Hours were – we were doing 80, 90 hours a week, 100 hours a week. But I was learning. I had amazing peers and mentors around me to review, not always the easiest when you’re getting your code reviewed in those scenarios. But, you know, I excelled at a rate faster and I couldn’t imagine any other environment with the concentration and peer feedback that I have.

I was a little bit outside, and you could say I still am here in gaming at Microsoft. I was doing consumer CD-ROM, Encarta, Windows Bookshelf, these kind of thing, DOS Bookshelf. So, I wasn’t in kind of core DOS land or what was – this was pre-Windows 3.0 or any of the precursors to Office.

So, we were a little bit of the ragtag group out on the sidelines, which meant some of the things that you read in, like, Microserfs and exposed to a lot of the core Microsoft were a little bit different than my experience, but it was awesome just to see this company take feedback real time, look at opportunity real time and move. And we didn’t get all the decisions right, clearly, but that eyes wide open, led from an engineering perspective, thinking about our products and our customers, it’s something that still sticks with me today.

KEVIN SCOTT: What you just described is what… what I think folks are very lucky when they get to be a part of, like, particularly being in this intense environment where you’re working with really smart people. You are, you know, like, trying to push some technical frontiers forward. And, like, you all, hopefully, you’re sort of, you know, civil and compassionate or whatnot, but, like, you’re also just sort of moving at a rate where you just can’t not give people feedback to help them get better about what it is they’re doing.

PHIL SPENCER: That’s right.

KEVIN SCOTT: And, like, the learning that you can get in an environment like that is unbelievable.

PHIL SPENCER: I remember this one story, and it’s somebody who I still work with. His name’s Kevin Gamble, and he was at the University of Washington when I was there, and we were interns at the same time, and we both still work together, what, 34 years later. How crazy is that? And he’s in the gaming org.

But we were on the CD-ROM, in the CD-ROM group, and there was a company called Amdek that made PC-based CD-ROMs. And they wanted to bundle DOS Bookshelf with this CD-ROM when people purchased it, but they didn’t have a device driver for the CD-ROM. So, and we literally had two months to port all of the old DOS Bookshelf to kind of a new display engine that we had, write the device driver, which was going to have some impact on how our data was structured on the CD.

And it was Kevin and I with some of the kind of platform people that would help. But as you said, kind of any opportunity to make us more efficient between each other, and not just in hours or lack of food, but actual the work that we’re doing, from a debugging standpoint, from a data prep standpoint, from a build timing standpoint, like, we were doing the math, because if we could cut an hour out of our build time, like, what would that mean in this hyper-concentrated, you’ve got two months to go get this thing done for, you know, some business deal at the end of it.

And those experiences were just so eye opening. And then when you finally get it done and, you know, it’s out in the market, I don’t know, probably 10,000 people use the thing in the end. But, you know, there was something magical about that feedback loop of actually seeing customers use the product that you had built that just, again, reinforced the whole loop about if you can spend more time in the creation on the things that really matter to your customers, you get so much more value out of that. And just looking at your production pipeline through that lens, I just found, was really, really helpful for us.

KEVIN SCOTT: Well, and you know, which brings me to this, you know, this thing about you and what you have chosen to do, which is you get to make things that you put in people’s hands, and the objective of them using it is their enjoyment. And so, yeah, you can tell whether you’ve done a good job or not. Like, people either enjoy the thing that you made or they don’t. They either play it a lot or they don’t. They either, you know, like, talk about it positively or they don’t. And that is, you know, different than sometimes people who do infrastructure things.

PHIL SPENCER: Yeah.

KEVIN SCOTT: Like, I’ve been a systems person most of my career, and you have to figure out other ways to determine whether or not the things you’re working on are creating value or, like, serving a good purpose. So, how important is that to you as an engineer, like, being… having that feedback loop?

PHIL SPENCER: For me kind of personally and professionally it is really my only way of operating, is both from, like, a personal fulfillment. And I’m not… it’s not at all a judge of any kind of engineering out there. It’s just kind of how I’m wired. The… you know this because you and I have been online before. You know, I’m P3 on Xbox Live. When I’m playing online, people see my gamertag. I don’t hide it. My Twitter handle is out there, like you said.

The feedback on the work that we do, good and bad, is out there front and center. And while there’s obviously good days and bad days for myself and the teams and the products that were building, for me, that complete loop of we have an idea, whether it’s iterative on something that we’ve already done or completely new. We’re going to work that over multiple years, in the case of these big games that we were talking about, to deliver something. And that end result in the feedback that you get is the thing that gives me momentum into the next thing.

But that’s, like, I said, that’s – that’s kind of how I’m wired. I like the completeness of that. I mean, I’m enthralled by… I think, like, you think 300, 400 years ago, there’s, like, architects in Europe working on these massive churches that are going to take 200 years to build. And they’re in the middle of this, and if you’re, like, a mason, you know that you didn’t see the beginning and your life will not exist – you won’t live long enough to see the end. And these people throw themselves into these builds.

And we have similar kind of projects at Microsoft, as you know, that take, like, multiple, multiple decades, especially some of these things where they’re way out; the horizon three things. And I am just so impressed by people that have that amount of kind of intellectual drive to see through it.

For me, that tighter feedback loop is just part of how I’m wired. And I’m glad we have those people that can think longer term about infrastructure and longer term investments. It’s not just longer term, but kind of it’s at a different level in the stack, the things that we do. And the conversations, one of the reasons I always love having conversations with you, because the conversations of how different people think about these problems and opportunities are just awesome feedback into what we do.

KEVIN SCOTT: Yeah, well, but so, you know, that said, you are managing a bunch of things that take multiple years to go do. So, there’s both infrastructure things, like xCloud, for instance, and there’s also, like, these games which are, you know, like a triple-A game is a thousand people worth of complexity working over multiple years.

PHIL SPENCER: Yeah.

KEVIN SCOTT: So, how do you manage that? Yeah, it might be obvious to someone just getting into the field, like how you go, do your two-month project where you, you know, you’re porting this books project for a new CD-ROM format and writing it. But, like, a thousand people for three years to, like, get to the thing where you start getting the feedback, like, how does – how does that work?

PHIL SPENCER: Yeah, it’s been real learning for me, just being transparent on this. Like, the biggest one of these things, as I moved into this job ahead of Xbox, which is now eight years ago, which is kind of crazy to think about, is hardware. Like, the hardware timelines as a software – as somebody who grew up in software, it’s not only is it that timeline on hardware, but when you find a bug, the kind of loop to go back and fix a problem until you get your next EV build of hardware, and as you said, longer term platform things that we’re obviously doing on Xbox has been a real learning.

I grew up at Microsoft. Prior to the head of Xbox, I was head of our Studios organization, so building games. And I think for me, when you had the portfolio of things going on, you kind of just daisy chained people, like your games in your head of, okay, every year, we’re going to have three or four or five releases and I’ll get my endorphin hit from those things, knowing that the things that will come the following year probably have been in development for three or four years. And that – that kind of just – that portfolio of things, different stages were very useful.

When I came into this job and took on the hardware requirement, the platform work, having some ideas, like, Game Pass and xCloud, which we – xCloud being our cloud streaming, Game Pass being our gaming subscription that we had to invest in over time, it was learning for me, both as a leader and as a member of the team, on how to just structure my thinking differently, finding people on the team that had that capability beyond what I did, the listening and learning. And it’s just been part of my growth in this role over the years.

KEVIN SCOTT: Yeah, it’s the thing… the thing that I never really appreciated until I was working on my PhD is, like, the role that stamina plays in trying to do something complicated where, you know, you have to have some framework for how you’re going to break a big problem down into, like, a bunch of manageable chunks. And then you’ve got to have the stamina to just go do all of the chunks until you’re finished.

And, like, I know you basically are working on a hundred PhDs at once, given the complexity of all of the things that are in the pipeline. And it must be an interesting thing, helping all of those teams, like, maintain that focus and having the stamina to get everything done.

PHIL SPENCER: Yeah, and I think your point about decomposing the problem a bit and making it digestible in more meaningful kind of chunks of time than five, six, seven years is really, really useful.

The other thing I’d say, and this is different. Like, we’re kind of an anomaly inside of Microsoft and maybe even gaming in tech, though I think VCs, this probably resonates a little more, is we are a kind of portfolio business. We’re going to ship 10 things. All of them might have been kind of these very expensive, very long endeavors that we’ve talked about. And you might have two or three of them that you would earmark a success at the end of that.

That’s just kind of entertainment, right? Whether you’re writing a book, making a movie, making an album, your hit rate, 20, 30, maybe 40%, if you’re kind of crazy good, is what the hit rate is for most at-scale publishers. And you’re sitting inside of Microsoft with kind of tried and true franchises like Windows and Office and now growing in Azure.

And there is a little bit of an impedance mismatch when you’re walking in and you’re showing this portfolio of things. (Laughter.) And you might get the obvious question of, okay, which ones of these are going to work? And you can’t rank it by budget, you can’t rank it by time or by what’s hot today. And, you know, that’s, I’d say, another change or another difference.

You’ve got this longevity kind of opportunities you talk about and how you break down the problem, and then at the end of these things, making every team feel like they succeeded, knowing that most of your teams are likely going to be in a situation where they didn’t hit their own goals and expectations. And that stamina that you talk about has to not only live inside of the existing project, but you hope that, coming out of another project, regardless of the outcome, there is a slingshot into more stamina for the next thing that you want a team to go do.

KEVIN SCOTT: And so, related to that, like, how do you get people to continue to take creative risk when the risks that they may have taken last time didn’t pay off the way that they wanted it to?

PHIL SPENCER: Yeah. I mean, one thing is the industry will do it, right? It’s – we’re in an industry just like, you know, technology for Microsoft that you’re either kind of moving forward or you’re moving backward, relative to the expectations of our customers. We have very few customers, even taking the original Zelda game that you loved. It’s still a great game today, but if it launched in the sea of games that are out there today, and you and your brother went and picked that up, it prob – you know, it’s going to have a different equation to that game becoming a success.

You’ll still have your Minecrafts and things of the day that aren’t about how many pixels can we go push per second on screen. But when you’re… So, the industry will set the bar for the teams. And our teams are very, very consumptive in terms of what our art form is about and where the bar is. But it is true, like, that after something launches, you have to – you want to sit back and be transparent with the teams, both about what went well and what did not, in terms of our own process, and then what we learned so that you have more momentum in the next thing.

One thing I’ve learned in my role is for me to be very transparent about my own journey and the areas where I succeed and the areas that I fail, you know, and every day. Every day, I make some decisions that are good or do some things that are – and every day, I make some mistakes.

And, you know, Satya likes to talk about growth mindset, which I think is an important kind of framework here of it’s not about doing the perfect thing every single time, every single day. It’s about on this journey of growth and reflection and learning.

And so, for myself, when I’m working with the teams, I try to be transparent about my own learnings. And my leadership team, I think they reflect that as well, but that’s a cultural thing that you have to start very early on, because people in the end, what you’re really looking for is teams that feel safe. They feel safe taking the risk and that, like, there’s so many facets to what makes a team feel safe in today’s world.

KEVIN SCOTT: Yeah, I had two different bosses a long time ago that had two pieces of feedback for me that were, like, pretty pivotal. One was like, if you’re not failing sometimes, like, you’re probably not trying hard enough.

PHIL SPENCER: That’s right, yeah.

KEVIN SCOTT: And then, you know, I had another boss where, you know, God knows I have made many, many mistakes. And so, you know, like, in the ad systems that I run in the past, you know, a system outage could mean millions of dollars of revenue an hour that you’re losing. And every time one of those things would happen, I had this boss who would say, well, you know, be very calm in the moment, like, get the problem fixed and then make sure that you’re getting your K-million dollars’ worth of learning out of this – out of this episode, because each one of them teaches you something.

PHIL SPENCER: That’s exactly right. I think it’s very good learning. I – a friend of mine runs a company called Supercell that has a game called Clash Royale, Clash of Clans back in the day. And he used – when teams would set goals and ship, and if they had great success, he would take them all down to the local pub. They’d all have a beer. When teams didn’t have – reach their goals, he’d take them down and they’d all have champagne, trying to create this idea that setting that bar high and hitting the goals or exceeding the goals is always a special moment, but the outcome is actually in many ways decoupled from the effort.

We put our best and best people and most effort into some of the things that didn’t work. And to try not to create a direct causality between here – like, all of the serendipity that goes in to making something a hit. Why is Minecraft a hit, right? Why, when Marcus puts up Minecraft as this Java XE on a server, or you know, you can look at something, like, a Roblox or a Fortnite. I mean, trying to excel-ize the success of in kind of human entertainment is so, so difficult. And yeah, I think that those are words of wisdom your boss was giving you.

KEVIN SCOTT: Well, so, you know, let’s talk a little bit more about your career. So, you – you’ve been… you’ve been at Microsoft for 34 years. (Laughter.) And obviously, it’s worked out really well for you. Do you have any advice for folks about how to grow professionally when they are, you know, sticking with a company for a long time or, like, maybe even if they’re not? Like, you must’ve had some sort of theory of career, you know, given where you’ve gotten, right?

PHIL SPENCER: You know, the things I can look back on and say, what are those critical moments or decisions that have led me to what I think is, you know, the – just an amazing opportunity I have here leading the gaming org with an amazing team, one is just the power of human connections and also being conscious. It makes me reflect on something sideways to that or related, is the power of privilege and some of those connections and how others might not have them, and how I want to lead and ensure that I’m opening up as many connections for as many people as possible.

But when I look back on, like, forks in the road for me at my Microsoft career and what kept me here, what kept me motivated, it was usually around my connection to people who I wasn’t working with directly at the time, and somebody just reaching out and saying, hey, you should give this a try. You should look at this. Here’s an interesting opportunity.

And it’s really stuck with me that through my career, I love to make those connections with people, to listen to their journey, to keep those connections as warm as I can, not as any kind of strategy on what my next job might be. But when I reflect back on it, so many of the career steps that I’ve had have been about knowing somebody and the connection, and that being kind of a first step in a multi-step journey to kind of taking the career step.

And the other two things I’ll say quickly, almost every job I’ve taken, I think I can say every job, including that original internship, I was not prepared for. And I’ve just kind of learned that, even when this head of Xbox job came open through a process of attrition, everybody else kind of left and I was here, the imposter syndrome that I have walking out on an E3 stage or leading teams, talking about hardware, something I didn’t at the time know much about, but kind of preparing yourself for those moments that the serendipity of luck meets connection meets just, as I said, some kind of the privilege that’s there at the time, I’d just encourage people to bet on themselves when they’re ready. And when those opportunities come, jump.

And like I said, every decision I’ve ever made on my career felt like a year or two earlier than I should have done it. And in hindsight, some of them were, but other people were making decisions to bet. And all I could do is prepare myself as openly as I could and be transparent about my journey in that role.

KEVIN SCOTT: Yeah, I think that’s really, really good advice. I mean, for what it’s worth, like, I think I’ve had the same experience as you. Like, I feel imposter syndrome all the time. Like, what qualifies me to do the job that I’m doing? And I’ve always felt it from the time that I was a kid, but I also have always had this…It’s not even overconfidence. It’s like just crazy curiosity. It’s like I just can’t help myself, but, like, go see what the thing is going to be like.

And so, I think, you know, whatever it is, like, that is what you just gave people is really good advice. Like find that thing inside of you to overcome your imposter syndrome or your hesitancy or your – you know, you don’t feel worthy or prepared, and just go do it.

PHIL SPENCER: And I think it’s so spot on and what I have found – I mean, you’re such a great example of this. Like, what, five years ago, you and I didn’t even know each other. And now, I consider one of my good friends here at this company. And everybody in every position at the base level is a human and has human emotion about their – where they are. They’ve got friends and family connections that kind of are such a part of who they are and their makeup, their history, what they want to accomplish.

And those feelings that you have as an individual about, whether it’s impostor or I’m not ready or, you know, we’ve all been in that same position and might be even at that time. (Laughter.) And I love how open we’ve been able to have it at kind of Microsoft on these – these types of topics. Finding a place where you can have safe conversations, I’ve also found is – is very helpful.

KEVIN SCOTT: Yeah, for sure. Like, finding your people where you can just be yourself, super important.

PHIL SPENCER: That’s right. That’s right. And that’s maybe goes back to that connection. Those might not be people that you work directly with every day, but having that, whether it’s – my wife and I have been married 31 years. We went to high school together. And I’ve often said, Kelly, when I’m standing on stage at E3, she’ll say, hey, I remember you as that 17 year old with a mullet driving your Ford Pinto. So, don’t think you’re all that. But those people that kind of connect you back to being human and fallible and on your own journey, yeah. I think that’s critically important. It has been for me, absolutely.

KEVIN SCOTT: Yeah. Yeah, I could not agree more.

So, we’re almost out of time. the last question I like to ask everyone, and this may be a hard one for you, given that you are maybe the best mix of, like, career and personal I’ve ever seen, like, you sort of do what you love, but in your spare time what do you enjoy doing other than gaming, which I know you do a lot?

PHIL SPENCER: (Laughter.) And snowboarding and reading my comics. You know, I – what I have found is I just enjoy – it’s kind of what you were talking about, that learning process. And, you know, the reason I love snowboarding is because I still think I’m fairly mediocre at it. I go up every weekend with some people that are a lot better than me and I challenge.

But I will say the thing that’s becoming more and more a part of my life is my two daughters and as they go into their adult years, they’re 26 and 23, and just seeing them kind of having, frankly, the same conversation that you and I are having now as they’re charting their path is so, so awesome. Like, it is just – I have an infinite amount of time for them and the journey that they’re on. They’re much better humans than I will ever be. You know that; we’ve talked about what they’re doing. And they’re just so special.

Like, I said, Kelly and I have been together for forever, and seeing where our daughters are going, and they don’t always make all the decisions we would make, and they go through this same learning journey that we were just talking about. But it’s special, right? It’s special to see people who are so important to you finding their own path. And as somebody who’s older and seen a few county fairs to give some direction when I can, it’s become a really important part of my life. It obviously was for so many years, but now as they’re adults, moreso, and it’s awesome.

KEVIN SCOTT: That’s super cool, man. Well, thank you so much for taking the time to chat with us today. This has been a great conversation.

PHIL SPENCER: Thanks, Kevin. I appreciate you doing these. Really, congrats. I look, I went – I watch these. I listen to, like, all the guests that you’ve had. You know, fantastic job, really good.

KEVIN SCOTT: Oh, thank you so much.

[MUSIC]

CHRISTINA WARREN: Well, that was Kevin’s conversation with Phil Spencer, and, oh my gosh, I could have listened to the two of you talk for another couple of hours. I’m not even joking. Like, I would watch or listen to an ongoing conversation with the two of you. There’s so much interesting things that I got from that.

But the thing I wanted to start with, Kevin, you know, over the last four-ish years or however long we’ve been doing this podcast, one of the common themes for so many of the technologists that you’ve talked to has been that they got into and interested in computing through video games. And I know that that’s similar for you and I as well. And that’s also was kind of a similar origin story for Phil.

I’m curious, like, what do you think that it is about games that pulls people in and makes them want to explore other parts of technology, whether it’s computing or hardware or, you know, even, like you know, biotech? What do you think it is about gaming that really has been that kind of draw for so many people over, at this point, so many decades?

KEVIN SCOTT: Yeah, they are really special things. I think one of the things, for me at least, is they were the really first engaging technical things that I encountered. So, you know, when I was little, you know, the things that I was obsessed with before video games were books, and comic books and science fiction. And, you know, they were all things that sort of let me escape the world that I was in and, like, enter this world of imagination. And videogames were just, like, all of that turned up to another level.

And as soon as I had played a video game on a computer and realized that it was just a thing that someone else had made, I was dying to understand how they worked. And I think it’s just a powerful hook for folks who are sort of curious about the things that engage them.

And I see it with my youngest daughter, who, at 11 years old, is also just completely and utterly obsessed with today’s videogames, and, you know, has taken some classes in programing already, at 11 years old because – and she can’t really figure out whether the way that she’s going to engage with video games is by learning to code so she can make them herself or by becoming a streamer or an influencer or, you know, YouTuber or a TikToker, but like, it’s just amazing to me what video games do for people that, like, make them want to, like, invest in them beyond just the playing of the game.

CHRISTINA WARREN: Yeah, no, I think about that, too. And I think that if I were 11 years old now and not the undisclosed age that I am now, I would be a lot like your daughter and I would be trying to figure out, okay, I know I want to do something with this. And I think you’re right. I think there’s – it has that that pull, it takes you into something else rather than just being a participant where you want to be a creator, too.

I wanted to ask you, you know, you and Phil talked about so many things and both of you, actually, I think are really interesting in that you have very strong, like, technical backgrounds in engineering things, but you’ve gone on to be managers and business leaders. What do you think – I guess, you know, speaking for yourself a little bit, and I know you know Phil, too, what was it – I guess, when did you decide that you wanted to kind of make that sort of transition into thinking not just about the things that you’re building, but also about the way that the businesses are run?

You know, Phil was talking about how thinking about the business model is a pretty core component to gaming, to building games, which I thought was interesting. But I’m curious from your perspective, like, when did you kind of make that switch in your mind from just wanting to focus on the tech to also thinking about some of the bigger business challenges and opportunities?

KEVIN SCOTT: Yeah, it was a really super clear moment for me. I just realized over a short period of time that the interesting things that we were making with technology were so complicated that there was zero hope that one person was going to build an interesting thing all by themselves. You know, it’s still possible. Like, single creators do all sorts of interesting things, but, like, a lot of the stuff that runs their world is the effort of lots and lots and lots of people working on things for long periods of time.

And I made my decision to become a manager when I was at Google. And I just sort of looked around me, and we were hiring all of these people. So, I helped start Google’s New York engineering office. Like, I think I was the 10th engineer there. Like, my boss, Craig Nevill-Manning, had actually started the office and I was there at the early stages.

And we were hiring all of these really great people from Bell Labs and from, you know, investment banks and whatnot. Just, and they were better engineers than I was. I was pretty good engineer. But, like, we were hiring people that were, like, so much technically better than I was and, like, some of the people who were my computer science heroes who worked at Bell Labs.

And I decided that maybe the thing that I could do for them is to help organize the effort that they were undertaking so that they could have as much impact as humanly possible. And, like, it was just this crystal clear moment. And I was like, okay, well, I am probably going to be of more service to the people around me by helping to lead them than I will be trying to be one among them as, you know, just another engineer who’s not quite as good as they are.

CHRISTINA WARREN: No, that makes sense. I have one more question for you. I know that you told Phil that you don’t have, you know, time to kind of play games, like you used to. But have you been playing any games? Is there any games that you picked up in the last year or so that you’ve had fun with?

KEVIN SCOTT: (Laughter.) I tend to play these games where I know they don’t take much time. So, I am embarrassed to say the very first thing that I have to do every morning is I play Wordle. I play the New York Times Spelling Bee. And, like, occasionally I’ll do the little short daily crosswords. And I’m very disappointed in myself when I – (laughter) take more than five, or more than four guesses to get the word in Wordle. Like, I track my distribution like crazy. (Laughter.)

CHRISTINA WARREN: Same, same here. I actually – I’m one of the weird people who, like, I tend to go to bed after midnight. And so, the thing that I go to bed to every night is I play Wordle. And then I’m like, all right, the new Wordle’s out; I can play. And then I go to bed either happy with myself or a little annoyed and like, all right, tomorrow – tomorrow, I’m going to get it in three, or whatever the case may be. (Laughter.)

KEVIN SCOTT: But the last, like, real, real video game that I enjoy playing is I bought Minecraft Dungeons for my kids to play, and I wound up playing it more than they did it just because it was so fun.

CHRISTINA WARREN: (Laughter.) That’s awesome. That’s great. I love it.

All right. Well, that does it for today’s show. Thank you again to Phil Spencer for joining us. And if you have anything that you would like to share with us, you can e-mail us at [email protected]. And remember, you can now follow us over on YouTube as well for full video episodes of Behind the Tech. So, if you want to see the video version of this great conversation with Kevin and Phil, be sure to check that out. Thank you so much for joining us.

KEVIN SCOTT: See you next time.

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