Microsoft gaming chief Phil Spencer says Starfield is seeing ‘huge demand’
Phil Spencer, CEO of Microsoft Gaming, appears at the Political Opening of the Gamescom conference in Cologne, Germany, on Aug. 23, 2023.
Franziska Krug | German Select | Getty Images
Microsoft is seeing “huge demand” for its new Starfield video game, Phil Spencer, the software company’s CEO of gaming, said on Wednesday.
“We think this game is going to be available to literally hundreds of millions of people on the devices that they already own, and looking to make this game as accessible as it can be to players,” Spencer told CNBC’s Steve Kovach.
The game, described as “the first new universe in 25 years” from Microsoft’s Bethesda Game Studios, appeared on Wednesday on PCs, Xbox consoles and other devices accessed through the cloud, for those who pay for the Game Pass subscription service. Microsoft picked up the game through its $8.1 billion acquisition of game publisher ZeniMax, the parent of Bethesda.
While Microsoft is aiming to make its games widely available, the company also wants to ensure that its consoles have some notable attractions as it competes with Sony’s PlayStation and Nintendo’s Switch. Gaming accounts for 6% of Microsoft’s revenue, and Xbox content and services revenue grew 5% in the second quarter, faster than Windows, devices and some other parts of the company.
Gaming has taken center stage at Microsoft as the company tries to finalize the $68.7 billion acquisition of publisher Activision Blizzard, which makes Call of Duty and other franchises. The deal hit regulatory snags, but is still poised to close.
Starfield is an expansive open-world game with over 1,000 planets for players to explore as they build and buy spaceships. Before the acquisition, ZeniMax was planning to release the game on PlayStation, Jim Ryan, CEO of the Sony Interactive Entertainment business, said in a taped appearance at a hearing in San Francisco in June in connection the Microsoft-Activision deal.
Ryan said he wasn’t a fan of Starfield becoming a Microsoft exclusive, which would signify that it wouldn’t come to other consoles.
“We’ve had more players for any next-gen exclusive than we’ve had this generation all up,” Spencer said. He was referring to the current consoles, the $500 Xbox Series X and $300 Xbox Series S, which both went on sale in 2020. Those who bought premium editions of the game got early access last week.
Spencer said Starfield is the most wish-listed game the company has had on the Steam game store. On the review website Metacritic, Starfield currently has a score of 86 out of 100, based on 55 reviews from critics.
Spencer said tens of millions of Game Pass subscribers were getting a chance to play Starfield on Wednesday. As of January 2022, Microsoft said Game Pass had over 25 million subscribers.
Spencer stopped short of proclaiming that Starfield would debut on the PlayStation, but he is promising that some of Activision’s most popular titles will remain available on the PlayStation for years to come.
In July, Sony signed an agreement that would keep Call of Duty games on PlayStation for a decade. Microsoft has been working to resolve regulators’ concerns about the pending Activision acquisition by assuring it will keep games on Nintendo consoles, Nvidia’s GeForce Now cloud gaming offering and other services.
Microsoft announced plans for the Activision Blizzard transaction in January 2022. It was supposed to close by June 2023, but the companies said in July they had agreed to push back a deadline to complete the deal to Oct. 18.
In August, Microsoft submitted a new proposal to the U.K.’s Competition and Markets Authority that would involve transferring to game publisher Ubisoft the cloud streaming rights to Activision’s PC and console games for 15 years if the deal closes.
WATCH: Microsoft says it worked hard to address regulatory concerns over Activision Blizzard deal
Cheng Xin | Getty Images
Okta on Tuesday topped Wall Street’s third-quarter estimates and issued an upbeat outlook, but shares fell as the company did not provide guidance for fiscal 2027.
Shares of the identity management provider fell more than 3% in after-hours trading on Tuesday.
Here’s how the company did versus LSEG estimates:
- Earnings per share: 82 cents adjusted vs. 76 cents expected
- Revenue: $742 million vs. $730 million expected
Compared to previous third-quarter reports, Okta refrained from offering preliminary guidance for the upcoming fiscal year. Finance chief Brett Tighe cited seasonality in the fourth quarter, and said providing guidance would require “some conservatism.”
Okta released a capability that allows businesses to build AI agents and automate tasks during the third quarter.
CEO Todd McKinnon told CNBC that upside from AI agents haven’t been fully baked into results and could exceed Okta’s core total addressable market over the next five years.
“It’s not in the results yet, but we’re investing, and we’re capitalizing on the opportunity like it will be a big part of the future,” he said in a Tuesday interview.
Revenues increased almost 12% from $665 million in the year-ago period. Net income increased 169% to $43 million, or 24 cents per share, from $16 million, or breakeven, a year ago. Subscription revenues grew 11% to $724 million, ahead of a $715 million estimate.
For the current quarter, the cybersecurity company expects revenues between $748 million and $750 million and adjusted earnings of 84 cents to 85 cents per share. Analysts forecast $738 million in revenues and EPS of 84 cents for the fourth quarter.
Returning performance obligations, or the company’s subscription backlog, rose 17% from a year ago to $4.29 billion and surpassed a $4.17 billion estimate from StreetAccount.
This year has been a blockbuster period for cybersecurity companies, with major acquisition deals from the likes of Palo Alto Networks and Google and a raft of new initial public offerings from the sector.
Okta shares have gained about 4% this year.
WATCH: Earnings will drive small cap outperformance, says Bank of America’s Jill Carey Hall
Marvell Technology Group Ltd. headquarters in Santa Clara, California, on Sept. 6, 2024.
David Paul Morris | Bloomberg | Getty Images
Semiconductor company Marvell on Tuesday announced that it will acquire Celestial AI for at least $3.25 billion in cash and stock.
The purchase price could increase to $5.5 billion if Celestial hits revenue milestones, Marvell said.
Marvell shares rose 13% in extended trading Tuesday as the company reported third-quarter earnings that beat expectations and said on the earnings call that it expected data center revenue to rise 25% next year.
The deal is an aggressive move for Marvell to acquire complimentary technology to its semiconductor networking business. The addition of Celestial could enable Marvell to sell more chips and parts to companies that are currently committing to spend hundreds of billions of dollars on infrastructure for AI.
Marvell stock is down 18% so far in 2025 even as semiconductor rivals like Broadcom have seen big valuation increases driven by excitement around artificial intelligence.
Celestial is a startup focused on developing optical interconnect hardware, which it calls a “photonic fabric,” to connect high-performance computers. Celestial was reportedly valued at $2.5 billion in March in a funding round, and Intel CEO Lip-Bu Tan joined the startup’s board in January.
Optical connections are becoming increasingly important because the most advanced AI systems need those parts tie together dozens or hundreds of chips so they can work as one to train and run the biggest large-language models.
Currently, many AI chip connections are done using copper wires, but newer systems are increasingly using optical connections because they can transfer more data faster and enable physically longer cables. Optical connections also cost more.
“This builds on our technology leadership, broadens our addressable market in scale-up connectivity, and accelerates our roadmap to deliver the industry’s most complete connectivity platform for AI and cloud customers,” Marvell CEO Matt Murphy said in a statement.
Marvell said that the first application of Celestial technology would be to connect a system based on “large XPUs,” which are custom AI chips usually made by the companies investing billions in AI infrastructure.
On Tuesday, the company said that it could even integrate Celestial’s optical technology into custom chips, and based on customer traction, the startup’s technology would soon be integrated into custom AI chips and related parts called switches.
Amazon Web Services Vice President Dave Brown said in a statement that Marvell’s acquisition of Celestial will “help further accelerate optical scale-up innovation for next-generation AI deployments.”
The maximum payout for the deal will be triggered if Celestial can record $2 billion in cumulative revenue by the end of fiscal 2029. The deal is expected to close early next year.
In its third-quarter earnings on Tuesday, Marvell earnings of 76 cents per share on $2.08 billion in sales, versus LSEG expectations of 73 cents on $2.07 billion in sales. Marvell said that it expects fourth-quarter revenue to be $2.2 billion, slightly higher than LSEG’s forecast of $2.18 billion.
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