Thinking Like Microsoft

Sometimes you should just stop everything and look at some new big digital artifact to see what it tells you about the world. That’s how I feel about Microsoft Flight Simulator 2020. It has things to tell us. I’m not talking about the gameplay — I’m barely a gamer, and I keep crashing my Cessna into the tarmac at JFK. Instead, I’m talking about the world into which Flight Simulator was born.

Flight Simulator is one of the most venerable brands in software development, and this is its thirteenth major release in 38 years. Flight simulators are an interesting class of software because they’re created by nerdy people for other nerdy people, and they lack plot or theme. They tend to be “about” the computer — how well can it simulate flight? What can it do? What power does your desktop PC have these days?

Let’s look at how we got here.

Key events

1982. Microsoft releases Flight Simulator in the era of DOS. It consists of a few lines on a screen. Microsoft is an important tech company in a big industry, but nothing like today.

1984, 1988, 1989. Flight Simulators 2, 3, and 4, respectively. Planes have shadows, stripes on the runway, still pretty ridiculous-looking.

1995. Windows 95, obviously. A truly big deal at the time. 

1996. Flight Simulator for Windows 95 brings satellite imagery, storms, and so forth, and we’ve moved into 3D (we skipped a few releases). Starting to look kind of cool. Three years later, Flight Simulator 2000 comes out with lots of airports — just what everyone wanted.

2001. Xbox appears. Great network play features. It’s Xbox! It’s huge!

2003. Steam from Valve shows up and lets gamers buy games and find one another for network play. Absolutely 100% Microsoft should have owned this.

2005. Bing Maps appears as MSN Virtual Earth, and keeps going. It is roundly and regularly trounced in quality and capability by Google Maps, but never, ever gives up.

2006. Flight Simulator X. Last major release for 14 years. Comes on a DVD-ROM. The real flight simulator nerds start getting into X-Plane (which was first released in 1995).

(Between 2003 and 2015, you’ve got Vista, Windows Phone, lots of things that didn’t work out very well.)

2015. Windows 10, the version of Windows we’ll likely all retire from.

2017. Xbox Game Pass — video game subscription service.

2019. Google Stadia, which lets you play games on someone else’s hardware, with glitches.

2020. Xbox Game Pass for Windows. An entry-level PC-only marketplace for big-ticket (mostly older) games, with a highly tenous link to Xbox, that costs $1 a month and $4.99 a month afterward.

2020. Flight Simulator 2020 released for Windows 10, incorporating Bing Maps.

Thinking like Microsoft

In order to compete, organizations that deliver software need to provide a lock-in: something for their users that no one else can provide. Sometimes that’s easy and obvious, as in the case of a university with a great reputation providing an email address to alumni. Sometimes, though, it’s a lot harder to see where you’re going to make a dent.

The conventional wisdom is that the market only has room for one leader in each category, and if you’re not the leader, you should go into a corner and hide in shame. This is a very pervasive thought pattern in technology. 

But consider this: Microsoft has one of everything, and sometimes they’re a leader (Xbox) and often they’re not (Bing). They have their own operating system, office suite, social network, game console, database server, web browser, search engine, IDE, programming language(s), and so forth. And you might think that’s a kind of stubbornness on their part, a refusal to move on. But they don’t actually seem that nostalgic. They recently decided to close Mixer, their Twitch competitor, for example.

So Bing isn’t as valuable as Google Maps, but as a platform component that Microsoft can fully control and integrate, it’s worth much, much more to Microsoft than Google Maps could ever be worth. Xbox Game Pass for PC has no breadth at all compared with Steam, but it sure is a cheap way to get Flight Simulator.

So given the timeline above, and given what we know, let’s pretend to be Microsoft. How does an organization like that see the world? What do they think? In my imagination, it goes something like this:

We’ve got this brand Flight Simulator. We also own Minecraft, and wow, do people spend a lot of time there. We spent $2 billion on that and got every nerdy child under age 15 in return. I wonder if we could turn Flight Simulator into the next Minecraft. We know exactly how flight simulator programs do in the market going back 38 years. And we know how to market.

Also, it’s 2020. If we’re going to simulate, let’s simulate the whole world. We can do anything we want with Bing, for obvious reasons. Let’s…just grab the entire world and put it on a big filesystem using our own cloud services. A couple of petabytes is cheap these days. We can use machine learning to fill in any gaps. People will make fun of us for making the Leaning Tower of Pisa look like a grain silo, and the fact that trees all start growing two feet above the ground, but we’re Microsoft. People have made fun of us for decades. We’ll make a nice API that lets gamers download gigs of geo data as they fly their jets.

Let’s also make it multiplayer, but not push that too hard. But people can definitely fly with their friends, as a team. Also we’ll make it easy to add plugins and add-ons for scenery, new planes, and other modifications that let you use your iPad as a separate screen, or to fill in the spots that Bing Maps renders incorrectly (like Stonehenge).

You know what grinds my gears? Steam. It’s a big sprawling mess, and Valve ships one new rehashed Half Life game per decade, but everyone just assumes that’s the way it has to be.

Oh, Google’s Stadia, that grinds my gears too. Between Stadia and Steam, there’s a whole market that should absolutely belong to us, here, at Microsoft. If anyone is going to stream games, it’s us. Mixer didn’t work out, but dammit, people are going to play games the way we want them to be played.

I think we should wrap up a couple hundred PC games and call it, I don’t know, Xbox Game Pass for PC. Let’s start blurring those lines and get people into our gaming ecosystem.

So let’s make Flight Simulator available on that and make it cheaper to buy a full year of Xbox Game Pass for PC than one license for Flight Simulator. Now we’re getting thousands, hundreds of thousands, millions of new users to set up Xbox gaming accounts and lock them into our store experience. So we’re lifting customers away from Valve.

So that’s launch! My lord, the gaming press loves us. They love being able to simulate the whole world. You know why? Because it’s amazing. We did it!

We also launched a little early. It’s a giant, slow, 90 gigabyte download and there are lots of bugs. It takes forever to actually get on the runway. But now we can see how people use this thing. We can see where they fly their planes, receive their reports in order to QA Bing Maps, study all kinds of usage patterns. We can see what people do with multiplayer mode.

What’s beautiful here is we just brought so many people close to Xbox, we locked them into a game they could play for years, we’ve got them using Bing Maps all the time, and we know exactly what they’re doing at all times. And it’s time that they don’t spend using Netflix or Apple products. And by time, I mean hundreds of millions, eventually billions, of hours where they’re leaning in our direction.

And now what? Well, we let people play. We plan for the Xbox launch, and figure out what to do, really, with the multiplayer mode, and how to start marketing Xbox as a platform to the people who are paying us $5 a month, and once we get this thing on Xbox we’ve got 90 million users. So now, for the next decade at least, maybe 20 years, we’ve got this airplane simulator game that will be a place where people live their lives, share experiences, talk to one another, and it’s utterly dependent upon and connected to a variety of platforms we control, and it knits our PC gaming and Xbox platforms together, and we can use the data a million different ways, create special sponsorships and plane liveries — I mean, seriously, don’t you think American Airlines is going to want their livery to be the default at some point or another? Or for Boeing to pay for special treatment for their airfield? Travel and tourism is $1.6 trillion in the US alone, and this is a global platform.

All we have to do is let people play, keep them playing, and encourage them to explore more and more of the game, and we’ll generate unbelievable growth and opportunity for ourselves.

This is a good plan!

What can we learn?

I think for a lot of us in the tech industry our mental model of Microsoft is this incredibly angry, enormous dragon that savagely burns every town it passes while sitting atop a huge hoard of gold. There were years (2006–2015) where it was simply giant. In 2020, the dragon still exists, but it mostly works in Excel. In addition, Microsoft used to be famous for having every single part of the organization engaged in total war with every other part. Somehow the divisions are capable of collaboration now — their CEO, Satya Nadella, usually receives the credit for this change.

It’s interesting to contrast this with Apple. Apple seems utterly uninterested in any category they can’t completely dominate and extract 30% from. Microsoft doesn’t seem anywhere near as organized, and yet…they’re turning little imaginary planes and a legacy brand into a giant integrated platform that will turn into its own miniature economy. There are billions of dollars they’re unlocking here.

That’s one hell of a way to think, and a good reminder for anyone who laments that they’re behind, that their platform isn’t modern enough, that they can’t compete. That used to be Microsoft. But now they seem focused on building new things with all the big pieces they own. 

Case in point: You already can’t find a flight yoke. They cost hundreds of dollars on eBay. They’re sold out at the big electronics stores. Lord knows, during a pandemic, when you’ll actually be able to buy one again. The dragon is still there — it’s just learned to be invisible.

Paul Ford is the CEO and co-founder of Postlight. Talk to him about digital transformation at hello@postlight.com.