Microsoft CFO Amy Hood warned employees not to ‘build a gold toilet’
According to emails produced during federal court hearings last month over Microsoft’s planned acquisition of Activision Blizzard, Microsoft’s finance chief advised employees not to “build a gold toilet.”
According to Snopes, the quip might refer to a 2016 social-media claim (proven false) that former President Donald Trump owned a solid gold toilet. Rapper MC Hammer is said to have done the same. The reference captures the potential for richly valued technology companies to build products just because they can, regardless of the likelihood that they won’t resonate with many customers.
I still remember Amy’s words from the Fall meeting – ‘don’t build a gold toilet,'” vice president Catherine Gluckstein wrote in an email to Phil Spencer, Microsoft’s CEO for gaming. Previously known as xCloud, Gluckstein works in advertising and cloud-based gaming.
Hood’s remarks were not elaborated upon by a Microsoft spokesperson.
Microsoft plans to test xCloud with consumers immediately before Gluckstein made the toilet comment. In her comments, she noted she was unclear about Microsoft’s goals and where the feature would fit into Xbox’s go-to-market strategy.
Gluckstein wrote, “I’ve made the mistake on too many products when we built features before we answered the core questions.
In response, Spencer said mobile gamers do not necessarily want to play a hardcore game like Halo while using an Xbox controller.
The gold seat is being built (for our existing TAM),” Spencer wrote. We don’t grow from it.”
Spencer suggested Microsoft should stop what it was doing and start picking up intellectual property and releasing mobile games, or it could acquire a mobile game publisher like Nexon.
Microsoft might explore lesser forms of in-house development, Gluckstein replied.
Rather than running one perfect experiment, perhaps we should run multiple ceramic toilet experiments (smaller scope, scrappier),” Gluckstein wrote. Is this a better approach than ‘guessing.’ Are we learning the customer’s WHY fast enough? ”
Microsoft moved forward with xCloud beta testing in late 2019. But over five days of court hearings in June, Microsoft executives testified that xCloud, now known as Xbox Cloud Gaming, has failed to become a viable alternative to PCs or Microsoft’s Xbox consoles, where games can run locally. Earlier this year Google shut down Stadia, its take on game streaming.
Microsoft hasn’t given up on cloud gaming. But it’s also chosen to grow through dealmaking. Last year the company announced its intent to buy Activision Blizzard, which makes mobile hit Candy Crush Saga, for $68.7 billion. A federal judge will decide if Microsoft can close the transaction, despite objections from the Federal Trade Commission. British regulators have also tried to block it.
Read the emails from Spencer and Gluckstein regarding Hood’s “gold toilet” comments below.