A leaked 2020 email from Microsoft Gaming CEO Phil Spencer reveals his sustained interest in buying either Nintendo or Steam developer Valve. The Northern District Court of California released the email—along with many other documents from the Federal Trade Commission v. Microsoft lawsuit that, earlier this year, unsuccessfully attempted to block Microsoft’s proposed merge with Call of Duty publisher Activision.

Microsoft first made a pass at acquiring Nintendo back in 1999, when it gave the Zelda developer an offer that caused its execs to “[laugh] their asses off” for at least an hour, Bloomberg reported in 2021. Microsoft has also been rumored to want to nab Valve in the past; though, in 2018, Valve co-founder and former ‘80s Microsoft employee Gabe Newell supposedly told a fan it wasn’t selling.

In the 2020 email, Spencer tells Microsoft’s chief marketing officer Chris Capossela and executive vice president Takeshi Numoto that “Nintendo is THE prime asset for us in Gaming.”

“I’ve had numerous conversations with the [Leadership Team] of Nintendo about tighter collaboration and feel like if any US company would have a chance with Nintendo we are probably in the best position. […] Nintendo is sitting on a big pile of cash.”

The rest of the email thread between the three executives discuss Microsoft’s ultimately snubbed attempt to buy social media platform TikTok (or “Tic Tok,” as Numoto writes) in 2020 and other, potentially lucrative buys, including Warner Bros. Interactive and Elder Scrolls developer ZeniMax, which Microsoft absorbed in 2021. Despite this, Spencer acquiesces that he doesn’t see “an angle to a near term mutually agreeable merger of Nintendo and MS.”

“I don’t think a hostile action would be a good move,” he continues, “so we are playing the long game. But our [Board of Directors] has seen the full writeup on Nintendo (and Valve) and they are fully supportive on either if opportunity arises as am I.”

“At some point, getting Nintendo would be a career moment,” Spencer says. “It’s just taking a long time for Nintendo to see that their future exists off of their own hardware. A long time…. :-)”

In 2022, to sweeten its controversial, planned Activision merger, and possibly to improve relations with Spencer’s apparent crown jewels, Microsoft made a 10-year promise to release Call of Duty on Nintendo consoles, and it sweared to keep releasing the shooter on Steam. Kotaku reached out to Microsoft for comment.

Microsoft is currently facing an unprecedented leak of confidential plans and conversations around both the recent past and coming future of Xbox. Sensitive documents meant only for the eyes of the court involved in the Federal Trade Commission’s failed battle to stop Microsoft’s acquisition of Activision Blizzard were accidentally uploaded to public servers, revealing plans for Xbox Series X/S console refreshes in 2024, a remaster of the beloved open-world RPG Fallout 3, and more. Who’s to blame? Microsoft, apparently.

The last batch of redacted exhibits in the historic legal battle were finally made public on the Northern District Court of California’s servers on September 14. News began spilling out earlier this week about Activision Blizzard CEO Bobby Kotick’s take on Switch 2 hardware specs as well as Microosft’s plans to release its 10th generation console in 2028. On September 19, however, a ResetEra user discovered that one of the PDF files actually contained hidden, unredacted exhibits exposing confidential email exchanges, PowerPoint presentations, and meeting notes.

These leaked materials offer the most candid inside look yet at what’s been going on behind closed doors at Xbox from 2019 to 2022. The leaked documents detail cost estimates for getting games like Star Wars Jedi: Survivor and Assassin’s Creed Mirage onto Game Pass, plans for new controllers, hardware, and operating systems, as well as Microsoft Gaming CEO Phil Spencer’s thoughts on trying to acquire Warner Bros. Games, Valve, and even Nintendo. All together, these leaks constitute a massive breach in an industry that often operates at heightened and sometimes ridiculous levels of secrecy.

Some Xbox fans, who are loyal to and defensive of the brand in ways often reserved for hometown sports teams, immediately started to blame the FTC. There was speculation that the regulatory agency, or some rogue member within its ranks, uploaded the wrong version of the files as payback for losing its anti-trust case against the tech giant. The agency, however, was quick to dismiss those rumors.

“The FTC was not responsible for uploading Microsoft’s plans for its games and consoles to the court website,” tweeted Douglas Farrar, director of its Office of Public Affairs. He later shared a new court order released by the judge in the case, Jacqueline Scott Corley. It called for both the FTC and Microsoft to meet again to go over the issues with exhibits, and placed the blame squarely on the latter for the latest leak.

“The Court ordered the parties to meet and confer and provide the Court with a secure cloud link to the admitted exhibits with the redactions set forth in the Court’s orders,” she wrote. “Microsoft provided the link on September 14 and the Court uploaded the exhibits to [the] internet page established for this case.”

Following today’s leak, the court nuked every remaining document pertaining to the FTC case from its server, something it did previously after an earlier batch of documents was uploaded with missing redactions. It’s unclear when the exhibits will return in their correctly redacted forms, but for everyone who follows the video game industry closely it won’t matter, as copies of the documents are already circulating far and wide.

Microsoft has yet to publicly acknowledge the historic breach, or comment on its contents. Spencer and other members of the Xbox team are headed to Japan this week for the 2023 Tokyo Game Show, where it will livestream a showcase on September 21.

Update 09/19/2023 4:45 p.m. ET: Spencer tweeted about the leaks late in the day, writing that it is “hard to see our team’s work shared in this way because so much has changed and there’s so much to be excited about right now, and in the future.”

He said Xbox will share its “real plans” when it’s ready.

Microsoft’s Bing Image Creator creator has been around since March, using “AI” technology to generate images based on whatever the user types. You never know where this sort of thing might lead, though, and in recent weeks users have been using the tool to create images of Kirby and other popular characters flying planes into skyscrapers. Microsoft doesn’t want you digitally recreating the September 11 attacks, but because AI tools are impossible to control, it seems unlikely it can stop users who really want to see SpongeBob committing acts of simulated terrorism.

Over the last two years or so, AI-generated images—sometimes referred to “AI art,” which it isn’t, as only humans make art—have become more and more popular. You’ve likely seen AI-generated text and images popping up more and more across the web. And while some try to fight the onslaught, companies like Microsoft and Google are doing the opposite, pouring time and money into the technology in a race to capitalize on the craze and please their investors. One example is Microsoft’s Bing AI Image Creator. And as with all the other AI tools out there, its creators can’t really control what people make with it.

As reported by 404 Media, people have figured out ways to use the Bing AI image generator to create images of famous characters, like Nintendo’s own Kirby, recreating the terrorist attacks that happened on September 11, 2001. This is happening even though Microsoft’s AI image generator has a long list of banned words and phrases, including “9/11,” “Twin Towers,” and “terrorism.” The problem is that AI tools and their filters are usually easy to evade or work around.

In this case, all you have to do to get Kirby the terrorist is input something like “Kirby sitting in the cockpit of a plane, flying toward two tall skyscrapers in New York City.” Then Microsoft’s AI tool will (assuming the servers aren’t overloaded, or Microsoft doesn’t block this specific prompt in the future) create an image of Nintendo’s popular character Kirby flying a plane toward what appears to be the twin towers of the World Trade Center.

A Microsoft spokesperson commented to Kotaku:

We have large teams working on the development of tools, techniques and safety systems that are aligned with our responsible AI principles. As with any new technology, some are trying to use it in ways that was not intended, which is why we are implementing a range of guardrails and filters to make Bing Image Creator a positive and helpful experience for users. We will continue to improve our systems to help prevent the creation of harmful content and will remain focused on creating a safer environment for customers.

Kotaku reached out to Nintendo for comment about the AI-generated images.

To be clear, the AI-generated images Bing users are obtaining from Bing using these kinds of filter workarounds aren’t actually 9/11 related, it’s just Kirby in a plane flying toward generic AI-hallucinated skyscrapers. But unlike AI, humans can understand the context of these images and fill in the blanks, so to speak. The shitposting vibes come through loud and clear to real people even as the “AI” is oblivious.

Uncontrollable AI is the next moderation nightmare

And that’s the problem: AI tools don’t think. They don’t understand what is being made, why it’s being made, who is making it, and for what reasons. And it will never be able to do that, no matter how much of the internet the technology scrapes or how much actual human-made artwork it steals. So humans will always be able to figure out ways to generate results that the people running these AI tools don’t want created. I can’t imagine Microsoft is happy about this. I can’t imagine Nintendo is, either.

This isn’t some random fan making shitty images of Mario in Photoshop for a few laughs on Reddit. This is Microsoft, one of the largest companies in the world, effectively giving anyone the tools to quickly create art featuring Mickey Mouse, Kirby, and other highly protected intellectual property icons committing acts of crime or terrorism.

And while we’re still in the early days of AI-generated content, I expect lawyers at many big corporations are gearing up for court fights over what’s happening now with their brands and IPs.

None of this is new, really. For as long as technology has been giving people the ability to upload and create online content, moderation has been needed. And if history is any indicator, we will continue to see AI-generated facsimiles of Mario and Kirby doing terrible things for a long time to come, as humans are very good at outsmarting or circumventing AI tools, filters, and rules.

Update 10/04/2023 4:05 p.m. ET: Added comment from Microsoft.

.

Sure, Microsoft Flight Simulator is a robust and impressively realistic video game dedicated to recreating the feel of flying an airplane around the world. But what if you flew by some sick-looking hills or ramps and wanted to hit them in a dune buggy? Well, now a new DLC from a third-party developer can help.

Launched in 2020, Microsoft Flight Simulator was the long-awaited return for the franchise after being MIA for over a decade. The new entry in the series was released in the middle of the early days of the pandemic, and provided many folks a chance to safely travel around a recreation of the planet in over a dozen planes. Since its release, paid third-party DLC has been created for the game, adding new planes and features. But not all the DLC is focused on aircraft.

Out now, Juice Goose UTV is a new Flight Sim DLC that adds a highly-detailed electric off-road Utility Task Vehicle, aka cool dune buggy. The idea is that players can explore the massive open world of Flight Simulator from the ground level via the new vehicle.

Buy Microsoft Flight Simulator: Amazon | Best Buy | GameStop

This isn’t just some quickly-made mod that tosses a car model into the game and calls it a day. According to the DLC’s official site, the buggy comes in three motor variants designed for different driving experiences. It also includes 13 liveries, optional accessories, realistic suspension, simulated friction on the tires, cruise control, lighting options, a built-in radio, and is designed to be fully drivable with a standard Xbox controller. Phew.

Even better, the Juice Goose DLC supports crossplay with airplanes, so you and your friends can get up to all kinds of fun jumping cars over planes or racing different aircraft and buggies. Optionally, players can also download a custom pack that adds a virtual playground filled with ramps and other obstacles to test out the new vehicle.

According to the devs, the Juice Goose should be available to purchase via the official Flight Sim marketplace soon on PC and Xbox. It costs $15. Players can buy it now via the studio’s official website and install it themselves, if they can’t wait for the marketplace release.

.

Microsoft appears to be cracking down on third-party peripherals for its consoles. Players are reporting getting error messages when they try to use certain off-brand controllers on Xbox Series X/S, with the accompanying text telling them them that the devices are not authorized and will no longer usable come mid-November. The major policy change is sparking a loud outcry from various gaming communities, including fighting game players who often use third-party fight sticks for high-level competitions.

The upcoming change was first reported last week over on WindowsCentral. An Xbox One user reported getting an 0x82d60002 error code when trying to use her existing off-brand Xbox controller. “A connected accessory is not authorized,” a console warning read. “Using unauthorized accessories compromises your gaming experience. For this reason, the unauthorized accessory will be blocked from use on 11/12/2023.”

A similar warning was reported by accessory maker Brook Gaming, which specializes in fighting boards and steering wheel adapters. “Recently, we have received player feedback concerning these products when used on Xbox consoles (the latest OS version 10.0.25398.2266 released on 10/16) during online gameplay,” the company tweeted on October 20. “We deeply regret any inconvenience this may cause you.”

As many players have pointed out, this new policy could be one way that Microsoft is attempting to crack down on manufacturers of XIM and Cronus Zen adapters which help players modify their controller inputs to cheat in popular online shooters like Call of Duty: Warzone 2 and Rainbow Six Siege. At the same time, the blanket ban will also mean that lots of cheaper off-brand controllers and custom gaming accessories will no longer work on Xbox.

“Heyo [Phil Spencer, Xbox, Matt Booty] This is essentially a death sentence for local fighting game events that run on Xbox, much less, others that can only afford one arcade stick,” fighting game content creator and expert Maximilian Dood tweeted on October 29 as the news spread. “The Brookgamingfans converters are not cheat devices. They’re a huge boon to the FGC. Please reconsider!”

The biggest question about the new restrictions is whether peripheral makers will be able to apply to become authorized suppliers, or if the ban will remain in place for anyone who doesn’t have a branded deal with Xbox. That would mean companies paying Microsoft for authorization, potentially increasing the costs of the devices themselves or forcing some manufacturers to stop making devices for Xbox entirely.

This is the situation that’s already in place on PlayStation and it’s a huge drag. The PS5 only supports officially licensed controllers and accessories, of which there are very few. Most are also quite pricey. The result has been a near-total lockdown that gives players few alternatives to Sony’s DualSense. Microsoft now seems to be heading in the same unfortuante direction.

Update 10/30/2023 12:04 p.m. ET: A spokesperson for Microsoft confirmed the ban will soon go into effect and said it’s for “performance, security, and safety.” “Microsoft and other licensed Xbox hardware partners’ accessories are designed and manufactured with quality standards for performance, security, and safety,” they wrote in a statement. “Unauthorized accessories can compromise the gaming experience on Xbox consoles (Xbox One, Xbox Series X/S.) Players may receive a pop-up warning that their accessory is unauthorized. Eventually, the unauthorized accessory will be blocked from use to preserve the console gaming experience.”

The full list of of supported devices going forward is available on Microsoft’s website.

Update 11/03/2023 6:20 p.m. ET: The Verge reports that Xbox chief Phil Spencer has reversed the decision to end free Game Pass Ultimate access for non-Xbox Microsoft employees. In an internal memo, Spencer wrote:

After looking into this more with the team, I just want to confirm that no change will be made to Game Pass availability in 2024. If you have access to the Game Pass offer today you will continue to have access. I appreciate the time to get up to speed and sorry for the questions and confusion created. And thanks for supporting Xbox.

Original story follows.

Working at Microsoft grants you some nice perks. One of those perks, free Xbox Game Pass Ultimate subscriptions, is going away next year, and staff at the large tech company are reportedly not happy about it. Employees were so upset that Xbox boss Phil Spencer had to step in and address the situation.

Xbox Game Pass Ultimate is a damn good deal, offering players a large library of new and old video games that can be played across PC, Xbox, and cloud streaming. The service has millions of subscribers thanks to big games like Starfield landing on Game Pass on day one. And with Activision games likely heading to the Netflix-like service in the future—following Microsoft’s acquisition of the Call of Duty publisher—Game Pass is going to become an even better deal. Of course, if you don’t have to pay at all for Game Pass it’s a really, really good deal. But it seems that the nice Microsoft staff perk is going away soon.

A November 2 report from The Verge claims that Microsoft is removing the free Xbox Game Pass Ultimate benefit for most of its 200,000+ permanent employees. The perk will go away in January 2024. Reportedly, Microsoft staff will be able to buy discounted 12-month Game Pass plans from the company’s employee store. But that isn’t good enough for the tech company’s frustrated employees, who learned about this change earlier this week.

Sources tell The Verge that most Xbox-division employees will continue to get free Game Pass. This benefit is only being removed for non-Xbox employees at Microsoft.

Reportedly, some Microsoft employees began complaining on the company’s internal message forum. The posts eventually prompted Xbox’s head honcho Phil Spencer to respond, telling upset employees that he wasn’t aware of the change and would further look into the benefit going away.

This benefit being removed in 2024 probably stings even more considering that in July the price of Game Pass Ultimate jumped from $15 a month to $17 a month. Hopefully affected employees will continue to get some other cool benefits, like, I don’t know…free Office365 subs or fun Clippy t-shirts? New old stock Zunes?

.