At its 2018 E3 press conference, Microsoft unveiled plans to significantly boost its in-house game development capabilities with the acquisition of Playground Games, and letters of intent to acquire Ninja Theory, Undead Labs and Compulsion Games. In addition, Microsoft is creating a new game development studio, called "The Initiative." Upon completion of these acquisitions this will nearly double the number of game development studios at Microsoft, bring them to 11.

The addition of these studios strengthens Microsoft in an area it has lagged behind Sony and Nintendo. Enhancing the number of exclusive titles it can produce, giving them ownership of some new, high quality IP, and adding many creative and talented developers to their roster.

Exclusives are an important differentiator for video game consoles. The majority of gamers don’t buy consoles for the hardware but for the games they can play on that hardware. For example, Horizon Zero Dawn, a PlayStation exclusive, has sold over 5 million copies, was developed by Guerrilla Games a Sony game development studio.
While console manufacturers can get exclusively from third party publishers it is expensive and is often for a limited time. This move boost Microsoft in an area it was clearly lagging the competition.

Microsoft’s announcement comes on the heels of Sony restructuring operations in April 2018 to focus on creating “attractive” and “powerful first party titles.”