Satya Nadella has never considered himself a “gamer,” but Civilization did manage to capture the attention of the Microsoft CEO for a stretch when he was younger.
He spent his time—unsurprisingly—empire building and strategically planning. “Then I somehow got all the cheat sheets,” he says. “And it became boring.”
“Civ,” as hardcore fans like Nadella and Facebook’s Mark Zuckerberg refer to it, requires careful thought, as players take on the role of world leaders vying to become the envy of all other nations, either by military might, technological supremacy, or through plain ol’ riches.
Now as Microsoft’s Xbox console business comes under attack from industry newcomers—invaders like Amazon and Google—Nadella finds his video game empire in a fight for its survival. In its latest earnings report, Microsoft said Xbox hardware revenue declined 48%, which gaming analysts attribute to the fact that its current flagship console, the Xbox One, was released nearly six years ago. In video game time, that's equal to 12 Assassin's Creeds.
And this time around, for Nadella, no cheat codes or power-ups will save the day. In the face of losing not just a video game, but video gaming, what is a talented strategist (or cheater) to do?
Ever the tactician, Nadella is changing the rules, instead. By unveiling the video-game streaming service Project Xcloud, he’s saying the console doesn’t matter as much moving forward. “I may start on a phone; I may go to a console; I may end up on a PC—but your game catalog should be available,” he says. “Your friends you play with should be there, wherever you’re playing.”
In this edited interview with Fortune, Nadella talks about partnering with Microsoft's long-time video game foil Sony, dealing with toxicity in video games, and which game is his current favorite Xbox title. (And no, it's not Civ.)