April 17, 2024

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Phil Spencer blames capitalism for games industry's problems: 'I don't understand.' [the] “The luxury of not having to run a profitable, growing business.”

Phil Spencer blames capitalism for games industry's problems: 'I don't understand.' [the] “The luxury of not having to run a profitable, growing business.”

After much wrangling with regulators, Microsoft recently spent $69 billion to acquire Activision Blizzard, after which it almost immediately cut 1,900 jobs in its gaming business. Not great news for anyone, unless you own MSFT shares. In an interview with ribbed On the driving forces behind layoffs at Microsoft and across the industry, Xbox CEO Phil Spencer pointed the finger at capitalism in general.

The problem, according to Spencer, is the “lack of growth” in the video game industry as a whole. “When you have an industry that's expected to be smaller next year in terms of players and dollars, and you have a lot of publicly traded companies operating in the industry that have to show growth to their investors — why would someone own another company? Equity Share,” Spencer said. If someone does not grow? “The side of the business that is examined next is the cost side.” “Because if you can’t grow the revenue side, the cost side is going to be challenged.”