- Microsoft had some of gaming’s biggest job cuts this year.
- Phil Spencer believes that layoffs were a necessary evil for Xbox to stay afloat.
- He thinks that the growth of the console industry has also stalled.
Not too long ago, Microsoft laid off around 2000 developers, and most of the impacted workers were a part of the Activision Blizzard team. While Xbox clarified that the layoffs were already planned before the acquisition, Phil Spencer has now stated that the job cuts were necessary.
Why it matters: Xbox has been trying different strategies this year to grow the console market and to be more profitable in the industry.
During a recent interview with Polygon, Phil Spencer talked about multiple things going on in the gaming industry, including the recent layoffs and the lack of growth in the console market.
Spencer was asked whether the layoffs at Activision Blizzard were a part of the wider trend or if there was something else behind the layoffs. He replied that it was a little of both, and since the console market isn’t growing, layoffs are necessary to remain profitable.
I’ll say the thing that has me most concerned for the industry is the lack of growth.
-phil spencer
He says the lack of growth isn’t great for the industry, which is projected to be smaller next year in terms of players and dollars, so you need to grow the revenue side, or the cost side will become a much more significant challenge.
Phil Spencer remains hopeful that the console industry will grow again, and for that, they have been trying different strategies to expand the business, including a potential handheld console and an early next-generation launch.
The recent plan to go multiplatform is part of the same strategy as Phil Spencer thinks exclusivity may be behind the industry’s stalled growth. Therefore, Microsoft is releasing its games on multiple platforms, which will allow it to increase profits across all devices.
It remains to be seen how the console industry will grow in the future. Hopefully, more layoffs will not follow in the coming months. No major publisher has been safe from this trend, but we would like to believe that the worst is already behind us.
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