Phil Spencer on shutting down studios: "I must operate a sustainable business"

Phil Spencer at IGN Live 2024

Phil Spencer of Microsoft has responded to criticisms regarding the recent shutdowns of several Xbox studios. He highlighted the necessity of making "difficult choices" to "maintain a viable business."

During an interview at IGN Live in Los Angeles, Spencer was queried about Xbox's recent shut down of four ZeniMax-owned studios, which included Arkane Austin, known for Redfall, and Tango Gameworks, the creators of Hi-Fi Rush.

As reported by IGN, Spencer remarked, "Closing any team is tough on everyone involved. I haven't discussed it publicly much because now is the time to support the teams and individuals."

"The decision significantly impacts them, and we want to ensure we're doing the right thing with severance and other measures. This isn't about my PR or Xbox PR, but about the teams."

He continued, "Ultimately, I need to manage a sustainable business within the company, which sometimes involves making tough, unappealing decisions. But such decisions are necessary."

"We will keep investing in Xbox to create the best business model possible, ensuring we can continue initiatives like our recent showcase."

Spencer's perspective aligns with Sarah Bond, the Xbox president, who, following the closures, emphasized the broader goal of maintaining a "healthy business in the long term."

Meanwhile, ZeniMax employees are now protected under Microsoft's agreement with the Communication Workers of America, ensuring that the company remains neutral regarding staff unionization.

IGN's account on X (formerly Twitter) highlighted portions of Spencer's interview, including his comments about the possibility of an Xbox handheld device similar to the Steam Deck. Spencer noted, "I won't confirm anything, but our future in hardware is promising. Today was about games, but we'll discuss platforms later."

Addressing whether such a handheld would function offline, Spencer stated, "Local gameplay is vital."

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