On May 7th Xbox announced the closure of three studios: Arcane Austin (Redfall), Tango Gameworks (HiFi Rush) and Alpha Dog Games (Mighty downfall). The support studio Roundhouse Games was also acquired by Zenimax Online Studios (Elder Scrolls Online). The news is another example for Xbox –who spent billions Purchase of studios– Cut costs, lay people off and rearrange chairs on the good ship Xbox, which lately feels like it’s drifting aimlessly.
Now is the time to acknowledge that Xbox boss Phil Spencer makes bad decisions.
Since the Xbox One eraSpencer has been the face of Xbox since 2011. He continually says things that make his loyal Xbox fans praise him and avoids as much negative press as possible. He will highlight the benefits of emulating and preserving games, At the same time, it acknowledges that Xbox could do more (But I don’t plan to.) In November 2021as Activision subsequently found itself in hot water A Wall Street Journal report Claiming that then-CEO Bobby Kotick was allegedly aware of the toxic behavior at his company, Spencer was one of the biggest voices in the video game industry speaking out against it call of Duty Editor. “This type of behavior has no place in our industry,” Spencer claimed in an email. A Filing with the SEC
Of course, this is a fairly common behavior of a powerful and rich manager who is part of a huge global corporation. But Spencer has (mostly) managed to avoid criticism by telling stories about how he believes gaming should be for everyone, while making decisions that directly contradict that claim.
A story of entrepreneurial contradictions
In October 2020, shortly after Xbox announced its plans to acquire Bethesda, Spencer told My city: “This deal was not made to take games away from another player base,” adding that Xbox wants “more people to be able to play games, not fewer people to be able to play games.” But in March 2023 Redfall Director Harvey Smith said that after purchasing Bethesda, Microsoft stepped in and canceled a PS5 port of the vampire-hunting co-op game. Starfield only ships on Xbox and PC. And despite some Xbox games –How Grounded And Sea of Thieves– Jumpship to PlayStation and Switchfuture big titles like Indiana Jones will not be cross-platform.
The Xbox boss also talked about giving developers the freedom to make what they want to make. explained in an interview with Kind of funny: “If a team like Rare wants to do it sea of thieves, if a team like Obsidian wants to do it Grounded, and Tango wants to go Hi-Fi [Rush] when probably everyone thought they would Evil in 3. I want to give teams the creative platform to advance their skills and ambitions.”
While Spencer says wonderful things about creativity and letting his teams do what they want to do, the reality is that if those bets don’t pay off (and even if they do), teams run the risk of to be gutted or closed as Microsoft becomes one of the few companies in history worth three trillion dollars
But while Spencer was something of an industry darling for over a decade, it’s become clear over the last two years that he’s not infallible and perhaps deserves a closer look. Under his leadership Thousands of people were laid off Not long after the company spent billions of dollars on the acquisition Bethesda and Activision. The studios were closed. Games were canned. DLC was canceled. And Xbox’s first-party editions continue to be Feast and Famine 2022 The company had practically nothing. There was a lot to show in 2023. This year it’s quiet.
Sure, the release schedule will (assuming there is no delay) later with the release of Seuna’s Saga And Indiana Jones and the Great CircleBut After all the money spent building Xbox studios and teams, after all the cuts and layoffs, after all the resources poured into growing the brand, Xbox has very little to show for it poor console sales and some cool games like HiFi Rush. (Not cool enough though to prevent the studio from closing.)
Spencer has been running Xbox for a decade
Since 2014, Spencer has been the main person at the helm of Xbox. While his biggest supporters may want to blame the economy, PlayStation, or regulators, he ultimately makes decisions that don’t help his employees or players. Sure, its Game Pass creation and push to expand it have rightly been praised by many. It was a real game-changer for the industry and actually brought more games to more people. But beyond that one big win, the rest of Spencer’s run as Xbox’s top boss was a series of layoffs, delays, apologies, poor sales, and mergers that were supposed to feed Game Pass but that instead seemingly cost a lot of people their jobs .
In 2023 amid 10,000 cuts at MicrosoftSpencer wrote in an email to employees that he and gaming team executives at the company “had to make decisions that we believe will ensure the long-term success of our products and business.” This included cutting approximately 800 Xbox jobs.
Then in 2024Just a few months after closing its deal with Activision, Xbox cut 2,000 jobs. In another email to employees, Spencer said that he and other team leaders at Xbox and Activision Blizzard are “committed to developing a strategy and execution plan with a sustainable cost structure that will support our entire growing business.”
But after years of making the “best plans” for Xbox, people are losing their jobs again. Four Xbox/Bethesda studios are closing. I hope that this time Spencer and the leadership at Microsoft have found the right plan that actually leads to growth, good games and stability rather than further staff cuts and increasing profits for the company. And I hope that in the future, Xbox fans and the media will hold Spencer more accountable for future mistakes, cuts and failures.
correction: May 7, 2024, 6:05 p.m. ET: This story has been updated to clarify which studios have closed and which have been acquired.
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