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Phil Spencer blames capitalism for games industry woes: 'I don't get [the] luxury of not having to run a profitable growing business'

Spencer said publicly traded companies have to show constant growth or else nobody will give them money.

www.pcgamer.com

The problem, according to Spencer, is a "lack of growth" across the videogame industry as a whole. "When you have an industry that is projected to be smaller next year in terms of players and dollars, and you get a lot of publicly traded companies that are in the industry that have to show their investors growth—because why else does somebody own a share of someone’s stock if it’s not going to grow?—the side of the business that then gets scrutinized is the cost side," Spencer said. "Because if you’re not going to grow the revenue side, then the cost side becomes challenged."

If you can't grow by making more money, in other words, then you can "grow"—in terms of profits, share price, EBITDA, and all those other metrics that Wall Street types care about— by spending less. The obvious question is, why are you bringing in all these new people if you can't afford to pay them? Of course, Microsoft can afford to pay those people, it just doesn't want to, because, that's right, growth.

(My edit tools are 'greyed out' for some reason, so cant mark these are quotes, apologies)

 

[drganon]

 

[Hrk69]

Phil Spencer, CEO of yapping

 

[Thick Thighs Save Lives]

It's basically the same interview that was posted earlier this week here but with a different headline lol.

Polygon asked Spencer if the ABK layoffs were part of this wider trend, or if there was something unique about the layoffs as they pertain to the current Xbox business.

“It’s a little bit of both,” said Spencer. “But I’ll say the thing that has me most concerned for the industry is the lack of growth. And when you have an industry that is projected to be smaller next year in terms of players and dollars, and you get a lot of publicly traded companies that are in the industry that have to show their investors growth — because why else does somebody own a share of someone’s stock if it’s not going to grow? — the side of the business that then gets scrutinized is the cost side. Because if you’re not going to grow the revenue side, then the cost side becomes challenged.

“We’re a business. I’ve said over and over. I don’t get any luxury of not having to run a profitable growing business inside of Microsoft. And we are that today. But just across the industry — you mentioned it, and in sitting here at GDC, I reflect on friends of mine in the industry that have been displaced and lost their jobs and how just, I don’t want this industry to be a place where people can’t, with confidence, build a career. So that’s why I keep pivoting back to: How does this industry get back to growth? But to your question, for us as Xbox or any of the teams that are out there, it is really an outcome of an industry that’s not growing. It can grow and it will grow again. But you see this time right now and the implications have human impact. And we should all reflect on that and think about it.”

 

[phaedrus]

 

[T4keD0wN]

Pretty sure that there are multiple companies that have grown in the past few years even if the industry as a whole didnt (the industry did grow too if you consider 2020 for what it was, an anomaly)

 

[IFireflyl]

My boy Spencer out here like:

 

[solidus12]

 

[Fake]

Blame everyone.

 

[Kataploom]

Blaming capitalism from a big corporation? Well, they gotta cater to lowest common denominator of intelligence out there I guess

 

[Damigos]

No Phil, its capitalism’s fault, not lack of good exclusives, not having a plan of where xbox is going, moneyhatting every problem, promoting series S as next gen and having devs create inferior versions of games so it can run on S.
No Phil, its not that Forza Motorsport sucked, last 2 Halos sucked, Fable and Gears of War are dead, the pirate game sucks, hellblade is 5 years late etc
No Phil, its not the tv tv tv, kinect, used games policy and always online policy from last gen that lost you millions of customers
No Phil, its not the endless game pass everywhere promo that made the actual xbox useless since every game can be played on PC or via stream
No Phil, its not that Nintendo and Sony offer excellent exclusives and that is what pushes the industry forward (maybe unpopular opinion, but still).
No Phil, blade capitalism, blame Canada, blade anyone but you. Its their fault, not yours

 

[adamsapple]

Already posted like three times.

Business - Game Dev - Phil Spencer on what the hell is happening in the games industry and why exclusives have become a risky business

“The math on [making] a game has definitely changed,” said Phil Spencer, CEO of Gaming at Microsoft. Polygon spoke with Spencer during the annual Game Developers Conference, and though the conversation ranged from the possibility of a handheld console to the trouble with closed platforms, one...

www.neogaf.com

(My edit tools are 'greyed out' for some reason, so cant mark these are quotes, apologies)

 

[crackajack]

Expecting unlimited growth is just a fundamentally dumb idea. In so far I agree that capitalism sucks in its core.
But expecting growth by tapping into almost unlimited ressources fails again and again with these big corps, because they don't really aim to achieve something real, nothing other than arbitrary growth itself, which should just be a byproduct and not the actual goal.

 

[Humdinger]

I don't hear him blaming capitalism. I hear him saying he can't run an unprofitable business -- which is just, duh, of course you can't. He's just stating the obvious reality.

 

[Topher]

That is not "blaming capitalism". That's blaming stockholders and their continuous expectations of growth in profits.

 

[PatientGamer]

Why does this guy always keep talking. Just shut up for once lol. I bet Xbox would be in a far better brand position if he learned how to keep his mouth shut.

 

[Unknown?]

Expecting unlimited growth is just a fundamentally dumb idea. In so far I agree that capitalism sucks in its core.
But expecting growth by tapping into almost unlimited ressources fails again and again with these big corps, because they don't really aim to achieve something real, nothing other than arbitrary growth itself, which should just be a byproduct and not the actual goal.

Capitalism is a word used as derogatory by people who love collectivism(which always leads to poverty), a better word for it is Free Market. The free market is what has lifted people out of serfdom.

The ironic thing is Microsoft being so large today has nothing to do with capitalism, it was chosen as a winner by the government and received special funding that helped it out compete other companies of the time. This is more accurately called corporatism.

 

[GrayChild]

I really want to see an interview with Phil where he's drunk and stoned out of his mind. The revelations would be glorious.

 

[CLW]

Yeah Sony and Nintendo are charities after all no profit there whatsoever

 

[Unknown?]

I really want to see an interview with Phil where he's drunk and stoned out of his mind. The revelations would be glorious.

*slurs* I mmmm *hiccup* uh gre... good Sony agent. Shhhhhh *burp*

 

[WoJ]

Phil, maybe you suck at your job and banking on gamepass was a bad idea. But I bet "you're listening and you hear us."

Eat shit Phil.

 

[squarealex]

How you can blame capitalism when you work on the most value corporation of the world?

 

[Maiden Voyage]

Your teams need to make better games, one that people want to play and buy. Stop buying new studios and turning them to garbage. Fix what you have internally first.

 

[Bernardougf]

Your boy trowing some truth bombs HeisenbergFX4

 

[nosoynadie22]

 

[Bernardougf]

Blaming capitalism from a big corporation? Well, they gotta cater to lowest common denominator of intelligence out there I guess

Its the morden westerm executive problem ... having to deal with making money in a place were everybody wants to do political/social activism.... in the past activism came from ONGs and donations.

Now the same company who wants to sell your male white/straight ass games also wants to tell the word how fucking shit you are.... its quite funny ... LucasFilm should be the prime example on how to completely fuck up your business with social inclusive feminist practices

And these people dosent have a clue.. they go down with their ship looking at the whole thenselfs made and blaming everybody

 

[londontko]

I don't hear him blaming capitalism. I hear him saying he can't run an unprofitable business -- which is just, duh, of course you can't. He's just stating the obvious reality.

He's not saying anything remotely controversial, people on here just like to REEEEEEEEEEEE

 

[Shake Your Rump]

How you can blame capitalism when you work on the most value corporation of the world?

Because it does not matter what your value is today. It's what your value will be tomorrow. That is absolutely all that matters in modern capitalism. Growth, not value.

 

[Xdrive05]

"I'm only LOSING the game because the GAME ITSELF is the PROBLEM MAAAAANNNNNNnnnnn"

 

[Skifi28]

Why does this guy always keep talking. Just shut up for once lol.

He did shut up once, the one time in his corporate life he actually had to come out and speak. What a week that was.

 

[Cyberpunkd]

Pretty sure that there are multiple companies that have grown in the past few years even if the industry as a whole didnt (the industry did grow too if you consider 2020 for what it was, an anomaly)

This. If you are only growing when the industry is you are a bad manager. Spencer should do less interviews and work more on solving Xbox problems.

 

[Boralf]

Go work for Valve then.

 

[IAmRei]

"Corporate" blaming capitalist is kinda weird to me well, stop blaming everything else, its not too late to redo or fix it...

Could be too late...

 

[FunkMiller]

Capitalism 101:

Make good products with a USP, people buy, you profit.

You dumb fucking bitch, Phil.

 

[LordCBH]

You know, Phil, your direct competitors don’t have the problems you do and they exist in the exact same market. Maybe stop blaming everything else and start taking responsibility for being shit at your job?

Like PlayStation has had an absolutely anemic first party output the past few years and they STILL shat on Phil’s Xbox constantly.

 

[Sushi_Combo]

Appreciate the insight Phillip, this was so helpful and my whole worldview has been flipped upside down.

Greatest CEO ever.

 

[winjer]

2024 has to be the lowest point ever for Xbox as a brand.
And Phill just keeps digging the hole.

 

[ChorizoPicozo]

jez corden said the same thing

jez corden = phil spencer conformed

 

[DeltaPolarBear]

He's not saying anything remotely controversial, people on here just like to REEEEEEEEEEEE

If he had to make a profit from the start, Xbox would survive 6 months tops. Xbox had been unprofitable since forever, and they should have left and let someone else have a shot. To complain about needing to make a profit NOW, after so many years of grace and paycheck for doing nothing productive, is just embarrassing to watch.

Sony and Nintendo need to make profits too, you know. Don't act like Xbox is the victim of circumstance.

 

[Matsuchezz]

He did shut up once, the one time in his corporate life he actually had to come out and speak. What a week that was.

Hehehe

, We had grown men crying and singing sad songs, songs of despair. He did shut up for once.

 

[ProtoByte]

This guy is a fucking idiot. Holy shit. What an inane comment. Gaming has always been a business. It wouldn't exist otherwise. He works for one of the most crony capitalistic companies of human history. One that has more power than some countries.

The fact that he's managed to cling to leadership at Xbox for more than 10 years is an indictment on the meritocracy. Fuck.

 

[Badlucktroll]

 

[Sephimoth]

Sounds like something a communist would say.

Just make good games.

 

[ChorizoPicozo]

why Xbox people (fans and executives) don't understand that Xbox is a complete faliure, as a brand, console and ecosystem.

The excuses making is so damn pathetic.

 

[SJRB]

 

[ChorizoPicozo]

How you can blame capitalism when you work on the most value corporation of the world?

yep. is not like they spent 100B in order to "compete".

This feels like naive Phill was just bamboozled by nadella

 

[LordCBH]

why Xbox people (fans and executives) don't understand that Xbox is a complete faliure, as a brand, console and ecosystem.

The excuses making is so damn pathetic.

Oh god Twitter yesterday was so full of delusion. It’s like they all move in unison.

 

[mejin]

Xbox business is not profitable? I'm surprised lol

Microsoft spent billions and they finally understood It's time to get some money hence multiplatform is the solution.

Spencer is directly attacking MS with his horseshit. What an audacious puppet.

 

[SHA]

It's a wonderful idea to write comments and see it in the headlines the very next day, Jesus! is Phil's job that insecure and stressful?

 

[Sentenza]

It's basically the same interview that was posted earlier this week here but with a different headline lol.

Game journalism 101: release a three-minutes interview on video? Be ready for seven different headlines, each one highlighting a different sentence in the same period.
I've seen this pattern at work for years.
Another recent example was Larian's CEO barely few days ago.