Phil Spencer Says Activision Layoffs Were Due To Lack Of Growth And Need For Profits

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Phil Spencer Says Activision Layoffs Were Due To Lack Of Growth And Need For Profits

Xbox head Phil Spencer says that the layoffs at Activision Blizzard were done due to both the state of the gaming industry as well as the need for Xbox to be profitable.

In an interview with

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, Spencer talked about the “lack of growth” within the gaming industry as well as Xbox making sure its fans can get all the games they want, wherever they want.

“It’s a little bit of both,” Spencer told Polygon. “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.”

On top of that lack of growth Spencer sees, he mentioned Xbox being a business first. With that comes the need to answer to shareholders and executives that require the company to be profitable.

“We’re a business,” he said. “I’ve said over and over. I don’t get any luxury of not having to run a profitable growing business inside of

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. 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.”

Lastly, Spencer discussed Xbox as a brand and getting games in front of players. He reiterated past notions that it’s no longer about a single console connected to a TV for Xbox. The company’s research has shown that younger people just don’t view gaming like that due to the technology and applications — he mentioned TikTok specifically — they have access to at all times.

“So for Xbox, our brand pivot — as we attract and maintain relevance with a younger audience — is ‘Xbox is a place where I can find the great games I want to.’,” he said

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What do you think of Phil Spencer’s comments on the Activision Blizzard layoffs and the state of gaming as a whole? For more Insider Gaming, read about what 2003 game could be getting a remake for the next Nintendo console.

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