After Microsoft's recent $59 billion acquisition of Activision Blizzard, the company quickly laid off 1,900 employees in the gaming business. In an interview with Polygon, Xbox boss Phil Spencer talked about the reasons for the layoffs at Microsoft and the gaming industry as a whole, saying that in the end it's just the normal functioning of a capitalist society.
The problem, Spencer said, is a "lack of growth" in the gaming industry as a whole. "When your industry is expected to shrink next year in terms of participants and funding, and there are a lot of public companies in the industry that have to show investors their growth — if a company's stock isn't going to grow, why would anyone buy a stake ?—— the business that's under scrutiny is going to be the cost part," he said. Because if you're not going to increase revenue, then costs are bound to be challenging. ”
That is, if the company can't achieve more revenue to grow, it can choose to "grow" by reducing expenses. "Growth" is everything in the eyes of investors, who only care about whether their holdings can increase in value, otherwise the inflow of money will stop.
Microsoft is not incapable of paying its employees, according to the company's financial report, Microsoft generated $211 billion in revenue in 2023, with operating income exceeding $88 billion.
Spencer continued: "I don't have the luxury of running a profitable and growing business within Microsoft. But in terms of the industry as a whole...... Sitting in GDC, I thought of my friends in the industry who were forcibly displaced, who lost their jobs, and I didn't want this industry to be a place where people couldn't build their careers with confidence, or even survive. That's why I keep asking the question: How can the gaming industry get back to growing?"
"It's really a result of an industry that's not growing for us at Xbox or any other team. It can grow, and it will grow again. But you see now that this time it's having a real impact on people. And we should all reflect and think about this. ”
Spencer's answer may seem like a justification for Microsoft, but he is not wrong when he says that the company's "make or die" is the normal way of working in the capital market, and he is helpless as a department leader.