Spencer discusses the massive layoffs in the Xbox department: due to weak industry growth

DoNews reported on March 27 that Phil Spencer, head of Microsoft’s gaming division, said that the company’s decision to lay off 1,900 people stemmed from the lack of growth in the entire gaming industry.

In January, Microsoft announced about 8% layoffs, involving three divisions: Xbox, Bethesda and Activision Blizzard, affecting a total of 22,000 employees. Microsoft completed its acquisition of Activision Blizzard in October 2023, giving it ownership of well-known games such as Call of Duty, World of Warcraft, Diablo and Overwatch.

In a recent interview with Polygon, Spencer said the industry's lack of growth is forcing publicly traded gaming companies to cut costs. Farhan Noor, a game developer who has been tracking layoffs in the game industry for a long time, estimated through data from the videogameslayoffs.com website that about 10,500 game industry employees will be laid off in 2023 alone.

Less than four months into 2024, the number of confirmed layoffs is expected to reach about 8,000.

“My biggest concern is the lack of growth in this industry,” Spencer said. “When an industry expects both player numbers and revenue to decline over the next year, public game companies need to show growth to investors because If it's not growing, who's going to hold stock in these companies? So the first thing that's scrutinized is often the cost side. Because if you're not growing revenue, costs become a challenge."

"We are a business ," he continued, "I've said this repeatedly. Within Microsoft, I had no choice but to run a profitable and growing business, and we have done that. But across the industry, you just didn't Having mentioned this, while attending the Game Developers Conference (GDC), I thought about some of my friends who have been laid off in the industry, and it made me sad. I don’t want the games industry to become a place where people can’t confidently build a career. . So I keep thinking: How can the gaming industry grow again? But in the case of Xbox or any other team, the layoffs really stem from a lack of growth in the industry. The gaming industry can grow again, and it will grow again. But we're now in The impact of such a period is real and will affect people's lives. We should all reflect on this."

According to data from research company Newzoo, the global game market will create a Revenues of approximately $184 billion were up 0.6% from 2022, which was down 5% from 2021. Newzoo expects the gaming market to generate $189.3 billion in revenue in 2024 and reach $205.7 billion in 2026.

In the interview, Spencer also cited ballooning game development costs and Gen Z consumer behavior as among the factors driving the company to bring more Xbox games to PlayStation and Nintendo consoles.

The above is the detailed content of Spencer discusses the massive layoffs in the Xbox department: due to weak industry growth. For more information, please follow other related articles on the PHP Chinese website!