Microsoft Gaming CEO Phil Spencer Talks About Industry Layoffs, Epic Games Store on Xbox, Exclusive Games and More

Microsoft Gaming CEO Phil Spencer recently talked in length about the state of the gaming industry, the layoffs happening around, game exclusivity, and having Epic Games Store on Xbox. Here’s all you need to know from Spencer's latest interview.

Phil Spencer spoke to Polygon where he discussed how the video games industry has been impacted by the layoffs, which he attributed to the “lack of growth” for the industry. It is key to note that Xbox and Activision Blizzard laid off 1,900 employees across various departments and studios recently. Across the industry, over 15,000 people have lost their jobs in the past 18 months.

Spencer said in the interview, that he is “most concerned” about the “lack of growth” and added that the projections point towards the industry getting “smaller next year in terms of players and dollars.” He explained that publically traded companies have to show investors that there is growth, and when there is no substantial growth, the business’ cost gets scrutinised, and the short-term “solution” for companies in this situation is lay-offs.

Xbox boss also added that the company is not immune to these industry trends as he said that he gets no “luxury of not having to run a profitable growing business inside of Microsoft.”

Problems with big-budget games, exclusivity, and console growth

During the interview, Spencer also explained the problems that exclusivity creates, and how the spending to create games impedes creativity as risks grow larger. He said that the costs to create a video game can be as high as “$300 million” in today’s time.

Spencer elaborated that the cost brings forth three problems including the risks that a publisher is willing to take due to the budget involved. The second problem is for exclusivity as the game would then only reach a limited number of potential gamers on the platform, and there is more pressure on the exclusive titles to justify the costs.

Thirdly, Spencer believes that the console market has not grown since 2023 and that the console player pool size remains largely the same. As per Spencer, Xbox, PlayStation, and Nintendo are selling their consoles but mostly to existing console players. This means that there is a fight over "the same-size pie" as the console makers are mostly trying to “draw in customers from other publishers and other platforms”, adds Spencer.

Epic Games Store on Xbox

Xbox head Phil Spencer was also asked during the interview if there is a future where stores such as Itch.io and Epic Games Store will arrive on Xbox. Spencer replied with confirmation saying, “Yes, “[Consider] our history as the Windows company. Nobody would blink twice if I said, ‘Hey, when you’re using a PC, you get to decide the type of experience you have [by picking where to buy games]. There’s real value in that.”