In an interview with Game File yesterday, Xbox boss Phil Spencer delved into various aspects of the company's trajectory, including the recent mass layoffs in parent company Microsoft's gaming division and Xbox's stance on physical games.
Xbox Boss Phil Spencer Speaks About Physical Games and Mass Layoffs
Xbox Not Eliminating Physical Media
Expressing optimism about Xbox's current standing, Spencer remarked, "It sounds cheesy, but I've never been more bullish about where we are." This statement came ahead of the company's decision to expand its reach by bringing a few Xbox-exclusive titles to rival consoles and teasing its next-generation console.
With the company's "Xbox Everywhere" initiative, games such as Hi-Fi Rush, Pentiment, Sea of Thieves, Grounded were reportedly launching to rival consoles. Likewise, it was reported that Spencer informed employees that Xbox has no plans to stop making consoles during an internal town hall in the middle of February. "Xbox is our gaming platform and content business. It’s the number one consumer business that Microsoft has," Spencer previously stated.
Addressing the physical games in Xbox's strategy, Spencer clarified that while the company does not view doing away with physical media as a strategic goal, Xbox's support for disc games is contingent on customer demand. "We are supportive of physical media, but we don't have a need to drive that disproportionate to customer demand," Spencer told Game File.
He further explained, "We ship games physically and digitally, and we’re really just following what the customers are doing. And I think our job in running Xbox is to deliver on the things that a majority of the customers want. And right now, a majority of our customers are buying games digitally."
The Xbox boss pointed out that gaming consoles have become "the last consumer electronic device that has a drive." He said, "And this is a real issue, just in terms of the number of manufacturers that are actually building drives and the cost associated with those."
However, he affirmed that Xbox's strategy does not hinge on going all-digital. "Getting rid of physical, that's not a strategic thing for us," Spencer stated.
Layoffs Were Necessary for Growth and Profitability
Regarding recent job cuts within Microsoft's gaming division, Spencer framed the decision as necessary for sustaining the Xbox division's growth and profitability. "I have a commitment to the company on the Xbox business being a profitable and growing part of Microsoft," he explained.
Spencer cited a comprehensive evaluation of the company's portfolio and the need for alignment within the corporation, including Activision, ZeniMax, and Xbox. He added, "I need to make sure we have enough of the right people and the right number of people in the right places for us to succeed."
Microsoft let go of 1,900 employees following its acquisition of Activision-Blizzard, which has been the subject of dispute among the Federal Trade Commission (FTC).
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Microsoft's Phil Spencer on Xbox growth, recent job cuts and the future of games on discs
