Xbox Boss Phil Spencer addresses studio closures – IGN Live 2024

Xbox boss Phil Spencer has spoken out about the recent closure of a number of studios in Microsoft’s gaming sector, insisting he has to make “difficult decisions” to run a sustainable business.

Speaking to IGN’s Ryan McCaffrey on IGN Live, Spencer commented briefly on the surprise decision to shut down Redfall developer Arkane Austin and Hi-Fi Rush developer Tango Gameworks as part of sweeping layoffs affecting around 1,900 employees.

“Obviously, shutting down any team is hard on the individuals there, and it’s hard on the team,” Spencer said. “I haven’t spoken publicly about this, because now is the time for us to focus on the team and the individuals. It’s obviously a very difficult decision for them, and I want to make sure that through the terminations and other things we’re doing the right thing for the individuals in the team, it’s not about PR.” Mine, and it’s not about Xbox PR, it’s about those teams.

“Ultimately, as I’ve said time and time again, I have to run a sustainable business within the company and grow, and that means I sometimes have to make tough decisions that I honestly don’t like, but they’re decisions that someone needs to make. Go make it.

“We’re going to keep moving forward. We’re going to continue to invest in what we’re trying to do at Xbox and build the best business possible, ensuring we can continue to make shows like the one we just did.”

Microsoft announced to employees in May that it would close Redfall maker Arkane Austin and Hi-Fi Rush and The Evil Inside developer Tango Gameworks and Alpha Dog Games, while Roundhouse Studios would be absorbed by ZeniMax Online Studios. The move sent shock and outrage across the industry, especially considering one of Xbox’s most successful recent exclusives, Hi-Fi Rush, was developed by Tango, a studio acquired by Microsoft through its acquisition of parent company Zenimax in 2021.

This is the first time Spencer has commented on the studio’s closure since it was announced, and follows similar comments from other Xbox executives who were asked about the decision.

A few days after the layoffs, Xbox chief Sarah Bond was asked about them at a Bloomberg conference, where she insisted that the Xbox business remains healthy in the long term during what she called “this transformative moment.”

Microsoft announced it will lay off 1,900 employees from its video game workforce in January. This was just one of a number of devastating cutbacks the industry has been hit over the past year, with other companies including Sony, Riot and Epic laying off hundreds of employees.

For more, read our report exploring the recent rise in layoffs in the video game industry. To see everything that was announced during the Xbox Showcase, check out our report.

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