Microsoft Says Video Game Industry Stagnation Partly To Blame For Mass Layoffs

Since Microsoft announced plans to layoff nearly two thousand employees across its gaming division, it’s given the public plenty of reasons for doing so. As is the case with other video game companies, it all boils down to ballooning game development costs and the lack of projected growth in the video game industry, which Microsoft Gaming CEO Phil Spencer acknowledged in a recent interview with Polygon.

“I’ll say the thing that has me most concerned for the industry is the lack of growth,” he said. “[…] When you have an industry that is projected to be smaller next year in of players and dollars, and you get a lot of publicly traded companies that are in the industry that have to show their investors growth — because why else does somebody own a share of someone’s stock if it’s not going to grow? — the side of the business that then gets scrutinized is the cost side.”

“We’re a business. I’ve said over and over. I don’t get any luxury of not having to run a profitable growing business inside of Microsoft. And we are that today,” he added. “But to your question, for us as Xbox or any of the teams that are out there, it is really an outcome of an industry that’s not growing.”

The layoffs were just part of Microsoft’s efforts to assure its continued growth. It also revealed plans to Sea of Thieves, Grounded, Pertinent, and Hi-Fi Rush. By doing so, the company hopes to lure in more players and maybe even reinvigorate the stagnating console market.