Phil Spencer Defends Xbox Studio Closures, Layoffs: "I Have To Run A Sustainable Business"

Microsoft Gaming CEO Phil Spencer has explained his point of view regarding the decision-making process behind the recent closure of several studios, including Tango Gameworks, the studio behind 2023's hit rhythm-based action game, Hi-Fi Rush.

"The closure of any team is hard obviously on the individuals, hard on the team," Spencer said during an interview with IGN following Sunday's Xbox Showcase. I haven't been talking publicly about this because right now is a time for us to focus on the team and the individuals. It's obviously a decision that's very hard on them, and I want to make sure--through severance and other things--that we're doing the right thing for individuals on the team [who have been laid off]. It's not about my PR, it's not about Xbox PR, it's about those teams."

Despite being asked specifically about the reasons behind the fate of Tango Gameworks, Spencer kept his answers vague.

"In the end--I've said over and over--I have to run a sustainable business inside the company and [help it] grow, and that means sometimes I have to make hard decisions that, frankly, are not decisions I love, but decisions that somebody needs to go make," Spencer explained. "We will continue to go forward, we will continue to invest in what we're trying to go do in Xbox, and build the best business that we can, which ensures we can continue to do shows like the one we just did."

Throughout the interview, Spencer never once mentioned Tango Gameworks (or Arkane Austin, or any of the other recently shuttered studios) by name.

"For us, as the organization gets bigger, I think it's just more important that we can take bets together and try to do innovative, creative things, and that will continue to drive us," he added.

Spencer's words echoed sentiments recently shared by Xbox president Sarah Bond, who replied to questions about the closures with a similar non-answer, saying, "We look at each studio, each game team, and we look at a whole variety of factors when we're faced with making decisions and trade-offs like that. But it all comes back to our long-term commitment to the games we create, the devices we build, the services, and ensuring we're setting ourselves up to be able to deliver on those promises."

Spencer did, however, give some specifics regarding the company's finances, stating, "We're up double digits every year over the last five years on game sales on Xbox consoles."