After a tussle with regulators, Microsoft recently spent $69 billion to buy Activision Blizzard, which is not good news for anyone unless you own MSFT stock. In an interview with Polygon about the driving force behind the layoffs at Microsoft and the industry as a whole, Xbox boss Phil Spencer pointed the finger at ...... No, really, it was directed at capitalism in general.

According to Spencer, the problem is the "lack of growth" in the video game industry as a whole. He said, "With the industry projected to see a decline in both players and dollars next year, many publicly traded companies have to show growth to their investors. Because if you're not going to grow the revenue side, then the cost side is going to come into question."

In other words, if they can't grow by increasing revenue, they can "grow" by reducing spending, in terms of profits, stock price, EBITDA, and all the other metrics Wall Street cares about. Of course, Microsoft can afford to pay salaries for such people.

(By the way, Microsoft's fiscal year 2023 revenue is $291 billion and operating income is over $88 billion.)

"I don't have the [luxury] of not having to run a profitable growth business within Microsoft," Spencer said. 'But the industry as a whole ...... As I sit here at GDC, I reflect on my friends in the industry who have been displaced and lost their jobs, and I don't want this industry to be a place where people can't build a career with confidence. So I always ask: How can this industry get back to growth?

"For us at Xbox and any team out there, that is the result of an industry that is not growing. It can and will grow again. But you are witnessing this time now and the human impact of that. And we should all reflect on that and think about it."

There is a clear "don't hate the players" aspect to all of this, but he is not wrong - rather, Spencer is very forthright. This is what capitalism is: capitalism capitalizes, and when the shark stops swimming, it dies. Capitalism capitalizes, and when that shark stops swimming, the shark dies. In terms of sustainability, a constant growth formula is certainly not superior and can sometimes lead to catastrophe. And until that changes, it is unlikely that anything else will change.

If such an extraordinary outcome can be avoided (or at least staved off for a while), the relentless drive for growth may finally push Microsoft into an unexpected and potentially interesting place. same with Polygon In the interview, Spencer said that the old model of subsidizing the cost of console hardware in order to sell games and make money is not really viable anymore, bringing other digital storefronts like the Epic Games Store and Itch.io to the Xbox, He said they are looking at other ways to feed the machine.