Phil Spencer on studio closures: "I have to run a sustainable business"

Microsoft's Phil Spencer has addressed the backlash to Xbox's recent studio closures, emphasising that there were "hard decisions" that needed to be made "to run a sustainable business."

Phil Spencer was interviewed on stage during IGN Live in Los Angeles on Sunday, where he was asked about Xbox's decision last month to close four ZeniMax-owned studios, including Redfall developer Arkane Austin and Hi-Fi Rush creator Tango Gameworks.

According to a write-up on IGN, Spencer said: "The closure of any team is hard obviously on the individuals there, hard on the team. I haven't been talking publicly about this, because right now is the 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 the individuals on the team. It's not about my PR, it's not about Xbox PR. It's about those teams.

"In the end, I've said over and over, I have to run a sustainable business inside the company and 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.

"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 we can, which ensures we can continue to do shows like the one we just did."

Spencer's comments echo those of Xbox president Sarah Bond, who said in the days following the studio closures that the platform holder's committent is to "[making] sure that the business is healthy for the long term."

The remaining staff at ZeniMax's studios are now covered by Microsoft's labour neutrality agreement with US union Communication Workers of America, meaning the platform holder is legally bound to take a neutral approach to the unionisation of its staff.

The IGN account on X (formerly Twitter) also posted highlights from Spencer's interview, including his response to rumours that Xbox is working on a Steam Deck-like handheld.

"I don't want to say anything, but the future for us in hardware is pretty awesome," he said. "Today was about the games, but we will have a time to come out and talk more about platform."

When asked, if an Xbox handheld did exist, whether it would be playable without an internet connections, Spencer said: "I think the ability to play a game locally is very important."