Studio Acquisitions Are “a Natural and Healthy Part of Our Industry” – Phil Spencer

Xbox boss Phil Spencer says that though concerns of consolidation are understandable, studio acquisitions are really a healthy part of the industry.

Posted By | On 30th, Jun. 2021

Phil-Spencer

Acquisitions of developers (and at times even publishers) have been part of the games industry for a long time, as is the case in any other industry of course, but the last few years in particular have seen a flurry of activity on that front. Sony recently confirmed the purchase of Housemarque (and may have leaked an imminent Bluepoint Games acquisition), EA has acquired Codemasters, Embracer Group’s spending spree is refusing to end, and of course, Microsoft has picked up a large number of companies as well, most notably with the $7.5 billion acquisition of Bethesda’s parent company ZeniMax.

And of course, the one question that’s brought up with regard to this quite often is- is this a good thing or a bad thing? On the one hand, developers and studios are being given greater resources, finances, and security following acquisitions. But then again, consolidation is never really good for competition, while there have been more than a few examples of acquired studios getting shut down over the years as well.

According to Xbox boss Phil Spencer, however, the concerns are unwarranted. Speaking to IGN (transcribed by VGC), Spencer said that though he understands that fans are often concerned about too many acquisitions, in his eyes, a studio getting purchased is a “healthy and natural” part of the industry, especially in cases where independent developers receive financial backing and security to ensure their continued survival, and help them thrive even more.

“Sometimes I see dialogue out in the industry about, ‘well, are acquisitions a good thing or a bad thing?’” Spencer said. “And I saw Sony just announced a couple of acquisitions —saying congrats to those teams on that— and I understand some of the sentiment from the community about whether these are a good thing or a bad thing when acquisitions happen.

“But one thing I’ll put out there is, starting a new studio, starting any small business, frankly, is a very risky proposition, starting a video game studio is even more so. And if a team actually takes the risk of starting a new company, starting a studio, building that over years, building value in that, to say that they shouldn’t sell I think is just short-sighted.

“The whole thing that kind of causes this cycle of teams creating studios is that opportunity for those people taking an immense risk at starting new teams to realise the value in what they created, and M&A or acquisitions is absolutely part of it.

“It doesn’t mean every team has to end up selling their studio but I think it a natural and healthy part of our industry that certain teams will start a studio—many of them will fail, we know most small businesses fail, whether it’s video games or anything else—but those that make it through and at such a kind of risk-filled journey for them, to get to the point to create real value, I’m always going to congratulate when teams get to the point where they realise that value through acquisition or just massive independent success if that’s the path they also start to on.”

Recently, Xbox Game Studios boss Matt Booty stated that Microsoft is going to keep acquire studios in order to ensure that it can up a steady stream of releases for Xbox Game Pass, with at least one new first party game per quarter being the target. Meanwhile, Sony has also said that it wants to keep investing in acquisitions, though there’s no telling if they’re going to cool things down on that front following the Housemarque acquisition (and the all-but-confirmed Bluepoint deal).


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