Phil Spencer, current CEO of Microsoft’s Xbox, has gone on record saying that he believes the gaming industry is “somewhat resilient” to the economic downturn. Despite its exceptional success, Xbox’s gaming endeavors have also been hit by mounting economic hardships, and the company appears to have adjusted its expectations for the upcoming fiscal year to accommodate those concerns.
As one of the three giants of console gaming, Xbox has always been a big player in the gaming industry, especially now that the company has embraced its PC division more than ever before. Its pending $68.7 billion bid to acquire Activision Blizzard underscores that Xbox is doing well, but it’s still unlikely the company will fully accept a recession.
Spencer recently spoke about the current state of the gaming industry, reflecting in particular on economic uncertainty.
“The gaming industry is somewhat resilient to these issues,” he said, referring to the challenges that come with a recession. However, just a few days ago, Spencer acknowledged that Xbox Game Pass prices could increase in the future, suggesting that the resilience Spencer spoke of could be due to the industry’s ability to adapt to economic conditions at an extremely fast pace.
Keeping in mind Spencer’s comments, let’s not forget that Xbox Game Pass has missed its subscriber target for the second year in a row, which also coincides somewhat with the looming threat. It’s a complex, multifaceted issue that both Harding-Rolls and Spencer have made some good points in the past, and it’s a simple statement of fact that there’s no way to say with absolute certainty how the market can hold up over a long period of time.
It goes without saying that the acquisition of Activision Blizzard will be a major determinant of Xbox’s behavior in the coming years. Spencer acknowledged that legislative oversight is fair given the scale of the acquisition, but he remains convinced the deal will go through before all is said and done. Gaining access to Activision Blizzard’s IP and manufacturing facilities would certainly boost Xbox’s performance during a growing recession if it does, but the specific details of how that could happen remain nebulous at best.