Phil Spencer: Acquisitions Are a 'Natural and Healthy Part of Our Industry' - News
by William D'Angelo , posted on 01 July 2021 / 1,650 Views
Acquisitions in the gaming industry is nothing new and has been going on for decades. In the last few years it appears to have picked up, especially with Xbox who has grown from five studios to 23 today. Xbox in 2018 acquired six studios including Playground, Obsidian, Ninja Theory, and more. In 2019 they acquired Double Fine and this year completed its $7.5 billion acquisition of publisher ZeniMax Media, which includes eight studios.
Sony Interactive Entertainment just announced it had acquired Returnal developer Housemarque and may have leaked an acquisition of the Demon’s Souls remake developer Bluepoint Games. EA recently acquired Codemasters and Embracer Group's acquisitions have been happening at a breakneck pace.
Head of Xbox Phil Spencer in an interview with IGN said that acquisitions are a "natural and healthy part of our industry," but understands why fans can be concerned with too many acquisitions.
"Sometimes I see dialogue out in the industry about, 'well, are acquisitions a good thing or a bad thing?' I saw Sony just announce 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," said Spencer.
"But one thing I'll put out there is, starting a new studio, starting any small business 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 shortsighted.
"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 realize 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 realize that value through acquisition or just massive independent success if that's the path they also start to on.
"Many of those leaders will go off and start other things over time, it's kind of the natural turnover that happens with entrepreneurs and startup businesses, and for us we're always out there looking at where could continue to build our first-party capability and looking at teams that we think would be good fits for us."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.
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To an extent, with smaller developers, yes. But if Amazon came in and bought bigger houses like EA and Ubisoft and made all their stuff exclusive, I don't think Phil would like that. Yeah, a little salty about the Zenimax deal still.
I agree with him. That's how all businesses work.
Healthy? To whom? The buyers? As a consumer, I sure don't find acquisitions healthy, because often they seem to range from restricting creativity to restricting choices.
Well to be fair, id much other buyouts than seeing companies close down. Seen alot of my old favourites disappear over the many years.
I don't know about those adjectives, but it's certainly "normal". Console manufactures have been buying off exclusives since consoles have existed and--whether we like it or not--that's probably never going to change.
Sony has done it years ago but they didn't buyout companies out in the get go!
They fcking build trust and foundation before inking a deal...
Unlike Microsoft just making it rain money without even building anything,
They just fcken pay u and your ours it's just money talking.
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