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Microsoft Gaming CEO Phil Spencer talks about recent layoffs and rumors of a handheld Xbox

Phil Spencer

Sunday's 2024 Xbox Games Showcase was certainly one of the best shows Microsoft has held in years, with lots of great-looking game reveals and trailers.

However, looming over the showcase was the fact that the Microsoft Gaming division held two mass layoffs so far in 2024. One was in early January, which caused 1,900 team members to lose their jobs. The other happened in early May, with an unknown number of jobs lost, but also caused the shutdown of three game studios, including Tango Gameworks, which released one of the most acclaimed first-party Microsoft games in some time, Hi-Fi Rush.

As part of IGN Live, Microsoft Gaming CEO Phil Spencer was finally interviewed for the first time since the May layoffs and studio shutdowns. When asked specifically about the reasons behind closing Tango Gameworks, Spencer gave a fairly generic answer. He stated:

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 that we can.

Spencer also stated that while there's a lot of interest in Xbox Games Pass, where you can play hundreds of games for a low monthly fee, he also said Sunday that that pure game sales on Xbox consoles are "up double digits every year over the last five years."

There were rumors about Microsoft hinting at a new Xbox handheld device during the showcase event. While that didn't happen, Spencer did state during the IGN Live Interview, "So we should have a handheld. I think we should have a handheld, too." He added:

The future for us in hardware is pretty awesome and the work that the team is doing around different form factors, different ways to play, I'm incredibly excited about. Today was about the games. We showed some of our Gen 9 console Series S; Series X, the work that we're doing but we will have a time to come out and talk more about platform and we can't wait to bring it to you.

When pressed about what a hypothetical handheld Xbox would be like in terms of a stand-alone device like a Steam Deck or an Asus ROG Ally or if it would need a Wi-Fi connection to stream games like the PlayStation Portal, Spencer stated, "I think being able to play games locally is really important."

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