Xbox's Phil Spencer Talks About How Acquisitions Like Bungie Were "Real Poor Learning Experiences"

Xbox's Phil Spencer Talks About How Acquisitions Like Bungie Were "Real Poor Learning Experiences"

"Regretfully, that's a way humans learn."

If the different developers under the Xbox Game Studios banner are happy with their own company cultures and their places within Microsoft today, that's not for a lack of acquisition struggles in the past. In a new interview, Microsoft's executive VP of gaming Phil Spencer reflects on the "poor learning experiences" the company had in trying to integrate Bungie, Ensemble Studios, and others during the Microsoft Game Studios days.

At DICE 2020, Spencer sat down with Ted Price, founder and CEO of Insomniac Games, for an episode of Price's Game Maker's Notebook podcast. Price and Spencer touch on a variety of topics during the episode, but with Insomniac having just been acquired by Sony last year, the conversation naturally drifts to studio acquisitions.

Spencer tells Price he wants the studios in Xbox's stable to retain their unique cultures and stresses the importance of listening to their feedback—and when Price asks how that works in practice, Spencer says that approach was shaped by some of Microsoft's past failures:

If I go through our history in studio acquisitions, back when it was Microsoft Game Studios, we have some real poor learning experiences. Things like, you know, Bungie—which, I loved the acquisition of Bungie—but we moved them all in from Chicago to Redmond, because all the studios kind of had to be in the same place, except for a couple of them. If you even go back to FASA, we acquired FASA and we actually took the organization apart. We put all the developers in our studio developers org, and all the producers—[we] literally restructured that whole team. If you look at our evolution: Ensemble, then things like Lionhead and Rare, we kept them where they were.

Bungie split off from Microsoft just days after the release of Halo 3 in 2007. That same year, FASA released Shadowrun and was shuttered a few months later. Ensemble Studios folded two years later, and in 2016 (about 4 years after the departure of Peter Molyneux) Lionhead Studios closed. Of the studios Spencer mentions, only Rare is still part of Xbox Game Studios.

"There were learning experiences through all those," says Spencer. "So some of where we are now and how we do it is lived experience through things that haven't gone as well for us in terms of integration. Regretfully, that's a way humans learn."

Spencer goes on to emphasize the importance of letting the Xbox Game Studios teams share knowledge openly while also listening to their concerns. "Teams either overtly or covertly will tell you when things aren't going quite well, and we just have to be an organization of leaders that listens," he says.

As Microsoft has learned from its past missteps, it has also ramped up its acquisitions rate. Since 2018, Xbox Game Studios has added 7 once-independent studios to its roster, including Ninja Theory, Double Fine, and Obsidian Entertainment.

The entire conversation between Spencer and Price is well worth a listen, as the two delve into issues like accessibility and discuss their mutual hopes that large companies will become more transparent and take on shared responsibility for advancing the industry's positives and addressing its ills, like crunch and toxicity in the community.

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Mathew Olson


Mathew Olson is a writer formerly of Digg, where he blogged and reported about all things under the umbrella of internet culture (including games, of course). He lives in New York, grew up under rain clouds and the influence of numerous games studios in the Pacific Northwest, and will talk your ear off about Half-Life mods, Talking Heads or Twin Peaks if you let him.

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