Microsoft Gaming CEO Phil Spencer recently spoke alongside Double Fine founder Tim Schafer at the Paley International Council Summit, where he championed the necessity of creative risk-taking within the games industry to a small, select audience of media executives.
Spencer’s focus was clearly on the creative backbone of their studios. “The creativity of the teams is, in my mind, the most important thing and the thing that we need to protect and foster,” Spencer said during the moderated discussion.
Double Fine and the ‘Walking Lighthouse’
According to Tim Schafer, whose highly acclaimed adventure game studio was acquired by Microsoft in 2019, Spencer and the company have stayed true to their promises of creative independence.
Schafer recounted the key concern he had when the acquisition was on the table: “When we talked about becoming acquired, it was a big thing for me, like, ‘How do we keep our culture intact?'” He noted the reassurance he received: “And everyone was like, ‘No, we really want you to stay who you are.’ And that’s been true all these years … You know, creatively, we can be like, ‘Hey, we want to make this game about a walking lighthouse,’ and they’re like, ‘Cool. Sounds cool.'”
The “walking lighthouse” game in question is the recently released Keeper, which performed well, even earning a 90% in our review. Schafer emphasised that the stability provided by Microsoft freed Double Fine from the continuous need to “shaking the bushes for money.” This allowed them to pivot their focus to: “What would we do if we weren’t constantly afraid?”
Schafer also touched on the value of individuals, stating he learned during his time at LucasArts to “make bets on people” rather than on mere ideas, fostering leaders who would later be trusted to run their own projects.
The Contradictory Reality
These lofty statements on protecting creative talent are set against the backdrop of many of Microsoft’s extensive layoffs across its gaming division in recent years. This comes after a significant period of expansion, which saw the acquisition of major players like Bethesda, Activision Blizzard, and others, alongside Double Fine.
Spencer did acknowledge that the company doesn’t always succeed in protecting these creatives, though he framed this in the context of online commentary.
“I think it’s the bravest thing a team can do, whether you’re making a movie or a television show, to go and put something out for the internet to evaluate, judge and comment on,” Spencer said. He added that the internet is “not always a nice place for the discourse around things that have been created,” but stressed that nurturing and protecting creative teams is “kind of the root of any media industry, the creative nugget.”
Key Contradictions
While Double Fine and Obsidian (acquired in 2018) seem to be flourishing, Obsidian alone has three notable releases this year: Avowed, Grounded 2, and The Outer Worlds 2. The bigger picture across the gaming division is more complex.
Word in the industry suggests that Microsoft’s gaming division has been pressured to meet highly demanding profit margins. This may be what has driven the company to:
- Lay off thousands of workers.
- Cancel major projects, including a Blizzard survival game and a Zenimax MMO.
- Shutting down multiple studios.
This wave of actions is at odds with the secure environment Spencer spoke of. As Diablo 4 producer Kelly Yeo stated after her team unionised in August: “With every subsequent round of mass layoffs, I’ve witnessed the dread in my coworkers grow stronger because it feels like no amount of hard work is enough to protect us.”
A stark example of this inconsistency is the closure of Tango Gameworks. Their final game under Microsoft, 2023’s Hi-Fi Rush, was a smaller, unique, and universally praised game, exactly the kind of creative risk Spencer praised. Yet, the studio was still closed. (Tango Gameworks has since been revived by South Korean publisher Krafton.)
What We Think
The difference between the rhetoric of Microsoft’s leadership and the actions taken by the wider corporation is becoming increasingly apparent. While the acquisitions of Double Fine and Obsidian appear to be working well, providing them with the financial safety to pursue unique and engaging projects, the widespread layoffs and studio closures across the rest of Microsoft Gaming send a worrying message to creative developers. The closure of Tango Gameworks, a studio that produced a smaller, successful, and genuinely innovative game, serves as a harsh reminder that profitability targets often overshadow the stated goal of nurturing creative risk-takers.
It’s clear that Microsoft is wrestling with how to balance massive acquisitions and expansion with the need for sustainable profitability. The question remains whether the company can truly foster the kind of secure, creative environment Phil Spencer describes while simultaneously executing mass layoffs and demanding “unreasonably high” profit margins. The fate of studios like Tango Gameworks will likely continue to be an emblem of Microsoft’s internal conflict on this issue.
