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Phil Spencer, the current CEO of Microsoft's Xbox, has gone on record saying that he believes that gaming is "somewhat resilient" to matters of recession. Though remarkably successful in its own right, Xbox's gaming endeavors too have been hit by mounting economic difficulties, and the company appears to have adjusted its expectations for the upcoming fiscal year to accommodate these concerns.
Being one of the three console gaming giants, Xbox has always been a major player in the gaming industry, even more so now that the company embraced its PC branch to a greater extent than ever before. Its yet-to-be-fully-greenlit attempt at acquiring Activision Blizzard for $68.7 billion underlines the notion that Xbox is doing well, but it's still unlikely to be fully ambivalent to recession.
Spencer recently talked about the current state of the gaming industry, reflecting on the matter of economic uncertainty in particular. "Gaming is somewhat resilient to those issues," he said, referencing problems that come up during times of recession. Just a few days back, however, Spencer did admit that price increases for Xbox Game Pass are possible at some point in the future, suggesting that the resilience that Spencer described may stem from the industry's ability to adapt to the economic context at an extremely rapid pace.
Not everyone agrees with Spencer, of course. The research director at the analytics company Ampere Analysis, Piers Harding-Rolls, told CNBC that the gaming industry is "poised to hand back a bit of [its] growth" over the course of 2022. Considering the fact that the company may increase the prices of its services to alleviate reduced revenue, it's curious to note that Xbox's potential price hike could have massive effects on the rest of the industry as a result.
Taking Spencer's comments into account, it's still worth remembering the fact that Xbox Game Pass missed its subscriber goal for the second year in a row, which somewhat coincides with the looming threat of recession, too. It's a difficult, layered issue, where Harding-Rolls and Spencer both have made some good points in the past, and it's a simple statement of fact that there's no way to tell with absolute certainty how the market might hold up over a long period of time.
It goes without saying that the Activision Blizzard acquisition will be a major factor in defining how Xbox behaves over the coming years. Spencer did admit that legislative scrutiny is fair, considering the sheer scope of the acquisition, but he remains convinced that the deal will go through before all is said and done. Having access to Activision Blizzard's IPs and production capacities would certainly bolster Xbox's output through the mounting recession, should it take place, but the specifics of how things may play out remain hazy at best.
Source: CNBC