Feb 3, 2022 - Technology

What makes Microsoft gaming chief Phil Spencer tick

Photo illustration: Shoshana Gordon/Axios. Photos: Courtesy of Microsoft, Xbox

Microsoft gaming CEO Phil Spencer’s career origin story — a chance encounter with a college classmate’s dad, who was a VP at Microsoft and offered him an internship — plays differently these days, and he knows it.

Why it matters: As head of Xbox since 2014, Spencer is already one of the most influential and powerful people in gaming, but he finds himself at a pivotal point both in his career and in the industry at large.

  • There’s an obvious reason: Microsoft’s $69 billion bid to buy the massive, but scandal-ridden Activision Blizzard
  • And there’s something subtler: the executive’s apparent efforts to recognize his privilege and to extend support to those who didn’t have his advantages.
  • Both come as he prepares to be honored for a lifetime achievement award from the Academy of Interactive Arts & Sciences later this month.

When asked by Axios to describe his biggest career achievement, he stumbles into an answer he suggests will sound cheesy: “just being part of a great team, a great community and building stuff together.”

  • But looking back, riffing that he’s never had to interview for a job, he reframes his own start: “That happens because I'm in a certain strata,” he says. Right place. Around the right people. “It's definitely not all my capability.”
  • “I get kind of upset with myself if I'm not doing everything that I can, in the position that I've been afforded, to have a positive impact on people that I look at that are more capable than me, more committed than I am. And, frankly, maybe don't look like this or haven't done the journey that I've been on."

Flashback: Spencer, 54, was raised in southern California and his first game was Pong. His father was a chemical engineer, his mother a school teacher.

  • In the early 80s, his dad brought home a Sinclair ZX81 and Spencer grew fond of typing in computer programs from magazines.
  • His family moved to Washington State where, as a teenager, he worked in video game retail, nudging customers toward his favorite co-op games such as The Goonies.

His Microsoft career didn’t start in games. He was a programmer, and then a manager, on CD-ROM encyclopedias and music software. He even worked on Microsoft Dogs.

  • An early boss, Lisa Brummel, recalled Spencer as a good team player capable of working well with other parts of the company. “We had a lot of talkers and not as many good listeners. And so he was a good listener.”
  • Spencer didn’t hide his interest in games. He ran a second set-up in his office to mine loot in Ultima Online.
  • In 2001, managers at the burgeoning Xbox team noticed him and offered him a chance to run Studio X, which partnered with third party developers like Peter Molyneux and Brian Reynolds.
  • “I loved the process of building games and, probably equally, I loved seeing how different teams could build amazing games in their own way.”

The Xbox days were a steady advance as he gained authority over more studios and was eventually tapped in 2014 to run and rehabilitate the brand after the disastrous Xbox One launch.

  • “They needed someone who could rally the troops around a passion for gaming and to sell that internally within Microsoft,” former Nintendo of America president Reggie Fils-Aime told Axios. “And that's exactly what he did.”
  • Spencer used the opportunity to expand access to older games, and convinced company leaders to green light a succession of mega-deals: 2014’s $2.5 billion purchase of Minecraft, 2021’s $7.5 billion purchase of Zenimax/Bethesda, with the acquisition of seven other studios in between.

Amid all that, Spencer gained a positive rep, and turned Microsoft’s gaming team into, of all things, an industry maverick.

  • The 2018 release of the Xbox Adaptive Controller, a configurable device focused on enabling people with physical disabilities to play games, was warmly received.
  • Spencer and his team pushed to get Microsoft’s games on rival platforms, rolled out the pioneering Game Pass subscription service, then untethered it from the console.

There were problems, though, and not just about a game flopping, or PlayStation or Nintendo outmaneuvering Xbox.

  • A 2016 Xbox party featuring scantily clad dancers at the Game Developers Conference prompted an apology and became a go-to example from Spencer about his division’s own shortcomings in Xbox’s very public pursuit of a more inclusive culture.
  • And in 2019, women in Microsoft, including its Xbox division, confronted the company about sexist comments and mistreatment.
  • Spencer said the moment was “painful.” He recalled sitting in a conference room with women who tearfully described their experiences at Xbox and “feeling the emotion, the anger, the disappointment.”

“I think it brought up a conversation that we should be having more often just around if people feel that they have a fair opportunity to work. Are they in an environment where they can do their best work?”

  • Out of that, Microsoft announced HR reforms. Spencer said he focused on making himself more available for team Q&As and increasing employees’ avenues for providing honest feedback in a way that feels safe.

The bottom line: Spencer’s goal of late has been to run the Xbox team well and keep narrowing the gap with competitors, reaching the company’s targets of billions of players.

  • In 2022, a gaming leader’s achievements may also be gauged by the environment they establish for their team.
  • “I've never felt like I'm the smartest person in the room or I've got the best education,” Spencer said. “It's really come from opportunities that others have afforded me and just recognizing and seeing and then making things possible. So when I'm thinking through any scenario, I try to think through if I were on the other side of something: what would I be grateful for?”

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