Phil Spencer is right: AAA games are in big trouble

polygon.com:

All is not well in AAA games.

In the past, those outside of the industry assumed this to be true based on dipping sales, poor working conditions, and a cratering of creativity — as publishers like EA, Activision, and Ubisoft have stopped taking risks, and have spent more time and money on their diminishing pools of hit franchises.

But today, thanks to this week’s Xbox leak, we can see how the turmoil appears from the inside. Tucked away in industry business conversations, the head of a major console platform has explained the challenges ahead — and what led to this debacle.

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While sifting through the most interesting bits of the leak, Kotaku senior reporter Ethan Gach spotted an email from the head of Xbox, Phil Spencer. In just 650 words, Spencer summarizes how the shift to digital storefronts caught major game publishers flat-footed — and says that those publishers have continued to fail to adapt.

In an industry known for its secrecy, Spencer has been comparably open about how the sausage is made. By C-suite standards, of course. But even still, this note is refreshingly clear, vulnerable, and insightful. As other game journalists have noted, it’s rare to get such a helpful look behind the curtain.

Here’s an excerpt of the email in question from within the Xbox leaks:

In terms of subscriptions and the impact on larger publishers I realized that I haven’t really done a good job sharing our view on the disruption AAA publishers potentially see and how their role in the industry will likely change with the growth in subscription platforms like Xbox Game Pass. .

We should start with the question of why game publishers exist in the first place. And like many other forms of media the idea of a game publisher was