Phil Spencer: The Once and Future King

Movers & Shakers is a new series by Chain Store Guide; spotlighting the people who have made an impact on the retail & foodservice industries. Each month, we will highlight their accomplishments and contributions.

Phil Spencer is Microsoft’s Vice President of Gaming and in his short tenure he has earned the adoration of fans and respect from his competitors. The gaming division at Microsoft was in dire straits just a few years ago and Spencer is credited with revitalizing Microsoft and retail gaming as a whole. The company was poised to push the technology industry to a new edge in 2013, but instead they created a device that went in the opposite direction of consumer desires and would have potentially hurt the retail industry. These decisions led to multiple executive firings and also allowed their biggest competitor, Sony, to pull ahead.

As a result of this chaos, Phil Spencer was brought in to put out the flames. Starting at Microsoft as an intern in 1988, Spencer has more than fifteen years in the gaming industry. It was obvious that Spencer was the shining knight Microsoft needed. His unflappable demeanor and casual dress made him a far cry from the executives of the past. He was the leader of a new generation and he began by altering elements of the Xbox One to be what consumers wanted. Spencer’s “Play Anywhere” concept cracked the dam of video game retail exclusivity by moving sales from physical copies to digital downloads. His idea that all gamers should have instant access to what they want was unprecedented in the industry and became disruptive to brick-and-mortar sales.

Fast forward to fall 2020, Microsoft will be launching its new console alongside Sony and Google; also working on its own streaming platform, Project xCloud. His ideas are big, bold, and will continue to push the technology and gaming industry towards a more digital future.

This direction will be a difficult challenge for traditional big box stores, such as Walmart, and specialty stores, like GameStop, to overcome. The digital platform is a crafty move for Spencer and Microsoft as they are reaping higher profit margins and slowly ending the used game industry. Walmart, Target, BestBuy, Amazon, and GameStop have all resorted to selling digital codes in their stores, but this may not be enough. Some retailers now offer same day delivery options which has helped narrow the gap with Spencer’s platform as it allows users to shop from home, but it is not quite as convenient as an instant download or as flexible as a subscription service. GameStop faces the largest hurdle as they struggle for a foothold.

Phil Spencer has pushed bricks-and-mortar stores into a corner, but most impressively he has accomplished this with the backing of customers and unrivaled consumer choice. Developers and manufactures can use CSG’s Discount, Dollar, & Specialty Stores database to target companies that operate online storefronts and sell entertainment software as-well-as the hundreds of traditional retailers that continue to offer physical media and peripherals.