News Xbox isn't done closing studios or cuts

[sagadego20]

Microsoft’s Xbox Is Planning More Cuts After Studio Closings

Xbox is offering voluntary severance agreements to producers, quality assurance testers and other staff at ZeniMax as part of a broader cost-cutting initiative

www.bloomberg.com

The sudden closure of several video-game studios at Microsoft Corp.'s Xbox division was the result of a widespread cost-cutting initiative that still isn't finished.

This week, Xbox began offering voluntary severance agreements to producers, quality assurance testers and other staff at ZeniMax, which it purchased in 2020 for $7.5 billion, according to people familiar with the company's plans. Others across the Xbox organization have been told that more cuts are on the way.

During a town hall with ZeniMax staff on Wednesday morning, Xbox president Matt Booty praised Hi-Fi Rush but did not specify why the company had shut down the development studio behind it, according to three people who were in attendance.

Speaking about the closures more broadly, Booty said that the company's studios had been spread too thin — like "peanut butter on bread" — and that leaders across the division had felt understaffed. They decided to close these studios to free up resources elsewhere, he said.

Before its closure, Arkane had been looking to return to its roots by pitching a new single-player "immersive sim" game, such as a new entry in the Dishonored series, according to the people familiar.

 

[Sadist]

So Tango is probably in the dark on why they were closed.

But oof, that’s rough. More staff let go. If a studio understaffed, I can understand that you won’t hire like crazy. But if you bought these studios, you were already aware of that fact, right?

Yeah I know, it’s about controlling the IP and getting that value, not so much the staff that comes with it. Still… sigh.

 

[metwars]

this just keeps getting worse and worse. Learning that we were possibly getting a sequel to Hi-Fi is just the cherry on top in terms of everything wrong here.

 

[FiniteInfinities]

Tango was in the process of pitching a sequel, said the people, who asked not to be identified discussing nonpublic information.

Before its closure, Arkane had been looking to return to its roots by pitching a new single-player “immersive sim” game, such as a new entry in the Dishonored series, according to the people familiar.

My disappointment is immeasurable and my day is ruined.

 

[Paxie]

So Tango is probably in the dark on why they were closed.

But oof, that’s rough. More staff let go. If a studio understaffed, I can understand that you won’t hire like crazy. But if you bought these studios, you were already aware of that fact, right?

Yeah I know, it’s about controlling the IP and getting that value, not so much the staff that comes with it. Still… sigh.

The reason both Arkane Austin and Tango were closed was that they were pitching games that would've been years out and would've required resources they could otherwise spend on CoD and other big IPs. This entire debacle should remind people that the C-suite do not get their positions because they know what they are doing; if anything they are almost always the most moronic and myopic people within a company. Killing Tango for wanting a sequel to their unanimously loved game is just appalling.

 

[CannonBallBob]

I wish they learned how to internally develop games before buying studios, and then proceeding to layoff a ton of employees from these acquired studios. The Microsoft model of game development is so broken.

 

[Steve]

Ninja theory are cooked, Microsoft has done absolutely no marketing and no one knows it’s releasing in 1-2 weeks.

This is some crazy level of incompetence for a brand that’s under a trillion dollar company.

 

[Hocot8]

It seems like these studios were already on the chopping block but the Activision purchase sped it up.

 

[HockeyBird]

I was thinking the flood gates of bad news was coming after yesterday. People losing their jobs and disillusioned employees means people are running to the press to tell people what's going on behind the scenes.

 

[Mekanos]

GamePass seems like it's maxed out its usefulness:

 

[Mango]

Gotta love Microsofts business plan of sucking up every small company they come across and then closing them.

 

[oomoepoo]

Before its closure, Arkane had been looking to return to its roots by pitching a new single-player "immersive sim" game, such as a new entry in the Dishonored series, according to the people familiar.

FUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

 

[Dark Cloud]

Microsoft- We’re just getting started.

 

[Neverx]

I'm so done with Microsoft. I'm not even interested in Hellblade but no way Ninja Theory survives as they've barely advertised it.

GamePass seems like it's maxed out its usefulness:

[The Verge] Microsoft internally debating whether or not to release new Call of Duty titles into Game Pass

The hits just keep on coming https://www.theverge.com/2024/5/8/24151814/microsoft-xbox-layoffs-strategy-changes-arkane-tango Hellblade 2 is also being considered for a PS5 release

www.resetera.com

Gamepass was a mistake

 

[metwars]

GamePass seems like it's maxed out its usefulness:

yea....it really seems like we are finally getting the answer about if Game pass was sustainable long term or not, and the destruction it has left in its path is proof enough.

 

[Mer.Saloon]

Yeah, I'm not trying to be smug in saying I was always suspicious of Gamepass. Just because, look at Netflix or Spotify, and what they had to do to get their services profitable. And even then, they're profitable because they're also the dominant player in town, while every other streaming service is losing money by the truckload.

So how does a service that isn't even the number one video game streaming service make money? It's not even like Gamepass is THAT much more expensive than NSO of all things.

And it really sucks because from a consumer standpoint, it's a bloody incredible service!

 

[Prophet64]

Late-stage capitalism what, what! Consolidate, consolidate, and then put to torch.

Pretty depressing to read.

 

[lexony]

how is this keep getting worse.

 

[Evilnemesis8]

ABK deal has increased the scrutiny from Microsoft into Xbox and they're asking them why aren't their shit as profitable as CoD/WoW/Candy Crush?
Bethesda is going to bolster Bethesda Game Studios to do more Fallout/ES and continue support their online games.
I would not be surprised if we hear in the not so distant future another round of layoffs as Xbox Game Studios proper with some of their long gestating projects that have not materialized itself. Especially the ones where the ceiling for some of the projects is probably lower than some would like to begin with.

Shit is absolutely putrid over there, just a complete lack of vision.

Yeah, I'm not trying to be smug in saying I was always suspicious of Gamepass. Just because, look at Netflix or Spotify, and what they had to do to get their services profitable. And even then, they're profitable because they're also the dominant player in town, while every other streaming service is losing money by the truckload.

So how does a service that isn't even the number one video game streaming service make money? It's not even like Gamepass is THAT much more expensive than NSO of all things.

Gamepass was probably fine if Xbox remained much smaller as a division but with the acquisitions of two large previously third party publishers,one being absolutely humongous, things didn't make sense. All the different pieces didn't make sense together as a cohesive strategy.

 

[Ricimer]

Xbox needs to exit the big boys tables already. A complete joke right now.

 

[Hocot8]

well thank god a got a couple years of game pass already banked lmao. As long as it's still cost effective for me than I'll still subscribe but it's giving "make the service worse and more expensive" energy. Or what every streaming platform is pretty much doing lmfao.

But yes it's pretty clear that gamepass has failed.

 

[HockeyBird]

 

[edamame]

Xbox Series L

 

[Wockio]

I assume these are all orders from way high up, beyond the gaming division, and Xbox people like Phil and Matt were forced to cut corners.

I don't really see a future for Xbox the way things are headed. Within 5 years the Xbox brand will be no more and Microsoft will be reduced to being a publisher with three or four big studios making games for other ecosystems.

 

[EvilChameleon]

Xbox needs to exit the big boys tables already. A complete joke right now.

Well that would likely cause even more studios to close and more people to become unemployed. I'd much rather they return to the competence table and cut the horseshit.

 

[RochHoch]

It's starting to feel like Xbox paid 69 million to torch what was left of their platform and get absorbed by Activision.

How in the fuck did that go through without anyone considering that it might not be the best idea

 

[Razgriz]

I assume these are all orders from way high up, beyond the gaming division, and Xbox people like Phil and Matt were forced to cut corners.

Which is all the fault of Phil anyway because he wanted to expand his Wikipedia page with a few new acquisitions instead of trying to grow what he already had. Even if it came from higherups, the decision to pursue the ActiBliz merger came from Phil Spencer, not from Nadella, not from the shareholders, not from anyone else.

Let's not blame this on a vague "higher-ups"; Phil made the bed here, now the employees at his studios have to sleep in it because he sure as hell isn't on the chopping block.

 

[TreIII]

So Tango is probably in the dark on why they were closed.

Is there any truth about how, allegedly, a number of Mikami's old pals were already slated to follow him from Tango to his new start-up, Kamuy, Inc.?

Granted, it still wouldn't excuse Xbox's attitude to torch things, even if there was some proposed fear of a "personnel hemorrhage".

 

[Pringles]

Xbox is so over

 

[Raccoon]

buy everything
no third party games for other systems
yooo nice
close everything
no first party games
mfw

 

[EvilChameleon]

Let's not blame this on a vague "higher-ups"; Phil made the bed here, now the employees at his studios have to sleep in it because he sure as hell isn't on the chopping block.

At some point he'll have to be. I just wonder how many more studios need to get jettisoned before he is.

 

[MisterSpo]

Tens of billions on hand to buy the world's largest publisher when you realise its scumbag leadership are vulnerable; nothing available to hang on to the people you've bought up, used and mismanaged.

 

[ProteusRidley]

God Bless Microsoft for saving the Gaming Industry. Getting as bad as Embracer now.

 

[ProteusRidley]

Also, fuck off for saying no to a new Dishonored game.

 

[soundchaser]

RIP Double Fine

 

[AngryAlchemist]

This is the most depressing layoffs I've ever seen in the game industry. As much as Embracer is absolutely trash, that company never seemed viable, never even had the funding to produce games and everyone could see from a mile away they were going to close studios off. While there was always the fear of consolidation under Microsoft, and anyone who had a brain was against the Activision acquisition, they at least seemed like they might be viable before the ABK venture.

Anyone who isn't blaming Phil is delusional. It was his idea to put Microsoft under one of the dumbest business models, Gamepass, which essentially requires paying for tons of content while getting minimal amounts in return. It was also his decision to buy ABK, which has become one of the most disastrous moves for Xbox because surprise surprise, investors were tired of Phil's shit and actually wanted to see the money after letting him invest so much into the brand. Now there's no results and it's these studios that have to suffer for it.

Something has to change. I mean how many more years of mass closures are we going to get not from companies leaking money, but simply from not having the infinite growth that they want. Infinite growth isn't possible. These divisions might not have been huge money makers or even profitable yet but Xbox can afford it. Somehow Square can save most of the Forspoken staff and merge them into their game divisions but poor indie publisher Microsoft can't do the same. If the difference is labor laws, then those need to change. Seriously I don't want this to be about "the games", but how are Western AAA publishers expecting to make more profit with making their lineup even more anemic?

I don't care if it's just business, I absolutely hate Microsoft.

 

[MaitreWakou]

Which is all the fault of Phil anyway because he wanted to expand his Wikipedia page with a few new acquisitions instead of trying to grow what he already had. Even if it came from higherups, the decision to pursue the ActiBliz merger came from Phil Spencer, not from Nadella, not from the shareholders, not from anyone else.

Let's not blame this on a vague "higher-ups"; Phil made the bed here, now the employees at his studios have to sleep in it because he sure as hell isn't on the chopping block.

This. People need to stop putting the "good guy" persona on Phil already. He's always been a terrible lead of Xbox who somehow got a pass thanks to his made up persona and his "he's actually a gamer who care about Xbox !" image.

His terrible management of the brand is what has lead us to here.

 

[Suswave]

lmaaaaaaaao I've been telling people this for years

hope those acquisition cheerleaders feel the rug being pulled out from under them

 

[KingOnion]

Xbox is so cooked. I hoped MS would at least run the ship longer than this. Phil’s legacy is going to be buying a bunch of studios and then shutting them down, embarrassing. At least Mattrick didn’t kill a good chunk of the industry while he fucked everything up.

 

[APileofBananas]

I don't even know where the brand goes at this point?

I guess if nothing else they could be a large 3rd party publisher because of the IPs they own?

Don't know what the future for game pass is going to be either.

 

[Magic-Man]

Fuck off Microsoft. Fuck off forever. I'm selling this console ASAP. No other console company is this bad.

 

[Josh5890]

From an ex Microsoft employee:

lmaaaaaaaao I've been telling people this for years

hope those acquisition cheerleaders feel the rug being pulled out from under them

I've seen a lot of former pro acquisition folks come out the last couple of days and wish that the Acti/Blizz purchase never happened. Everyone is starting to come around to the fact that it was a mistake.

 

[AngryAlchemist]

Ninja theory are cooked, Microsoft has done absolutely no marketing and no one knows it’s releasing in 1-2 weeks.

This is some crazy level of incompetence for a brand that’s under a trillion dollar company.

I actually find it offensive how little effort they put into their Hellblade II tweet ad today.



Ninja theory fans are scared shitless they're going to get shut down and this is what you post? I've always thought the trailer drops on Twitter from Nintendo were a little lame but holy shit they're actually trailers compared to whatever this shit is.

FUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

 

[Mekanos]

I legit would not know Hellblade was launching this month if it wasn't for people bringing it up regarding these closures and layoffs.

 

[Seven]

lmaaaaaaaao I've been telling people this for years

hope those acquisition cheerleaders feel the rug being pulled out from under them

One can hope, but you know those people will still salivate over rumors of Sony buying Square Enix or Microsoft acquiring Sega.

 

[Hailinel]

Xbox is so cooked. I hoped MS would at least run the ship longer than this. Phil’s legacy is going to be buying a bunch of studios and then shutting them down, embarrassing. At least Mattrick didn’t kill a good chunk of the industry while he fucked everything up.

Mattrick guided Xbox to become an all-in-one media box that no one wanted, saddled with DRM policies that people shouted down. It was bad, but at least there was a clear thought process.

Phil fucking annihilated entire development studios because he has no plan.

 

[OctoSplattack]

“It’s hard to support nine studios all across the world with a lean central team with an ever-growing plate of things to do,” [Jill Braff] said.

If you can't handle running a ton of different studios, why the hell did you buy a ton of different studios? Did Microsoft seriously spend this long trying to buy all these studios, but never think about the actual logistics of how they were going to manage them and foster the expansion and growth of them all? Did they seriously not think about this and put themselves in a corner where one of the easiest options ended up being to panic kill two of their most acclaimed studios, because the mere thought of having more teams to supervise if those studios grew scared the shit out of them, on top of the whole GamePass mess? What the hell are they even doing over there?

 

[aus89]

Microsoft leadership are pushing hard on investments in AI... The little pandemic hit where gaming was the hot thing in tech investment due to its ties to VR/AR... metaverse.... crypto and all that garbo is done and so are MS leadership -

They need huge amounts of money to power and train their AI data centres (AI data centres use 4 times as much energy as a cloud server facility) and they, probably rightly, consider that every business/corporation will be using/investing in AI in the near future, and they can generate content like games, movies etc... from the primordial nuclear powered AI sludge while they watch the planet burn and don't have to worry about pesky things like game developers or creatives and basically own the planet when AI becomes a requirement to exist in the world.

 

[Razgriz]

From an ex Microsoft employee:

Yeah this hits the nail on the head. I've seen the take that Phil had essentially a blank cheque as the head of Xbox, but like most blank cheques, the asterisk is that it's generally something within expected reason. It's not an excuse to just start wasting excessive amounts of money on vanity projects.

The Bethesda acquisition was a smart move; it was "only" 7.5B USD, it gives them a good set of studios, employees and strong IP to work with and it also largely wasn't controversial since Microsoft just kinda... had no notable IPs that weren't in stagnancy hell. By contrast, ActiBliz cost them around 10 times that and in exchange, they got... COD, WOW, Crash and Overwatch. Alongside a company mostly known at that point for how awful it is to work there if you're a woman. And that's before delving into how it generated a lot of bad PR due to the lengthy antitrust investigations from various countries (something which big tech in general is facing these days, but Microsoft was largely staying out of the blast zone until they attempted to acquire ActiBliz.)

 

[CannonBallBob]

using/investing in AI in the near future, and they can generate content like games, movies etc... from the primordial nuclear powered AI sludge while they watch the planet burn and don't have to worry about pesky things like game developers or creatives and basically own the planet when AI becomes a requirement to exist in the world.

I truly don't think we have to worry about people deciding to pay money for robot generated content. People barely pay money for giant big blockbusters with the same basic plot beats adnaseum.