Chances are they probably the only studios that could be axed without affecting the release pipeline too much.
[Bloomberg] Microsoft’s Xbox Is Planning More Cuts After Studio Closings, Also Details on game pitches from Arkane & Tango before closure
- Thread starter Red Kong XIX
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Not saying you're saying this, but in no way does this absolve Spencer, to be clear. The cuts would have been run by him and he signed off on them.
Phil's real career defining moment wouldn't have been buying Nintendo, but instead laying off Miyamoto.
I mean in real terms you are in luck because Microsoft Gaming wasn't growing, it was flat to declining, which is its own problem. it is why Microsoft is a few steps removed from becoming a multiplatform publisher.
Oh, I'm not absolving Spencer at all. This is absolutely still his fault. His terrible leadership and the godawfully stupid Activision buyout are all direct causes of this. He's just not the one who specifically picked Tango and AA to kill.
More thinking the devs will leave and form their own independent studios. They have the talent, something clearly the corporations don't value and are getting rid of to make the line go up.
I'm not even sold on that, to be honest. Or at least, he would have known what they would come back with based on the size of the cuts he asked for.
I mean, you need capital to do that so if new studio heads didn't prepare for this, it's gonna be an uphill battle for all of them.
Shit sucks.
Maybe I'm WAY off here but I still think if MS had stayed the course they could have turned Xbox around.
They finally got their enormous roster of world-class studios. If they'd sorted out their production pipelines they should have been able to pump out banger after banger every three months of the year.
If they kept those games exclusive (save for the stuff required multi due to ABK deal ofc), people surely would have bought more Xboxs to play them.
They have an absolutely insane amount of studios AND incredible IP.
As sad as it sounds, it seems the zenimax aquisition was driven to just get The Elder Scrolls, Starfield, Fallout and maybe Doom.
In the other side, Ninja theory, double fine, obsidian, compulsion, inxile, undead labs and playground were independent handpicked studios, bought individually and not part of other company.
The same could be applied to toys for bob, microsoft wanted ABK for candy crush, Call of duty and maybe WoW, maybe that's why they allowed them to depart.
I kind of feel like it's the opposite. The ActiBlizz purchase was a sound one, and a buffer or safety net in case the bottom fell out of GamePass/Xbox console, which appears to be happening. I imagine that might have also been the understanding for Phil when MS signed off on such a massive purchase. They weren't just gonna let him spend $70 billion to keep GamePass and Series X on life support.
This is of course, not quite what people who are fans of Xbox as a hardware brand and platform thought they were signing up for. Bad news for them but it allows MS some angles to pivot their business in a more successful direction since people simply aren't buying what they are selling right now.
i mean if they give zenimax orders to hit a certain expense cap, such that it requires the closure of two studios, while simultaneously still communicating a revenue expectation that wouldn't give them space to close studios with games coming relatively soon, microsoft essentially made the decision for them, and just used the zenimax management as a middleman to take the blame
I agree this was the plan. The problem is, they couldn't manage the studios they had.
How much will Actiblizz be worth once it's been under this Microsoft management team for a while?
I've seen you post about this in this thread and such and I get you. I tried to be as optimistic as possible but still had my doubts. I can't tell you how to feel but it takes a lot to say things the way you are. Try not to beat yourself up about it. It happens. What matters is having the strength to post like you have. Just wanted to mention that.
Which is definitely a thought I've been having more and more lately. Wonder how the rest of the year goes from here.
Fucking hell, more cuts.
Good to have more context as to how the closures happened, and good on Jason for reporting all this.
Still, these layoffs are horrible in the end.
Good to have more context as to how the closures happened, and good on Jason for reporting all this.
Still, these layoffs are horrible in the end.
I think this is the proper reading. Xbox have known where they stand in terms of numbers regarding Hardware and Gamepass. These purchases of Bethesda and ABK are steps towards a 3rd party future. The culling of smaller studios and more games on competitors platforms is just the userbase being clued into the plan after the fact.
Oh I 100% agree with you, but the financial execs at Microsoft probably saw that Xbox was way off its projections after a disastrous Q4-Q1 2023-2024 for the Xbox division (ignoring ABK acquisition) and seeing a bleak finish to this generation for the business.
Xbox is way off track for the next 2-3 years compared to what Spencer's projections looked like in late 2021 when they were deciding whether to spend $75 billion on ABK.
It's always possible a turnaround can happen with a strong set of franchises to launch the next generation, but in the short term, the financial team at Xbox probably demanded cuts out of everybody at Xbox Game Studios and some small studios had to get the axe or have new projects halted.
Some backstory about a few of these studios:You can see it in pure raw studio closure numbers (sourced from Danny on Install Base):
Same with studio acquisitions over the past five years (via fiendcode on Install Base):
Sugar & Rockets, Contrail and Arc Entertainment merged and became Japan Studio.
Camden Studio merged with Team Soho (missing on that list) and became London Studio.
It sucks. I really, really hope Double Fine survives this. Their games are too special to lose and I don't know if Tim will be able to muster up another team if he loses this one.
The person in charge of Zenimax: Matt Booty, who is also responsible for the Xbox studios!
So it's still the Xbox team and Xbox execs that made these cuts.
They basically cleaned house at the upper level of the studio after Infinite and laid a bunch of other people off, so they weren't really fine. Being the studio dedicated to one of their flagship IPs (I guess still?) probably helps.
People were just more positive about the upper level culling because it felt long overdue after 12 years of unmet expectations.
You simply can't make these huge purchases when your entire business plan and brand is going down the toilet. The simple reality is that Xbox cannot sell enough consoles in order to make these fucking gigantic acquisitions viable. There aren't enough players within their ecosystem to buy the number of games or subs that would ever make it make sense. It's not sustainable. And their gamble on explosive Gamepass growth off console has not happened.
They gambled. Lost. And now the backup plan is to axe anything not immediately profitable and basically go third party.
Well done Phil, what a job you have done
They gambled. Lost. And now the backup plan is to axe anything not immediately profitable and basically go third party.
Well done Phil, what a job you have done
So it boils down to whether it's more profitable to just being a bank?
His job isn't to protect his employees? It's to deliver on the bottom line, and MS is not a company that knows how to succeed in a creative industry. It's totally alien to their corporate DNA. What is happening is absolutely predictable for them.
Never have I seen the sunk cost fallacy so succinctly applied, this is incredible stuff.
Im not so sure this was ever happening. It like a catch 22. In order to get all of those studios and IP and big games, they needed to spend a ton of money, and that amount of spending was never going to be able to be justified by Xbox' place in the market. The more Phil was allowed to spend the more expectations from Satya and the board. Xbox isn't some charity project. Phils been at the head for 10 years.
Yeah my mind goes to I hope they extend the courtesy they extended to Toys for Bob to these other teams. But then they go and shutter tango and now I have no fucking clue what to think anymore.
There is no consistency outside of the disappointment
I think Spencer undoubtedly has one foot out the door if only because his strategy failed spectacularly.
Like what trust would Satya have in Phil now after the last ten years and the total miss it was lol.
Like what trust would Satya have in Phil now after the last ten years and the total miss it was lol.
I can't help but think that if these kinds of cuts are on the table there's someone in Activision management who would do a 'better' job of it than Phil Spencer.
There are a lot of people under the Microsoft banner now that have had more success than Xbox has.
If there isn't some intangible long-term 'growing the Xbox brand' strategy, and you're just going to close studios by spreadsheet, I wonder what Phil has to offer.
There are a lot of people under the Microsoft banner now that have had more success than Xbox has.
If there isn't some intangible long-term 'growing the Xbox brand' strategy, and you're just going to close studios by spreadsheet, I wonder what Phil has to offer.
Xbox may get one more console launch; a 2027-ish launch with exclusives ready from every possible studio. If that still flops relative to PS6, then they're likely cooked in hardware and highly likely to go full 3rd party route by 2032-2033.
Can't see Nadella and co keeping the hardware business as a money loser if they can't ever get to proper competitive scale again (70-80 million units per generation).
At this point, it's really hard to see any sort of hardware future if they're just focused on the AAA multi-platform (or mainly PC/mobile) titles like Minecraft, CoD, WoW, Candy Crush, Diablo, Elder Scrolls, Fallout, etc.
Can't see Nadella and co keeping the hardware business as a money loser if they can't ever get to proper competitive scale again (70-80 million units per generation).
At this point, it's really hard to see any sort of hardware future if they're just focused on the AAA multi-platform (or mainly PC/mobile) titles like Minecraft, CoD, WoW, Candy Crush, Diablo, Elder Scrolls, Fallout, etc.
As a Microsoft-owned game studio, I'd take as much time as possible developing a game because you know that you're going to get the axe once your game is released regardless of quality. I'm worried for Ninja Theory.
Guilty by association at this point it don't matter. The demand came from the top and rolled down hill so the whole damn mountain is fucked.
It sounds very optimistic to think that we'll get to 2027 and still be talking about "Xbox consoles" or "exclusives". They ain't waiting that long. They may not wait out the year.
Ninja Theory desperately trying to call the C-suite to let them know Hellblade 2 needs another 5 years in the oven.
Even if they didn't decide what studios to shut down, and it's just "well they're the farthest from a next release"
The complete lack of nuance to recognize they just put out your closest title to a GOTY award, and the idiocy to close them down because "whelp you're the weakest link, it's just business!"
Just utterly brainless
The complete lack of nuance to recognize they just put out your closest title to a GOTY award, and the idiocy to close them down because "whelp you're the weakest link, it's just business!"
Just utterly brainless
It really kills any incentive at all....honestly pretty mind boggling corpo logic from 10k feet up.
So it's not that pitching a new project will get your studio closed, it's that being in the position where you would pitch a new project will get your studio closed
I'm done I think. I think the Series X will be my last Xbox. I can't continue support what what's going on at this company. They were playing 4D chess all along… I just didn't realize it was against me the consumer who wanted more games from Arkane and Tango. Time to learn to build a PCs again to go with my Switch 2…