Microsoft Layoffs: Multiple Xbox Studios Closed, Teams Consolidated in Cost-Cutting Move
Tango Gameworks, the creator of “Hi-Fi Rush” and headquartered in Tokyo, along with Canada-based Alpha Dog, are among the studios facing closure.
Microsoft’s Xbox has revealed plans to shut down several gaming studios, including the renowned Arkane Austin. This decision positions Microsoft as the latest publisher to undergo significant restructuring amidst signs of a gaming slowdown.
Tango Gameworks, the creator of “Hi-Fi Rush” and headquartered in Tokyo, along with Canada-based Alpha Dog, are among the studios facing closure, as disclosed by Matt Booty, head of Xbox Game Studios, in an internal memo obtained by Reuters on Tuesday. While the exact number of employees affected remains undisclosed, Xbox declined to comment on inquiries regarding the scale of the layoffs.
According to Booty, the decision to streamline operations and shutter select studios aims to reallocate resources towards bolstering Xbox’s game portfolio and nurturing new intellectual property. This “reprioritisation of titles and resources” underscores Microsoft’s commitment to innovation and future growth within the gaming sector.
All affected studios operate under the umbrella of ZeniMax Media, which Microsoft acquired for $7.5 billion in 2021, alongside Bethesda. Despite these closures, Microsoft’s Xbox content and services segment reported a substantial 62% surge in third-quarter revenue last month, primarily attributed to the acquisition of Activision Blizzard.
News of studio closures echoes recent industry developments, with Take-Two Interactive also announcing the shutdown of two subsidiary studios as part of a broader restructuring effort, as reported by Bloomberg News last week. Earlier this year, Microsoft initiated significant layoffs, affecting 1,900 employees across Activision and Xbox.
In light of the closures, some developers from Arkane Austin will transition to other studios within the Bethesda ecosystem, contributing to ongoing projects such as “The Elder Scrolls” and “Fallout” franchises. Notably, servers for the game “Redfall,” developed by Arkane, will continue to operate, ensuring uninterrupted gameplay experiences for players.
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