Xbox will keep chopping off heads until morale improves

Jason Schreier: Studios in Microsoft’s Xbox Division Brace for Closures

Several studios in Microsoft Corp.’s Xbox gaming division, including Montreal-based Compulsion Games and San Francisco-based Double Fine, are in active negotiations to spin off as they try to thwart closure, according to people familiar with the company’s plans.

Cambridge, England-based Ninja Theory, the maker of Hellblade, is also in conversations with Xbox, as are several other studios across the portfolio that are at risk of being shuttered.

8 years ago, Microsoft announced their 5 new new Xbox Game Studios (Playground Games, Ninja Theory, Undead Labs, Compulsion Games, The Initiative), and it was a big deal. It showed that the company was listening to its fans and was acquiring enormous amounts of talented game developers, which they promised to help flourish under their leadership. Some studios were meant to make huge blockbusters, while others were expected to make smaller games that would fill out the Game Pass library as well as bring them accolades. It's literally the movie studio model where some movies are meant to make a billion dollars, while others won't make a ton of money, but will help with their reputation. And if you have enough of those, they can make a lot of money together.

Sadly, things have not gone great. I'll let the Xbox Game Studios Wikipedia page do most of the talking, but as of today, there are 14 active studios, 5 that have been sold off, and 17 of them have been closed or consolidated into other studios. And as Jason Schreier reports, at least 4 of those 14 active studios are currently figuring out if they're going to get sold or shut down entirely. And we haven't even gotten into the studios under Bethesda, such as Arkane Austin and Tango Gameworks, which had stories histories and recent successes, only to be shut down unceremoniously.

I'm not saying we need to bar Microsoft from acquiring any more studios, but every time they announce they've acquired one, I get very nervous for them.