Xbox boss Sarah Bond this week responded to questions about Microsoft’s decision to close several popular studios, stressing that ensuring the Xbox business remains viable in what she called a “moment of change” is key to long-term health.
Microsoft shocked the gaming world when it announced more devastating cuts to Redfall and pre developer Arcane Austin, Hi-Fi Rush, The Evil Insider developer Tango Gameworks and Bethesda owner Zenimax.
Microsoft bought Zenimax Media, the parent company of developers such as Bethesda, Arcane, ID Software and others, for $7.5 billion in 2021. Since then, Call of Duty maker Activision bought Blizzard for $69 billion.
In an email to staff from Xbox Game Studios head Matt Botti, Microsoft attributed the cuts to a “re-prioritization of titles and resources”. In the email first reported by IGN, Booty said: “We are making these difficult decisions to create opportunities to invest more in other parts of our portfolio and to focus on our priority games.”
Microsoft was heavily criticized by the developer community and Xbox fans after this move. Many noted that Hi-Fi Rush was a critically acclaimed release and, according to an Xbox executive, a highly successful release.
Not enough?#hiverrush #TangoJimworks pic.twitter.com/3OLhYAPbxU
– Kazuaki Egashira (@ega1002) 9. May 2024
keep saying Interview with Bloomberg’s Dina Bass at Bloomberg Tech in San FranciscoXbox boss Sarah Bond was first asked about the current lack of growth in the video game industry – a worrying factor that Xbox boss Phil Spencer recently cited when asked to explain Microsoft’s decision to lay off 1,900 workers from its gaming business.
“You know, the video game industry has been pretty stagnant for the last year or so,” Bond replied. “And even in 2023, we’ve seen some huge releases and very groundbreaking games. But none of it grew. A lot of this has to do with our need to attract new players and make games more accessible. But all this happened at a time when the cost of making these amazingly cool toys and the time required to make them were increasing.
“That’s why, as Xbox, our primary focus is how we help the industry as a whole and ensure our brand and everything we do endures through this moment of change.”
“It’s always very difficult when you have to make a decision like that.
Bond was then asked directly about the decision to close ZeniMax Studios this week. In response, it cited the industry’s current failure to meaningfully grow its audience and Xbox’s desire to survive this “change”.
“You know, it’s very difficult when you have to make a decision like that,” Bond said. “I go back to what I said about art. And when we see these fundamental trends, we feel a deep responsibility to ensure that the games we develop, the hardware we make and the services we offer, even when the industry is not growing and is in a transition phase. The announcements we made earlier this week are a result of this and our commitment to ensure the long-term health of the business.
“But despite our commitment to having our own studio and working with partners to develop small and big games, we are a platform where you can play GTA, but you can also play Palworld, where you can play Call of Duty and you can play ” can also play Pentiment, and it doesn’t change. And really, our commitment to Bethesda and the role it plays is part of Xbox and everything we do.
“It was really cool. I don’t know if you’ve had a chance to see it. The Fallout TV series came out on Amazon and it was great to see people fall in love with that universe, but that’s what the games are all about and people coming back and exploring. There’s some more cool stuff coming from our studios later this year. Indiana Jones and the Great Circle. I was an indie fan growing up and it looks like you were both there, so you should check it out.
“But right now our focus for ourselves and our team is on the people affected and doing what we can to help them through this difficult transition.”
Bond was then asked specifically about the closure of Tango Gameworks in relation to the success of Hi-Fi Rush and how the studio behind an award-winning and seemingly commercially successful title was able to close just over a year after release.
Here’s Bond’s answer:
“You know, one of the things I really like about game development is that it’s a creative art form. This means that the status and achievements of each studio’s games are truly unique. And so we look at every studio, every game team. We consider a variety of factors when faced with such decisions and trade-offs, but it all depends on our long-term commitment to the games we make. The hardware we build, the services and making sure we can deliver on those promises.
“We look at every studio, every game team, and look at the different factors when faced with these kinds of decisions and trade-offs.
Bond’s response has already gone viral here for not properly addressing the issue. As IGN reported, Xbox leadership held a town hall meeting with ZeniMax employees on Wednesday, May 8, where they attempted to answer key questions about Bethesda’s decision to close the studio. IGN has learned that Booty told employees that Arcane Austin’s closing was not related to last year’s disastrous failure of Redfall, but rather to the studio’s future prospects. Bloomberg’s Jason Schreier reports ZeniMax was under pressure to make significant cuts and chose Tango Gameworks and Arcane Austin because they wanted to represent projects that would require higher investment, rather than studios that were already working on green games. An attendee at the meeting told IGN that the assumption was that since these studios were currently promoting new games, they would have the weakest leg in deciding who should be excluded.
At the city council meeting, Booty reiterated that the hi-fi rush was a success, but according to one attendee, employees were told that the reasons behind this success had changed over the years and that the studio’s prospects had deteriorated. According to reports, Tango Gameworks has pitched Hi-Fi Rush 2 as a follow-up project. IGN understands that the Hi-Fi Rush 2 demo was rejected in part because it was deemed too expensive.
All of this supports concerns about the overall health of the Xbox business and the gaming industry in general. Microsoft, currently worth more than $3 trillion, faces a year of declining revenue in its gaming business when Activision is removed from the equation, as well as stagnant subscriber growth for Game Pass. Xbox console sales have declined amid rising development costs. Couple that with alleged internal scrutiny of Microsoft’s gaming business following its acquisition of Activision Blizzard, and you have a recipe for disaster.
Photo credit: Bloomberg Live/YouTube.
Wesley is IGN’s UK news editor. You can find him on Twitter at @wyp100. You can find Wesley here [email protected] or secretly at [email protected] to communicate