Jason Schreier, a prominent gaming journalist for Bloomberg, reports that the turmoil of Xbox’s layoffs after shutting down 4 studios under the Bethesda umbrella is far from over, hinting at more layoffs to come.
According to Schreier, the closure of Bethesda studios has left employees in disarray as there were no prior signals, with leaks from the Japanese-based Tango Gameworks suggesting a Hi-Fi Rush sequel in the works.
During an internal meeting to announce the studio closures, Matt Booty, head of Xbox studios, praised the first installment of Hi-Fi Rush but didn’t provide a clear reason for shutting down Tango Gameworks. He confirmed that the closure of Arkane Austin was unrelated to the underperformance of Redfall.
Booty mentioned that Microsoft Studios were spread too thin resulting in understaffed teams, leading to the decision to close certain studios to reallocate resources.
Jill Braff, head of ZeniMax/Bethesda Studios, informed employees that future studios under the umbrella would focus on fewer game development projects. This comes after supporting 9 global studios had proved challenging, with only 5 remaining after the closures.
Schreier cited sources suggesting that following the completion of the Activision Blizzard acquisition, Microsoft executives are more focused on the gaming business. Their previous strategy was to bolster Game Pass by acquiring studios to expand the game library, prioritizing membership growth over game sales. However, with Game Pass growth slowing, Microsoft is now looking to sell games on other platforms and reduce costs through layoffs and studio closures.
TLDR: Xbox’s turmoil continues with more layoffs expected after shutting down Bethesda studios, as Microsoft reevaluates its gaming strategy post-Activision Blizzard acquisition.
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