The good vibes are over at Xbox. Changes to logo color and console capitalization and refocusing on “the community” have now shifted to focusing on its studios. And not in a good way.
Xbox is now on the verge of axing a number of its smaller studios, ones that have produced critical hits and award-winning titles over time, but may fall victim to slash-and-burn cost-cutting at the brand due to a lack of commercial wins. The studios that are in the most danger are:
- Double Fine, of Kiln, Keeper and Psychonauts 2
- Compulsion Games, of South of Midnight and We Happy Few
- Arkane, of Deathloop, Redfall and the upcoming MIA Blade game
- Ninja Theory, of the Hellblade series, including the literally just announced Senua at this past Xbox Games Showcase
Reporting indicates that some of these studios are “in negotiations” with Xbox to attempt to avoid closure, or some are looking to go up for sale or go independent. But the end result will be a seismic change at Xbox, no matter what’s happening.
Something has changed even since the Asha Sharma/Matt Booty era started. Booty, now Chief Content Officer of Xbox, spoke to Windows Central not even four months ago in February about how Xbox valued these smaller studios and their games:
“The first conversations Asha and I had when we first met to do all of this, to her credit, she immediately emphasized supporting our studios and our games. Our ecosystem is built to be a portfolio of everything from small games, to ongoing franchises, to the big blockbusters. We’re built at our core to build everything from Kiln to Call of Duty, everything from Minecraft to South of Midnight. That’s core to how we’re set up.”
“We cannot lose the ability to have those places where little sparks can grow into something big,” he went on to say. And now, those exact studios he referenced are facing possibly extinction.
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This news comes right as Head of Xbox Game Studios Craig Duncan and chief of staff Louise O’Connor are leaving the company after a long, long tenure, though the exact circumstances are unknown.
All of this is obviously meant to be cost-cutting to slim down Xbox and throw water on those sparks, sparks which can often be expensive relative to their sales, or their value to Xbox Game Pass, which is increasingly hard to even measure. It would seem the plan here is to take big swings for big hits more often. Before this news, there were reports that Sharma was looking to accelerate the release of big franchises like Halo, Elder Scrolls and Fallout, the kinds of megahits these other studios are not producing. Sharma has also indicated that “hard” times were to come, though this seems more sweeping than most envisioned. As of now, no closures or layoffs have been officially announced, and Microsoft has not responded to requests for comment.
The gaming industry has become more brutal than ever, with games harder and more expensive to make, leading to longer wait times and ultimately higher costs for consumers. There’s a lot of lose-lose going on, and Xbox has lost more than most. It is trying to change that, but it’s not clear if even deep, deep cuts will be able to turn the brand around.
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