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Microsoft's Xbox Initiates Studio Closures Amid Industry Shifts
Microsoft's Xbox is shutting down multiple gaming studios, including Arkane Austin, Tango Gameworks, and Alpha Dog. The closures are part of a cost-cutting move amid signs of a gaming slowdown. The exact number of employees impacted by the layoffs remains undisclosed.
This decision comes as the gaming industry faces signs of a slowdown, prompting publishers to reevaluate their operations.
Matt Booty, the head of Xbox Game Studios, confirmed the closures in a memo seen by Reuters. While the exact number of employees affected by the layoffs remains undisclosed, it is clear that these studio closures will result in job losses.
The decision to shut down these studios is part of a broader trend in the gaming industry. Data from research firm Newzoo suggests that growth in personal computing and console gaming is expected to remain below pre-pandemic levels. Gamers are recording fewer hours of playtime due to weaker release schedules.
According to Booty, this move is a "reprioritisation of titles and resources" aimed at allowing Xbox to invest more deeply in its portfolio of games and new intellectual property. By consolidating teams and streamlining operations, Xbox hopes to focus on delivering high-quality gaming experiences to its users.
It is worth noting that all the affected studios are units of ZeniMax Media, which Microsoft acquired for a staggering $7.5 billion in 2021, along with Bethesda. This acquisition has significantly expanded Microsoft's gaming portfolio and solidified its position in the industry.
Despite the studio closures, Microsoft's Xbox content and services segment reported a remarkable 62% jump in third-quarter revenue last month. This surge in revenue was largely driven by the recent acquisition of Activision Blizzard.
This move by Microsoft follows a similar trend in the industry. Last week, "Grand Theft Auto" maker Take-Two Interactive announced the closure of two subsidiary studios as part of a mass layoff. The gaming industry is undergoing significant changes as companies adapt to evolving market dynamics.
It is important to note that some developers from Arkane Austin will be reassigned to other studios within Bethesda. They will continue working on projects related to popular titles such as "The Elder Scrolls" and "Fallout."
Despite the closures, servers for the game "Redfall," developed by Arkane, will remain online for players to enjoy.
Microsoft's Xbox is shutting down multiple gaming studios, including Arkane Austin, Tango Gameworks, and Alpha Dog.
The closures are part of a cost-cutting move amid signs of a gaming slowdown.
The exact number of employees impacted by the layoffs remains undisclosed.
Source: REUTERS