I woke up this morning to the news of Microsoft shuttering four studios at Bethesda. As I sit here writing this, I am appalled by the decision and cannot think of any justifiable explanation for this tragedy. 2023 and 2024 have been two of the worst years imaginable for the industry, with tens of thousands of layoffs occurring. With Microsoft’s financial standing, one would think that these studios they spent billions of dollars on would be safe and secure for the most part, regardless of sales. Today’s closure of Tango Gameworks, Arkane Austin, Alpha Dog Games, and Roundhouse Studios has proven that is not the case and will never be at Microsoft. These studios created games like Prey, Redfall, Ghostwire: Tokyo, and even Hi-Fi RUSH—a title touted as a hit across “all key measurements”.
By far, Hi-Fi RUSH is one of the best Xbox exclusives to release over the last five years. I finally got around to playing the title with its PlayStation 5 release, where I was blown away with everything it had to offer. Over three million players have experienced the title, a number I’m sure is even greater now with the recent PS5 release. It was something new, fresh, and exciting—exactly the type of games Microsoft was lacking. The game was a “break out hit” according to Aaron Greenberg, beloved by fans and critics alike. Further, the title won multiple awards, even taking home Best Audio Design at The Game Awards 2023. However, it’s clear that even a hit as big as Hi-Fi RUSH is not enough to save your studio at Xbox. What kind of precedent does this set for the remaining studios?
The true beauty we’re losing with Tango is the studio’s ability to propel young creatives and allow them to craft titles. Hi-Fi RUSH was directed by John Johanas, acting as only his second Director role at the studio. Ghostwire: Tokyo was directed and written by Kenji Kimura, a first-time Director. Companies like this are scarce throughout the industry, and instead of fostering the growth of this environment, Microsoft has elected to shutter it for the sake of numbers.
Many teams within Xbox, like Ninja Theory, who are set to release Senua’s Saga: Hellblade II in a few weeks, are likely now faced with impossible expectations going forward as a result. If a “break out hit” was not enough to save Tango Gameworks, what does a studio need to do to remain open? This will only hurt the morale at these studios, potentially even limiting the games these creatives are able to make.
What was the payoff of doing this? How is Microsoft benefitting? The ugly truth is they’re likely not. The leadership team has elected to sacrifice creatives, talent, and studios all for the sake of profit.
A Failure of Leadership at Microsoft
Phil Spencer takes home over $10 million in salary each year, while plenty of other company executives earn seven-figure salaries. And to state the obvious, Microsoft’s current market cap is $3.074 TRILLION dollars. These studios were not under a company barely scraping by; these studios were under the richest company in the world right now. It’s yet another example of the incompetency and blinded philosophies instilled within Xbox’s leadership team. For crying out loud, Microsoft has shut down more studios than games they have released this year.
It’s hard to feel like the leaders at Microsoft even understand the gravity of this decision and the impact it will have when the announcement is made via email to all studios at once. Moreover, Matt Booty refers to Alpha Dog Games as “Alpha Dog Studios” and Roundhouse Studios as “Roundhouse Games”. Does your leadership team truly care if they cannot get your studio’s name right in an announcement closing it? The company even ran a press release titled ‘Feel the Burn Today with the Fire Vapor Special Edition Controller’. It’s all incredibly tone-deaf. Microsoft’s core leadership team is failing everyone: themselves, their studios, and their fans.
Today’s decision is nothing more than a complete and utter failure of leadership. And I’m not sure the trust lost can be recovered. Truthfully, I find it hard to believe there is anything that can justify a decision as boneheaded and devastating as this one. As Microsoft, Sony, and others continue the consolidation spree across the industry, examples like this will remain in many minds, perhaps a sign of the consequences of chasing profits.
Tango Gameworks, Arkane Austin, Alpha Dog Games, and Roundhouse Studios: you deserved better.
