Xbox turns away from Xbox Game Studios
The most striking aspect of Xbox’s recent layoffs and studio mergers is the dramatic change facing Halo. The franchise that started it all for Xbox is being relaunched under Activision, and Halo Studios is being massively downsized – essentially shut down. Sixteen years after Bungie’s final exit, a new attempt is underway to build an independent studio for developing Halo games. As they say, good things come in twos.
But this is about more than just a new home for Halo. On Tuesday, Microsoft announced a series of other, confusing measures, allegedly to “operate fewer business units, merge already closely collaborating groups, and consolidate our publishing expertise.”
Rare and World’s Edge (which collaborates with external studios on the Age of Empires strategy games) are going to Activision. Obsidian Entertainment is going to Bethesda – presumably not to be acquired by Bethesda Game Studios, but to join the studio family under the Bethesda Softworks umbrella, along with studios like MachineGames and id Software. Microsoft Casual Games is going to King, the creators of Candy Crush, formerly part of Activision but now an independent entity. Playground Games and Turn 10 are merging.
Xbox Game Studios loses several developers
These developments may seem unrelated at first glance, but they share a common theme. Or rather, they are moving in the same direction. With the exception of the merger of Playground and Turn 10, all of these moves involve developers leaving Xbox Game Studios.
This year, the group lost, among others, Minecraft developer Mojang (which was spun off and now reports directly to Xbox CEO Asha Sharma), Halo Studios, Rare, Obsidian, World’s Edge, Microsoft Casual Games, Turn 10 (effectively), Compulsion, Double Fine, Ninja Theory, and Undead Labs. This leaves only three studios remaining from the original 15: The Coalition, developing Gears of War; inXile, currently working on Clockwork Revolution; and the merged studio Playground/Turn 10, whatever its final name may be.
In addition to the drastically reduced number of studios, it is expected that the management and publishing departments of the game studios will also have to accept massive cutbacks. Studio head Matt Booty actually mentioned that, besides Halo Studios, the “management and central functions of XGS” are also the focus of today’s layoffs.
Microsoft owns three large, traditional game publishers: Xbox Game Studios, Bethesda Softworks, and Activision Blizzard. Strictly speaking, it’s more like four, since Activision and Blizzard each have their own publishing divisions. This means four marketing teams, four PR departments—essentially everything four times over. Asha Sharma likely recognized enormous potential for cost savings here, aiming to boost profits and keep shareholders happy.
Activision is currently overwhelmed with managing new studios, as the company doesn’t have much to do as a publisher. Of course, there’s the giant Call of Duty, but apart from that, its offerings are limited to a few retro franchises like Tony Hawk’s and Spyro the Dragon. Activision’s management and publishing department now have to work much harder. Blizzard and Bethesda, on the other hand, each have three, four, or more major franchises to manage and are therefore quite busy.
With Kojima Productions, Xbox Game Studios still has a prominent external partner. It’s worth noting that of the three remaining studios, The Coalition and inXile are working on Xbox console exclusives (Gears of War: E-Day and Clockwork Revolution). Playground Games plans to release Fable and Forza Horizon 6 for the PS5, but that could change next time. Perhaps XGS has a future as a smaller studio focused on exclusive games for the Xbox community.
