The recent news of Hi-Fi Rush studio Tango and Prey’s Arkane Austin being shuttered by Microsoft has sent shockwaves through the gaming community. This closure comes as part of a wider cost-cutting initiative by Microsoft, which is still ongoing. Reports indicate that ZeniMax studios are the main target of this initiative, with more cuts expected in the future.
During a meeting with ZeniMax staff, Xbox president Matt Booty expressed concerns about the company’s studios being spread too thin. He likened the situation to spreading peanut butter on bread, highlighting the need to free up resources. This led to the closures of Tango, Arkane Austin, Mighty Dog, and Roundhouse studios. Head of ZeniMax, Jill Braff, admitted that the studios were understaffed and struggling to keep up with an ever-growing workload.
Unfulfilled Potential
The closure of Arkane Austin comes at a time when the studio was deep in development of additional content for Redfall and potentially a new Dishonored game. Xbox had praised Tango’s Hi-Fi Rush as one of the most successful launches for Bethesda and Xbox in recent years. The closures have raised concerns about the future of these projects and the impact on the gaming community.
Microsoft’s acquisition of ZeniMax in 2020 for $7.5 billion was one of the largest in the industry’s history. This move was part of Microsoft’s strategy to strengthen its gaming division and compete with rivals like Sony. However, the recent cost-cutting measures indicate a shift in priorities, with a focus on streamlining operations and cutting expenses.
The cost-cutting measures at Xbox are seen as a response to the stalled growth of Game Pass, Microsoft’s subscription-based gaming service. The model was originally designed to support smaller, more creatively risky games. However, with Game Pass growth slowing down, Xbox seems to be less willing to take risks on new releases. Analysts suggest that US consumers still prefer purchasing games and add-ons through traditional methods, rather than subscribing to a service like Game Pass.
The fallout from Microsoft’s cost-cutting initiative has raised concerns about the future of the gaming industry. With major studios like Arkane Austin being shut down and projects being canceled, the landscape of gaming is changing rapidly. The impact of these closures on developers, publishers, and players remains to be seen. As the industry continues to evolve, it is essential for companies to adapt to these changes and find new ways to innovate and thrive.