In a strategic move to concentrate on developing high-impact games, Microsoft has decided to shut down four of its game studios, among them Arkane Austin and Tango Gameworks. The closures were announced via posts on Twitter/X by the respective studios.
Arkane Austin is renowned for creating Redfall, an online vampire-hunting game that received a largely negative reception upon its release last year. On the other hand, Tango Gameworks has been celebrated for Hi-Fi Rush, a critically acclaimed adventure game, and for producing the popular horror series The Evil Within and the action-packed Ghostwire: Tokyo. These studios came under Microsoft’s ownership following the acquisition of ZeniMax Media, the parent company of Bethesda Game Studios, in 2020 for $7.5 billion.
Matt Booty, the head of Xbox Game Studios, addressed the staff in an email, explaining that the decision to close these studios is part of a broader initiative to focus on Bethesda’s successful franchises and to invest in the development of new ones. He emphasized that this refocusing would involve reallocating resources and staff to bolster other projects, which unfortunately results in the discontinuation of some teams and the departure of some colleagues.
As a part of this restructuring, Arkane Austin will cease further development on Redfall. Booty confirmed that the game’s latest update would be its final, although the servers will stay active for existing players. He also mentioned compensation plans for customers who had purchased the unreleased Hero DLC.
Furthermore, the closures include Alpha Dog Studios and Roundhouse Games, adding to the list of affected teams. Microsoft pledges to support all affected employees with severance packages that comply with local regulations.
This series of layoffs and shutdowns comes as Microsoft’s Xbox faces significant market challenges, with recent reports suggesting that Sony’s PlayStation 5 has been outselling it by three to one. Earlier in the year, Microsoft also reduced its gaming workforce by 1,900 jobs as part of an effort to establish a more sustainable cost structure within its gaming division.
