On May 7th, 2024, Microsoft announced it was shuttering Tango Gameworks, Arkane Austin, Alpha Dog Games, and Roundhouse Games. All of these studios were divisions of Bethesda studios and the layoffs impacted hundreds of employees. Our very own Grubb has reported that other internal game projects at Xbox Game Studios have also been struggling with Grubb stating that the reboot of Perfect Dark being described as being in bad shape. The studio behind that reboot, The Initiative, was first announced being led by industry veterans like Darrell Gallagher, who previously led Crystal Dynamics, Christian Cantamessa, the lead writer for Red Dead Redemption, and Brian Westergaard, the senior producer being 2018's God of War.

This week, things with the Xbox division got even more confusing with the announcement that Activision, a Microsoft-owned subsidiary, would be opening a new studio in Poland with strong AAA aspirations and "exclusively focused on creating a new narrative-based and genre-defining AAA franchise." This new studio is named Elsewhere Entertainment and will be based in Warsaw. To try and drum up excitement, Activision and Microsoft reps have announced the studio will feature "storytelling experts" from The Last of Us, Uncharted, The Witcher, Cyberpunk, Destiny, Tom Clancy’s The Division, and Far Cry. To return to my point about newly formed studio outfits sponsored by Microsoft, The Initiative, proves that star power doesn't necessarily lead to great final products that see the light of day.

As if the Xbox's identity wasn't already murky enough, there are also several reports that the CEO of Microsoft, Satya Nadella is largely reigning in the creative freedom the traditional leaders at the Xbox division and expressing a strong desire to see more Xbox titles on Switch and PS5. Regardless, the idea that any division of Microsoft would be sponsoring a new studio tasked with making a new AAA IP, is simply tone deaf. Then again, maybe you consider this good news because it is a sign that someone with budgetary power at Microsoft doesn't just want the Xbox division to make Call of Duty.

What a weird fucking year for games and douchebags holding the purses.

At this point Microsoft resembles a rich kid smashing its toys up and then demanding a new one immediately. There are, of course, explanations for this behavior (Activision and Bethesda are different units, the costs of running a studio in Poland are different from running one in Japan or Texas, etc...) but the optics are horrendous, the amount of time it will take to get any product is enormous, AND WE'VE BEEN HERE BEFORE.

Microsoft created a big new studio to create a new Perfect Dark game and so far they've produced...rumors from Jeff Grubb that the Perfect Dark game is in deep trouble. Their only product is Jeff Grubb telling us they won't actually produce anything for a long time if ever.

The new studios Microsoft made to produce Halo and Gears have a mixed record at best. Gears hasn't been the constant dumpster fire that Halo has, but the series feels completely irrelevant in the modern gaming landscape, even moreso than Halo. Maybe that was inevitable, but they've failed to reinvent it and attract new audiences.

Arkane Austin produced some great games but also made one of the worst AAA games in modern memory so perhaps that studio was unsalvageable (I'm not blaming the developers; it sounds like Bethesda imposed Redfall, but many developers may have left) but Tango had a proven track record of getting good games out.

Nadella getting directly involved tracks with a lot of what we've seen. He doesn't seem to 'get' or even really like games, and his general philosophy as a CEO doesn't seem to mesh with creative endeavors. I am now more convinced than ever that Xbox the console is either doomed or at least going to become just another device with no real exclusive features, like the Surface, rather than a traditional console.

The Activision purchase will end up being what destroys Xbox. It seemed like a risk at the time but I thought the plan was to go all in on Gamepass. Instead there was no plan and Xbox is just flailing, trying to make money however it can.

"Let's fire and hire people"

Microsoft is all over the place. They don't know what they want to do. They never recovered from the hit they took with the Xbox One debacle, and they have been slowly sinking ever since. I would compare it to the Titanic, but unlike that tragic event, Microsoft doesn't get my sympathy.

This has big "jangle keys in front of shareholders to distract them" energy. We already know most shareholder-types already completely lack object permanence and anything resembling foresight so this might do just enough to make them forget about the complete disaster of a week Xbox had last week.

But seriously, this makes no sense. I'm glad these developers have jobs and all, but it doesn't make up for Microsoft closing multiple studios or any of the other stupid things they've done the last 2... err... 5 uhhh... 10 years or so. They've entirely destroyed any trust left in them to have a realistic plan for the future beyond hoping their sacred cows they bought for $70 billion keep providing for them. Phil's a smooth talker but it's increasingly hard to look at his tenure at Xbox as anything other than a massive failure. The only thing they have going for them now is that they've been able to use their parent company's largess to bail them out when needed. They had Game Pass but apparently that wasn't good enough so they destroyed their content pipeline for it instead of investing more in it.

@ben_h: The shareholders of Microsoft are obsessed with AI right now. I doubt there's any significant reaction to something like a game studio being announced. Microsoft is such a massive company that it takes a lot to move the needle, and while the game business is no longer an insignificant part of their revenue or expenses after the Activision purchase it is very much a side hustle. We're talking about a 3 trillion dollar company. The largest in the world. Think about how big 3 trillion is. The Activision purchase is slightly over 2% of their value. And that was a $70,000,000,000+ purchase. So let's say that this is a $1,000,000,000 investment, which it probably isn't. That's slightly more than 1% of 2%, or one 3,000th of Microsoft's value. It's a rounding error.

I think it's as simple as the fact it's cheaper to operate in Poland than it is in Tokyo or Texas. Poland is a growing game development locale thanks to CDPR, so it's full of developers with AAA experience and you can produce a AAA quality game for less than you can in Japan or North America.

@ll_exile_ll: In THEORY you can produce an AAA quality game in Poland cheaper than in Japan or the United States. And I'm not even saying anything negative about Polish developers, who have made some great games, but rather that while on paper there's cost savings starting a new studio is harder and often more expensive than running or even buying an established one.

We've seen Microsoft start new studios and them have massive delays or produce bad games many times before. Say what you want about Arkane Austin and Tango but they both at least already had infrastructure and pipelines in place and had made good games (Redfall was terrible but prior games were quite good.) Now some developers had left so maybe they would have struggled too, but I bet if you'd kept Tango open you would have gotten a better game faster and even cheaper than the first game from whatever this new studio will be.

@ll_exile_ll: I don't know much about pay in Poland or whether there's tax incentives in game development, but i do know they have world leading employee protections, so at the very least the people working their should be treated better than the US studios.

CDPR being an industry leader in crunch culture seems to indicate things may not be much better there for game developers.