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Studio Closures & Layoffs at Xbox Game Studios

Microsoft's Xbox division is making strategic changes, announcing the closure of several gaming studios including Arkane Austin, Tango Gameworks, and Alpha Dog. According to Matt Booty, head of Xbox Game Studios, this decision comes amidst a broader industry trend of studios shutting down amid a perceived slowdown in gaming. The move is part of a "reprioritization of titles and resources" aimed at deeper investment in Xbox's game portfolio and new intellectual property.

Xbox Game Studio Closure May 2024
Xbox Studio Closures

These closures, affecting units of ZeniMax Media and Bethesda, come after Microsoft's acquisition of ZeniMax for $7.5 billion in 2021. Despite the recent surge in revenue, notably a 62% increase in the Xbox content and services segment driven by the Activision Blizzard acquisition, Microsoft remains focused on optimizing its gaming ecosystem.


The restructuring also involves employee layoffs, although Xbox declined to specify the exact number impacted. Earlier this year, Microsoft laid off 1,900 employees from Activision and Xbox. However, some Arkane Austin developers will transition to other studios within Bethesda, working on projects related to renowned titles like "The Elder Scrolls" and "Fallout."


The closure of these studios doesn't affect ongoing gameplay, with servers for Arkane's "Redfall" continuing to operate for players. This move underscores Microsoft's commitment to refining its gaming offerings while adapting to industry dynamics and optimizing resource allocation.

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