'We Need Smaller Games That Give Us Prestige and Awards.' This Statement by Xbox Game Studios Head Surprised Not Only Hi-Fi Rush Devs
Matt Booty of Xbox Game Studios believes Microsoft needs small and high-profile games. Such as Hi-Fi Rush, whose developers were shut down as part of the recent wave of layoffs.
Microsoft's decision to make further layoffs and close studios at the beginning of the week didn't gain the company popularity. Matt Booty's statement also surprised the players - the Xbox head mentioned (via The Verge) that Microsoft needs "smaller games that give us prestige and awards." In other words, titles such as Hi-Fi Rush from Tango Gameworks studio. The same one that was among the four closed teams.
Small hits of closed studios
Microsoft was supposed to be happy with the success of Hi-Fi Rush, making these words (spoken during a closed meeting) even stranger. In fact, even Booty himself praised this game in his speech, and according to Jason Schreier's reports, the Tango Gameworks team was thinking about developing a sequel. Except that it won't be possible anymore, now that Microsoft has shut down the entire studio which provided the Redmond giant with just the kind of small hit the Xbox CEO was talking about.
The peculiarity of this situation didn't escape the attention of other developers. Even before reports of Booty's words appeared, many developers criticized Microsoft's decision.
Thomas Mahler of Moon Studios (No Rest for the Wicked) pointed to the closure of Tango Gameworks as the reason his team never let themselves be taken over by a big publisher. Johan Pilestedt from Arrowhead Game Studios, on the other hand, couldn't understand why Microsoft didn't just sell the devs of Hi-Fi Rush instead of shutting down the whole studio right away (via X).
It's also worth quoting the reaction of John Johanas, director of Hi-Fi Rush. It's priceless.
Studies as thin as butter on bread
Microsoft laid off nearly 2,000 people at the beginning of the year, greatly contributing to a major wave of layoffs in the gaming industry. Unfortunately, this is apparently not the end, because the Redmond giant is preparing further cuts. As reported by Bloomberg, Xbox is to offer voluntary severance packages for "developers, quality testers, and other employees" of ZeniMax company.
As Jason Schreier found out, during the above-mentioned meeting, the head of Xbox's studios allegedly stated that the brand's studios were spread too thin - "like peanut butter on bread." As a result, the heads of these teams had problems with the availability of employees. Jill Braff, the CEO of ZeniMax, expressed similar views in a statement to the Bloomberg agency.
It's hard to support nine studios all across the world with a lean central team with an ever-growing plate of things to do. I think we were about to topple over.
Therefore, as we read earlier, Microsoft wants to focus more on a smaller number of titles. Braff also allegedly suggested that the reason for the closure of Tango Gameworks and Arkane Austin wasn't so much the sales results of their games (Hi-Fi Rush and Redfall), but plans to increase the number of these teams in preparation for the production of new projects.
Game Pass slows down?
Some internet users argue that these "job reductions" are a consequence of the expensive acquisition of Activision Blizzard. Proving this thesis may be challenging, but according to Bloomberg sources, this transaction could have impacted the current situation of Xbox in one way. After purchasing AB, Microsoft's owners were to start supervising the activities of the Xbox division more closely.
This would somewhat confirm the speculations that the recent layoffs weren't Phil Spencer's independent decision. The same applies to other rumors: regarding Game Pass stagnation.
At the end of April, analyst Daniel Ahmad from Niko Partners indicated that although Microsoft's gaming revenues increased by 51% year on year, it was entirely due to the acquisition of Activision Blizzard. Without this, Microsoft would actually have recorded a 5% decrease. Mat Piscatella from the NPD group suggests (via Bloomberg) that Game Pass has either stagnated or experienced minimal growth in interest after a significant increase in the years 2019-2021.
So it seems that despite Microsoft's efforts and Spencer's ambitions, players still prefer traditional game purchases and free-to-play titles over subscriptions. This is a bad sign for Xbox, which isn't making any money from console sales. The only good news is that this could bring Microsoft games to more platforms.
