Xbox Has Had More Studio Closures Than First Party Game Releases So Far In 2024

We’ve almost reached the end of the first half of 2024, and Xbox has already had more studio closures than first party game releases in the year so far.

Today, Xbox announced four studio closures, all of which were acquired by Microsoft in March, 2021, as part of Bethesda Game Studios. These studios are Arkane Austin, Alpha Dog Studios, Tango Gameworks, and Roundhouse Games. In addition, the company also let go of Crash Bandicoot developer Toys for Bob and laid off many employees from Activision Blizzard King as well as several Xbox Game Studios.

The sentiment surrounding major publisher acquisitions like Bethesda Game Studios and Activision Blizzard King was that Microsoft would provide a “blank check”, so to speak, in order to empower them and enable their creativity. However, it no longer appears that this is the company’s focus, with Xbox shutting down or letting go of five studios and releasing just one first party game, Senua’s Saga: Hellblade 2, in the first half of 2024.

In an email sent out to employees, Matt Booty, head of Xbox Game Studios, wrote that the studio closures are grounded in prioritizing high-impact titles and further investing in Bethesda’s portfolio of blockbuster games that players invested in over many decades. He added that, in order to double down on these franchises and invest to build new ones, the company will look across the business to identify the opportunities that are best positioned for success. According to him, the re-prioritization of titles and resources means a few teams will be realigned to others and that some will part ways with the company.

Booty’s statement clearly implies that Microsoft’s goal with these acquisitions is to ensure profitability and not to enable creativity. Had the latter been the case, Tango Gameworks, the studio behind one of the highest rated first party Xbox titles, Hi-Fi Rush, would not have been shutdown. This suggests that studios like Double Fine may also be in danger of closure. Microsoft now appears to be laser focused on AAA titles and sees no place for AA games in its portfolio. Ironically, games categorized under the latter are what have made its premium subscription service, Xbox Game Pass, a compelling offer.

Daniel Ahmed, Director of Research and Insights at Niko Partners, suggests that Game Pass growth has slowed down, and that Xbox is increasingly looking to take an IP-first approach to its consumer facing business. In other words, the company wants its games to be profitable as standalone titles. He mentioned that, previously, the console maker was looking at the subscription service as a way to offset development costs for its first party titles. However, it appears that is no longer the case, and it also helps explain the company’s recent exploration of releases on rival platforms.

The recent success of the Fallout TV series has led to a surge in the popularity of Fallout 4 and Fallout 76, and this appears to have made it clear to Microsoft that the real opportunity lies in capitalizing on such blockbuster IPs. During a recent episode of the Kinda Funny Gamescast, Fallout 3 and 4 director Todd Howard addressed questions about the possibility of releasing a Fallout 5 or a spinoff alongside the upcoming TV show. He explained that, at the time, the studio’s focus wasn’t on synchronizing releases with the show.

Responding to a query about co-development with some other Microsoft owned studio for a Fallout spinoff like Fallout: New Vegas, Howard stated that such discussions have occurred at Bethesda. While he couldn’t provide specifics, he suggested that there are two spinoffs currently in the works. Additionally, during a recent episode of The Xbox Two podcast, co-host Jez Corden claimed that Xbox aims to see a new Fallout game released sooner rather than later, possibly within the current decade, without having to wait for the release of The Elder Scrolls VI.

Looking ahead, in terms of standalone first party releases, Xbox has Avowed, Indiana Jones and the Great Circle, and Towerborne planned for release in the second half of 2024. This adds up to a total of four first party titles from the company this year, which is still less than the five studios that have been closed or granted independence.