Microsoft Xbox Announces Closure of Four Gaming Studios Over Disappointing Sales

By Thea Felicity

May 07, 2024 02:40 PM EDT

Vice President of Microsoft Game Studios, Phil Spencer
LOS ANGELES, CA - JUNE 10: Phil Spencer, vice president of Microsoft Game Studios at Microsoft Corp. speaks during Microsoft Xbox news conference at the Electronic Entertainment Expo at the Galen Center on June 10, 2013 in Los Angeles, California. Thousands are expected to attend the annual three-day convention to see the latest games and announcements from the gaming industry.
(Photo : Kevork Djansezian/Getty Images)

Microsoft's Xbox gaming division will take down four subsidiaries, including the popular game studio Arkane Austin. 

Bloomberg reported that this decision follows disappointing sales for Arkane Austin's latest game, Redfall, which Microsoft deemed a commercial failure. 

Xbox Game Studios head Matt Booty explained the rationale behind these closures in an email to employees, citing a strategic shift towards prioritizing high-impact titles and further investing in Bethesda's more popular portfolio of blockbuster games. 

However, Booty did not disclose the number of employees affected by these closures.

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Microsoft's Xbox's Gaming Divison Closure

Now, in addition to Arkane Austin, Xbox will close Alpha Dog Studios, Roundhouse Games, and Tango Gameworks. The latter is a Japanese studio known for acclaimed titles like Hi-Fi Rush. 

However, unlike others facing complete closure, Roundhouse Games will be integrated into ZeniMax Online Studios, the developer behind The Elder Scrolls Online.

Despite these changes, Booty reassured employees that Bethesda remains a key asset for Xbox. Promising titles such as a Starfield expansion and a new Indiana Jones game are slated for release later this year.

VCPost also noted that major upgrades will also be available for the next Xbox consoles besides new game releases.

READ MORE: Microsoft Executive Teases Major Upgrades For The Next Xbox Console

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