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.

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