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As reported yesterday, Microsoft has closed four studios, including Tokyo-based Tango Gameworks, which released the critically acclaimed action game Hi-Fi Rush. Tango was in the process of releasing a sequel, Bloomberg sources said, asking not to be identified discussing non-public information.
The sudden closure of several studios in Microsoft’s Xbox division was the result of a widespread cost-cutting initiative that has not yet been completed. This week, Xbox began offering voluntary severance agreements to producers, quality assurance testers and other employees at ZeniMax, which was acquired in 2020 for $7.5 billion. Other members of the Xbox organization have been informed that more cuts are on the way.
During a meeting with the ZeniMax team on Wednesday morning, Xbox president Matt Booty praised the Hi-Fi Rushbut did not specify why the company closed the development studio behind it, according to three people present.
Speaking about the closures more broadly, Booty said the company’s studios were too spread out – like “peanut butter on bread” – and that leaders across the division felt understaffed. They decided to close those studios to free up resources elsewhere, he said.
Booty added that the closure of subsidiary Arkane Austin, a longtime developer of games such as Preywas not related to the performance of their new multiplayer game, Redfallwhich was a commercial and critical failure.
Before its closure, Arkane was looking to return to its roots by releasing a new single-player “immersive simulator” game, as a new Dishonoredaccording to people familiar with it.
Both Tango and Arkane released games last year and were looking to hire additional staff as they introduced new projects, which Booty and Braff suggested was the main factor behind their closures. Shinji Mikami, founder and head of Tango studio, left last year.
