When the 1,900 layoffs were announced last January, the focus was mainly on “duplicated” jobs resulting from the acquisition of Activision Blizzard. Yesterday, the ax fell more particularly on the ZeniMax organization, eliminating four studios from the Bethesda family. So far, the Xbox Game Studios were therefore spared, but it is legitimate to wonder whether this immunity will last for a long time. For journalist Jason Schreier, Microsoft has clearly not finished cutting positions within its organization. In addition to offering voluntary severance deals to producers, quality assurance testers, and other ZeniMax staff, Microsoft plans to expand its cost-cutting program. Logic would dictate that Xbox Game Studios would be the next victims of this plan, a theory that journalist Tom Warren supports at the same time in his article for The Verge. Microsoft hasn't closed an Xbox studio since Lionhead Studios in 2016.
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Nadella expects results
According to Jason Schreier, Microsoft did not choose to shut down Arkane Austin and Tango Gameworks due to the commercial performance of Redfall and Hi-Fi Rush. A more important factor would be that these two studios delivered their last game recently and would therefore not have been able to release another one for a long time, not without going through a recruitment phase. For the record, Arkane Austin had proposed returning to its roots by making an immersive simulation type game (potentially Dishonored 3), while Tango Gameworks was up for making a sequel to Hi-Fi Rush.
Regarding closures in general, Matt Booty, the head of the studios who takes care of the dirty work in place of a very discreet Phil Spencer these days, declared yesterday in a meeting with ZeniMax employees that the studios of society have been too dispersed – like ” peanut butter on bread » – and that the division's leaders felt understaffed. So they decided to close those studios to free up resources elsewhere, he said. Layoffs seem to be a very strange solution to compensate for the lack of personnel, but we will understand that Microsoft has identified priority studios and licenses and that those of Arkane Austin and Tango Gameworks are not among them.
Where Microsoft's vision becomes blurry is when Matt Booty explain immediately: “ We need smaller games that give us prestige and rewards », a definition which corresponds in every way to a game like Hi-Fi Rush, whose director John Johanas struggles to conceal his consternation.
During the same meeting, Jill Braff, director of ZeniMax Studios, explained that the reorganization of ZeniMax would allow it to focus more on fewer projects. “ It's difficult to support nine studios around the world with a small core team and an ever-growing to-do list she said, according to the meeting recording obtained by Bloomberg. The Elder Scrolls, Fallout, Starfield and Doom are ZeniMax's main licenses.
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“ Activision Blizzard's massive acquisition has increased Microsoft executives' scrutiny of the Xbox division », According to Bloomberg sources. As a reminder, Microsoft spent the crazy sum of $83.5 billion to take over Bethesda and Activision Blizzard. As we saw in the last financial report, the reinforcement of Activision Blizzard made it possible to establish a record turnover but also generated an operational loss of 736 million euros since the start of its integration in October last, which means that the various costs incurred and operating expenses are currently higher than what Activision Blizzard reports.
Call of Duty and Game Pass, not so obvious?
The closure of these studios and other stunning decisions such as releasing Hi-Fi Rush, Sea of Thieves, Grounded and Pentiment on competing consoles, are consistent with a change in strategy following the insufficient growth of the Game Pass. “ In our data, Game Pass spending really saw its big growth period in late 2019 through early 2021 and has since stabilized », Confided Mat Piscatella of Circana. “ Purchasing games and add-on content as well as free-to-play models remain the largely preferred method for U.S. consumers to access video games, at least for now. »
Tom Warren adds fuel to the fire: according to his sources, Microsoft is still debating whether or not to include Call of Duty games in the Game Pass subscription. Some internally fear that Microsoft will have more to lose than to gain, in other words that Call of Duty brings in less money than usual, if the franchise goes the way of Game Pass. One might have thought that this kind of fundamental decision had been carefully considered ahead of the interminable legal and administrative battle that Microsoft waged to take over Activision Blizzard, but that was perhaps overestimating the big minds at Redmond . . “ I'm told Microsoft has also considered raising the price of Game Pass Ultimate again », adds The Verge.
According to Tom Warren, who tease Gears and Doom announcements for the big showase on June 9, Microsoft plans to release the Starfield Shattered Space expansion in September, the next Call of Duty at the end of October, Avowed and Microsoft Flight Simulator 2024 in November and Indiana Jones and the Ancient Circle in December. Expected on May 21, Senua's Saga: Hellblade 2 would be one of the many titles that Microsoft plans to release on PlayStation 5.
- Also read | Microsoft closes Arkane Austin, Tango Gameworks, Alpha Dog Games and Roundhouse Studios