Microsoft plans to make more cuts to Xbox, and the situation is really worrying many other studios. This is the harsh reality that hides inside Xbox

Many players expected this to continue happening after the sudden and unexpected closure of Xbox studios. Tango Gameworks, Arkane Austin They have been the two teams that will not release any video game again. This surprising movement shows us that the crisis in the video game industry is worse than we thought, but really everything can go further and be much more serious for one of the most important companies in the sector and that has invested the most to establish a successful future, Xbox.

Bloomberg has released a lot of exclusive information about what Microsoft plans to do in its video game division. It turns out that the company’s intention is to make more cutsIt even slips that Xbox has started offering voluntary redundancy agreements to producers, quality control employees and numerous members of the ZeniMax staff. In fact, many employees are aware that more cuts at Xbox are on the way, increasing fear and uncertainty.

The hidden reality of Xbox

• Hellblade 2 has been internally considered for release on PS5.
• Tango Gameworks was working on a sequel to Hi-Fi Rush that will never be released.
• Arkane Austin wanted to do it again a new immersive-sim for single player, Similar to Dishonoredbut it will never come to light.
• These layoffs and closures will allow focus on fewer games.
• “I think we were about to collapse,” said Zenimax’s director of studies.
• The purchase of Activision Blizzard has caused Microsoft to monitor the Xbox division more closely.
• Xbox Game Pass is not getting the expected growth by Phil Spencer.
• Xbox Game Pass’ big bets haven’t paid off.
• Within Xbox there is a lot of uncertainty about what the future holds
• Even though Phil Spencer said yes, Microsoft has been internally debating whether include or not the call of duty games in Xbox Game Pass.
• Microsoft has considered increase the price of Game Pass Ultimate again
• The business of Xbox does not grow if it is not for Activision Blizzard
• 2024 will be key for all Xbox studios

Matt Booty, head of Xbox Game Studiospraised Hi-Fi Rush in a meeting but He did not explain why Tango Gameworks closed. Furthermore, he commented that the Xbox studios had been spread like “peanut butter on bread,” and that they had felt understaffed. These three studios closed to free up resources and focus them on other teams and more important games within Bethesda. Furthermore, it must be clarified that Arkane Austin has not closed because of Redfallwhose title has generated “minimal sales” and which will not release any more updates.

“Is difficult to maintain nine studios spread around the world with a small core team and an increasing number of things to do,” said Jill Braff, head of studios at Zenimax. In fact, one of the reasons these beloved studios have been closed is because They were looking to hire developers for new games, something that Booty and Braff have pointed out in a private meeting.

Beyond the Bethesda and Activision purchases, Microsoft also recently announced more than 1,900 layoffs at Activision Blizzard. The significant growth that the company had during the pandemic has now become a severe setback for practically many developers, especially for Xbox. Nobody expected in 2022 that two years later the company would lay off thousands of employees and close beloved studios for the community.

Game Pass is a service that Microsoft has bet too much on by including all the own launch gamesand the media mentioned above reports that the subscription has not experienced the massive growth that Phil Spencer expected. In fact, a few hours ago we informed you that PS Plus, Xbox Game Pass and other services are not growing, and have been stagnant for several years since spending on subscriptions has barely increased in the largest market in the world, the United States.

Mat Piscatella, Circana analyst reports that “the expense in Game Pass really had its big growth period in late 2019 to early 2021 and since then has stabilized“. However, “the purchase of additional games and content, as well as free-to-play models, continue to be the widely preferred method for American consumers to access video games.” Although it is evident, Microsoft does not plan to abandon the Game Pass model despite these difficulties.

A few weeks ago we published that Xbox was enjoying record revenue thanks to what Activision Blizzard brings. The worrying thing is that the Xbox Series X|S sales fell 31% compared to the same quarter last year and that, if we discount the income of Activision Blizzard, the division of Xbox would have decreased revenue by 4% on an interannual basis.

On the other hand, The Verge has provided important information about the Xbox situation. After the director of Arkane harshly criticized Xbox after the closure of its sister studio, some sources comment that these harsh statements show the internal reality of many developers: discontent and fear about what’s to come on Xbox. As expected, many workers were surprised after the closure of Tango Gameworks, they did not expect it.

The Verge reports that Xbox is currently fighting a slowdown in Game Pass subscribers (since last February it is known that there are 34 million), very improvable sales of Xbox Series X|S and continuous internal delays in the launches of the games. Xbox is currently in the middle of a change of strategy with its own games, four have been released on other platforms: Hi-Fi Rush, Pentiment, Grounded and Sea of ​​Thieves. The latter is reported to be selling very well on PS5, although it would not be ruled out that Hellblade 2 ends up debuting on Sony’s console sooner or later.

One of the keys that is debating within Microsoft Its the include Call of Duty games in Xbox Game Passsince there are internal debates about whether the income from the Activision shooter saga are cannibalized by the subscription service. On the other hand, it seems that Bethesda will focus on a few licenses that aim to be successful: “These changes are based on prioritize high impact titles and continue investing in Bethesda’s portfolio of successful games“Matt Booty said.

At the moment Xbox is in a situation of uncertainty, but Microsoft is said to be confident that upcoming announcements, especially the summer event, where a new Gears and the next Call of Duty will be unveiled, will increase community anticipation. They also say that the internal sensation is that It is not clear what direction the company will take Regarding launching their own games on other platforms, what does seem to be a reality is that debates are taking place around it. The future is uncertain, and what happens in the short term will be key for many studies.

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