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Microsoft is axing four game studios, including Arkane Austin and Tango Gameworks, reportedly so it can focus on "high-impact titles."
Arkane Austin and Tango Gameworks confirmed the shutdowns in posts on Twitter/X. Arkane Austin was perhaps best known for developing Redfall, a vampire-hunting online shooter that faced numerous negative reviews when it launched last year.
Tango Gameworks is behind Hi-Fi Rush, a well-received adventure title, along with the horror survival series The Evil Within and action title Ghostwire: Tokyo. Microsoft acquired the studios after buying ZeniMax Media, the parent of Bethesda Game Studios, in 2020 for $7.5 billion.
IGN reports that Xbox Game Studios head Matt Booty sent an email to staff, explaining that the cuts are "grounded in prioritizing high-impact titles and further investing in Bethesda’s portfolio of blockbuster games." Booty also noted that Microsoft is shutting down Alpha Dog Studios and Roundhouse Games.
"To double down on these franchises and invest to build new ones requires us to look across the business to identify the opportunities that are best positioned for success," he wrote. "This reprioritization of titles and resources means a few teams will be realigned to others and that some of our colleagues will be leaving us."
The shutdown of Arkane Austin means that some of its members will migrate to other Microsoft-owned studios. Booty also said "Redfall’s previous update will be its last as we end all development on the game. The game and its servers will remain online for players to enjoy and we will provide make-good offers to players who purchased the Hero DLC," which was never released.
But in other cases, it looks like Microsoft is laying off video game developers. "We will provide our full support to those who are impacted in today’s notifications and through their transitions, including severance benefits informed by local laws," Booty added.
Microsoft is making the changes as Xbox sales struggle, with some estimates projecting that Sony’s PlayStation 5 has been outselling the console by a 3-to-1 margin. In January, Microsoft also laid off another 1,900 gaming jobs citing the need to create a “sustainable cost structure” for its gaming business.