News from the lovely world of the Games Industry.

[Syt]

https://www.pcgamer.com/gaming-industry/microsoft-announces-4-studio-closuresincluding-arkane-austin-and-tango-gameworks-creators-of-prey-and-hi-fi-rush-respectively/

Microsoft announces 4 studio closures—including Arkane Austin and Tango Gameworks, creators of Prey and Hi-Fi Rush respectively

Microsoft's Xbox division has announced a rash of studio closures as part of an effort to prioritise "high-impact titles" according to multiple sources, including IGN and Bloomberg. Included in the four announced studio closures are Arkane Austin, Tango Gameworks, Alpha Dog Games, and Roundhouse Games.

Arkane as a whole has been responsible for several excellent games over the years—such as Dishonoured, Prey, and Deathloop. Arkane Austin's most recent effort, Redfall, was far less well-received. Arkane Lyon will survive Arkane Austin's closure to work on its adaptation of Marvel's Blade.

Tango Gameworks, meanwhile, developed The Evil Within games and Hi-Fi Rush—as well as Ghostwire: Tokyo. Both will be joining Alpha Dog Games and Roundhouse Games (formerly Human Head Studios) in the round of closures.

As per a letter sent to IGN by Matt Booty, head of Xbox Game Studios, the decision was made out of a desire to funnel more resources into "high-impact" titles, including Bethesda's games.

"Today I'm sharing changes we are making to our Bethesda and ZeniMax teams," Booty writes. "These changes are grounded in prioritising high-impact titles and further investing in Bethesda's portfolio of blockbuster games and beloved worlds which you have nurtured over many decades.

"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. 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."

Arkane Austin will see some, but not all, of its members moving to work on other projects under the Bethesda banner—likewise, Roundhouse Game will also be merged with ZeniMax Online Studios. Otherwise, it's shut doors all 'round.

Developers have already taken to Twitter, both to express their frustration at the sudden news—and to offer sympathy for those impacted. "This is absolutely terrible," writes Dinga Bakaba, co-creative director at Arkane Lyon. They implore those in charge to avoid the kind of cutthroat behaviours that led them here in a further thread:

"Don't throw us into gold fever gambits, don't use us as strawmen for miscalculations/blind spots, don't make our work environments darwinist jungles. You say we make you proud when we make a good game. Make us proud when times are tough. We know you can, we've seen it before ... For now, great teams are sunsetting before our eyes again, and it's a fucking gut stab."

This news comes as a further pile-on to the crushing waves of layoffs that rocked 2023 and are, unfortunately, continuing into 2024.

It's a sting in two parts—Arkane has historically had a great pedigree of titles, while Tango's work on Hi-Fi Rush was extremely promising. Plenty of infuriated fans of the latter have already brought up this tweet from almost a year ago by Xbox's Aaron Greenberg, who called Hi-Fi Rush: "a break out hit for us and our players in all key measurements and expectations".

However, Arkane's Redfall was a major embarrassment for both the studio and Microsoft in general, and while Hi-Fi Rush is an exceptional, extremely popular videogame (it was my personal pick last year, after all) Ghostwire: Tokyo didn't quite set the world on fire. As such, Microsoft's mission statement here could be read as bracing for Starfield's short tail by scuppering—and the air quotes hang heavy here—'underperformers'.

Starfield sold well, of course it did, but it had nowhere near the continued interest as some of Bethesda's other mainline RPGs. As our online editor Fraser Brown pointed out last week, the modding community isn't as ravenous, and while Starfield was nominated for a lot of awards, it didn't win many. I'm not sure Bethesda can afford for its next project to stumble in the same way.

Microsoft itself also spent $68.7 billion on Activision Blizzard recently, which firmly plays into the persisting, Embracer-style story of large companies snatching up a bunch of studios, only for the house of cards to crumple later at the cost of said studios and their cancelled games.

Ultimately, these closures are a grim reminder of the sudden collapses that accompany a AAA industry dominated by large-scale acquisitions and gung-ho business decisions. It's a pattern plenty of developers have picked up on, and they're reasonably unhappy about a titanic industry that, somehow, completely fails to remain stable.

Is there any other industry (esp. outside entertainment) that sees (fairly well known) companies constantly rise and fall like the gaming industry?

[Syt]

https://www.pcgamer.com/gaming-industry/making-good-profitable-games-will-no-longer-keep-you-safe-games-industry-expresses-fury-and-heartbreak-over-closure-of-hi-fi-rush-and-prey-studios/

Making good, profitable games 'will no longer keep you safe': industry expresses fury and heartbreak over closure of Hi-Fi Rush and Prey studios

Gamers and game developers are reeling from yet another wave of layoffs and studio closures.

After laying off thousands of employees over the past couple years, games industry executives appear to be adopting a more efficient method of what they euphemistically call "reprioritization": closing entire studios. Take-Two axed two studios just last week, and now Microsoft has bulldozed four more, including Arkane Austin and Tango Gameworks, which it acquired when it bought Bethesda in 2021.

The dissolution of these talented, well-respected teams has reinforced the feeling among gamers and developers that nothing is good enough to earn security under big publishers today. In one popular tweet, indie developer Maisie Ó Dorchaidhe listed 11 things "that will no longer keep you safe in this industry," including "a good game," "a profitable game," and "long hours and sacrifice."



Indeed, Tango Gameworks' Hi-Fi Rush was deemed by Microsoft to be a "break out hit" in "all key measurements and expectations" last year. And in his email to staff today (acquired by IGN), Xbox Game Studios head Matt Booty said that the studio closures "are not a reflection of the creativity and skill of the talented individuals at these teams or the risks they took to try new things." Rather, Microsoft is "prioritizing high-impact titles."

The message being heard is that you can do everything right, but still be deemed 'low-impact' at any point by the suits upstairs, and then it's curtains. In the wake of the announcement, fans and developers have expressed fury, heartbreak, and unease, especially over the future of other Microsoft-owned studios, which include Obsidian, inXile, Double Fine, and Ninja Theory.

"Extremely cool and not devastating at all how even studios and devs who make award winning or best selling games aren't safe from ✨restructuring✨ and ✨divesting resources elsewhere✨," wrote Firaxis writer Emma Kidwell.

"I don't understand the closure of Tango Gameworks," wrote Helldivers 2 studio CEO Johan Pilestedt. "I mean... Why close instead of divest [sell]? Surely the team would easily have been able to find a new home."

"I cannot imagine hearing you're being let go because of prioritisation of *another developer* is especially good for morale," said Larian publishing director Michael Douse, "especially if you're in another regional office of a shuttered sister office 🤦�♂️- imaging reading that and working in Obsidian, or something. Wild."

[Valmy]

As it turns out Electronic Arts was just ahead of its time.

[The Minsky Moment]

I rather liked Ghostwire, although didn't put a lot of time into it . . .

From a business perspective, there is a logic here, similar to what drives Hollywood to focus on superhero and comic IP vehicles  - if a smaller studio has a bust it's basically years of operations that go up in smoke; so better stick to big franchises that may have high costs but bring reliable income flows.

Except that logic doesn't hold up under scrutiny for MSFT because gamepass is its tentpole distribution platform.  And to make gamepass attractive and really work, you need depth as well as top end attractions.  And the whole point of being MSFT is that you can build up a diversified portfolio of smaller developers such that if one turns out a flop, it doesn't matter, because another will have a surprise hit. 

My 2c Bad move that undermines the overall strategy.

[Jacob]

I guess maybe they expect publishers and indie studios will create enough product to provide sufficient depth, taking on the risk of flops?

[The Minsky Moment]

I guess maybe they expect publishers and indie studios will create enough product to provide sufficient depth, taking on the risk of flops?

Yes but Microsoft itself is uniquely positioned to assume that risk itself, because it can diversify across a portfolio of studios and it has no shortage of capital reserves.  Seemed like that was their strategy, but then why panic and purge just because two strong developers had disappointments?

It's also a matter of perspective as in what is the real asset?  Is it monetizable IP or is it the not easily replicable talent and skills of development teams.  If there was any doubt how the suits at MSFT saw things, those are now definitely resolved. Hi Fi Rush may have been a success but it isn't going to spin off a franchise like Elder Scrolls or Call of Duty

[Grey Fox]

I think it's because there is still discordant views on what the strategy for Xbox needs to be. There is the strategy that Minsky has layed out and there's, what I would call, the Surface strategy and that one requires Hardware to be sold. A lot of hardware.

Attractive MCU like IPs is what sell consoles, not Hi Fi Rush.

[viper37]

Is there any other industry (esp. outside entertainment) that sees (fairly well known) companies constantly rise and fall like the gaming industry?

About anything in the tech sector, really.

Intel, AMD for their various segments come to mind.

[viper37]

I guess maybe they expect publishers and indie studios will create enough product to provide sufficient depth, taking on the risk of flops?

Yes but Microsoft itself is uniquely positioned to assume that risk itself, because it can diversify across a portfolio of studios and it has no shortage of capital reserves.  Seemed like that was their strategy, but then why panic and purge just because two strong developers had disappointments?

It's also a matter of perspective as in what is the real asset?  Is it monetizable IP or is it the not easily replicable talent and skills of development teams.  If there was any doubt how the suits at MSFT saw things, those are now definitely resolved. Hi Fi Rush may have been a success but it isn't going to spin off a franchise like Elder Scrolls or Call of Duty

Microsoft Games may not be a priority anymore. 

They remastered the Age of Empire series which is kinda of a niche project compared to any Bethesda games.  Even people here don't know the references to AoE III


I can't see MS doing anything comparable today.  All the rage is on AI.  They are investing a fuckton of money in AMD to develop their AI products/solutions, this is where the gold is.  Gaming is on the backrunner again.

Just like your last paragraph, they're going for the monetizable IPs like Elder Scrolls.  A MMO like ESO must not cost a lot to make compared to what it will bring.  And Bethesda want to get TES VI out sometime before 2030.  The fact that Starfield was a gaming flop probably accelerated their shift toward this game and they need resources.  Rather than hire new people, they are reassigning existing resources.

MS no longer has the patience for long paying niche projects, they want their money now.

This is what happens when gaming studios become too big. It's just like EA.  They had a gold mine with Mass Effect and Dragon Age by acquiring Bioware, they turned it to shit with Andromeda and DA2, then DA3 came out, not certain if it was a MMO or a long RPG with action sequences.

New studios are popping up.  We'll have to wait 4-5 years for the cycle of good games to start again.  Homeworld 3, Exodus, some promising gems like that.

[viper37]

"Extremely cool and not devastating at all how even studios and devs who make award winning or best selling games aren't safe from ✨restructuring✨ and ✨divesting resources elsewhere✨," wrote Firaxis writer Emma Kidwell.

Always has been...

Bungie, the studio that made Dungeon Keeper 1 & 2.  Huge hits at the time, classics.

They were acquired by EA, their publisher, and they were making DK 3. Shut down, resources reallocated elsewhere.

The studio that made Betrayal at Krondor?  Made one bad game, Betrayal in Antara.  They were acquired by CUC, then CUC was caught in its own mess and Sierra was gone.  It's part of Microsoft now, but only in name.

Silicon Knights who lost their suit against Epic Games for the Unreal Engine.

Ensemble Studios, bought by Microsoft in 2001, shut down in 2009 when MS exited gaming for PC (they came back later).

Pandemic, bought by EA, shut down a few years later.

[Valmy]

As I said: EA was clearly a trend setter

[viper37]

As I said: EA was clearly a trend setter

I clearly missed your message.  Sorry.

My hatred of EA has blinded me to every post about them.

[Jacob]

Some mixed signals:

Today, one day after Microsoft announced that it would shut down four of its games studios, Matt Booty, head of Xbox Game Studios, held a town hall to discuss the division's future goals. "We need smaller games that give us prestige and awards," Booty told employees, according to internal remarks shared with The Verge.

For some listeners on the call, it was a surprising goal: Microsoft had just shut down the Japanese developer Tango Gameworks, which was coming off the small, prestigious hit title Hi-Fi Rush.

Hi-Fi Rush, which was a surprise release last year, was praised for its innovation and charm. The rhythm action game featured music by The Black Keys and Nine Inch Nails, with an art style that evoked the hyper-stylized games of the PS2 era. Just four months after its release, Hi-Fi Rush hit 3 million players. During the 2023–2024 awards season, the game went on to win a Game Award, a Game Developers Choice award, and a BAFTA.

While Microsoft hasn't shared sales data, it was apparently happy with the game. When rumors swirled that it wasn't doing well commercially, Aaron Greenberg, vice president of Xbox games marketing, wrote on X that Hi-Fi Rush "was a break out hit for us and our players in all key measurements and expectations."

By all accounts, including Microsoft's own, Tango Gameworks made a hit and something wholly unlike anything it's made before. Before Hi-Fi Rush, Tango Gameworks was known exclusively for its survival horror games, including The Evil Within series and Ghostwire: Tokyo. In an interview with Kinda Funny Games, Xbox head Phil Spencer spoke about how important it was for Xbox to allow studios to make games outside their comfort zones.

"I want to give the teams the creative platform to go and push their ability, push their aspirations," Spencer said.

Hi-Fi Rush also represented Microsoft's commitment to bringing Japanese exclusives to the console. In an interview with Game Watch, a Japanese video game media outlet, Spencer praised Hi-Fi Rush for its "high quality" and said that players could "expect" to see more AAA titles from Japan, evoking the days when Lost Odyssey and Blue Dragon were both exclusives on the Xbox 360. "While there are titles we can't announce yet," Spencer said in the September 2023 interview, translated by VGC, "we are currently developing new games in collaboration with Japanese companies." It's worth wondering if that's still the plan now that Tango is shut down.

Right now, small single-player games like Hi-Fi Rush are having a huge moment. Balatro, a poker roguelike made by a single developer, sold over 1 million copies in its first month. Manor Lords, another solo-dev project in early access on Steam, has also sold over 1 million copies. Hades 2 just released in early access and doubled its predecessor's all-time peak player count on Steam in a single day. Even the original Hades is climbing back up the Steam charts, breaking its all-time peak player count record just today almost four years after its initial release.

While we don't know exactly what sales goals Microsoft had for Hi-Fi Rush, clearly there is a demonstrated appetite for this kind of game, with Tango Gameworks positioned perfectly to deliver it. In fact, according to a report from Bloomberg, Tango Gameworks was in the process of pitching a sequel to Hi-Fi Rush before it got shut down.

With Hi-Fi Rush, Tango Gameworks gave Microsoft just what Booty says he wants: a small, creatively unique, highly praised, award-winning game. Booty's comments, then, suggest that Xbox's leaders couldn't recognize what they had on their hands — or simply didn't know how to take advantage of the success they were seeking out.

We reached out to Microsoft for comment.

https://www.theverge.com/2024/5/8/24152137/xbox-hi-fi-rush-tango-gameworks-matt-booty

[Sheilbh]

Is there any other industry (esp. outside entertainment) that sees (fairly well known) companies constantly rise and fall like the gaming industry?

Don't know how much it's outside entertainment, but I'd argue media (especially online).

[Tonitrus]

Seems like a really bad idea for any up-and-coming studio to make a deal to b acquired by a major publisher...but also seems those same publishers act as giant gatekeepers?

There oughta be a law...