New reports have revealed that Tango Gameworks and Arkane Austin briefly pitched a sequel to Hi-Fi RUSH and a new Dishonored game before being shut down.
This information was published by Bloomberg. If you’re interested in Xbox games, you can check out our other articles here.
Tango Gameworks and Arkane Austin Planning Hi-Fi RUSH Sequel and New Dishonored Game?
The Verge claims that Arkane Lyon chief Dinga Bakaba‘s criticism of the closure of Tango Gameworks, Arkane Austin, Alpha Dog Games, along with Roundhouse Studios has reflected the increasing discontent and fear from Xbox employees about what comes next.
According to The Verge, Microsoft is having an internal debate to include the latest Call of Duty game in Game Pass. This debate has reportedly been going on for a long time with one of the main points being that Call of Duty ‘s profits could be ruined by Game Pass.
The Verge notes that Senua’s Saga: Hellblade II was planned for release on PS5. In addition, Microsoft is also again considering raising the price of Game Pass Ultimate.
The Verge continues that there are rumors among Xbox employees regarding the latest layoffs from Microsoft. On the other hand, Bloomberg confirmed the layoff rumors.
Bloomberg went on to claim that yesterday’s studio closures stemmed from a widespread cost-cutting initiative that is “still unfinished”. According to Bloomberg, parties at Xbox have been told that there will be more layoffs to be made by Microsoft.
On a separate note, Brad Sams claims that we can expect Microsoft layoffs to come in July 2024 when the company’s latest financial report is released.
In addition, Bloomberg reported that Tango Gameworks and Arkane Austin were working on a sequel pitch to Hi-Fi RUSH and a new Dishonored game before it closed.
ZeniMax Media studio head Jill Braff also said in an internal Xbox meeting that she hopes this new reorganization will allow her division to focus more on fewer projects.
“It’s hard to support nine studios around the world with a lean centralized team with a lot to do,” Braff said. “I think we’re going down.”
Speaking about the closures more broadly, the president of games and content at Microsoft Gaming, Matt Booty, said that Xbox studios had been spread too thin like “peanut butter on bread” and leaders across the division felt under-resourced. They decided to close these studios to free up resources elsewhere.
Booty noted that Arkane Austin’s closure had nothing to do with their failure in Redfall. Unfortunately, Booty did not provide a reason why Tango Gameworks was shut down.
According to Booty and Braff, both Tango Gameworks and Arkane Austin had released games in 2023 and wanted to hire additional employees as they pitched new projects. This was a factor in the closure of both studios.
Bloomberg notes that Activision Blizzard’s acquisition has increased scrutiny of the Xbox division from leaders at Microsoft.
“We Need Smaller Games” and Tango Gameworks’ Response
After Microsoft announced that it will close four Xbox studios, Matt Booty also discussed the future goals of the Xbox division.
“We need small games that give praise and rewards,” Booty told his employees as written by The Verge.
Booty’s comments are very surprising: Microsoft has just shut down Tango Gameworks, which just released Hi-Fi RUSH. The game was also Microsoft’s commitment to bring exclusive Japanese games to Xbox.
In September 2023, Microsoft Gaming CEO, Phil Spencer, told Game Watch that players can “expect” to see more AAA games from Japan and praised Hi-Fi RUSH for its “high quality”.
With Hi-Fi RUSH, Tango Gameworks gave Matt Booty exactly what he wanted: a unique, creative, critically acclaimed and award-winning little game.
Booty’s comments could be interpreted to mean that Xbox leaders are unable to recognize games that are classified as “little games that give praise and rewards”.
The creative director of Hi-Fi RUSH, John Johanas, only provided a photo of one of the characters in the game, Peppermint, who looked incredulous at Booty’s comments.
Here are some comments from former Tango Gameworks employees:
Sarah Bond’s response to the closure of Tango Gameworks and Arkane Austin
Speaking with journalist at Bloomberg, Dina Bass, Sarah Bond has said that although by 2023 there will be many games released, the growth of the gaming industry is still flat and the price of AAA games continues to rise.
Bond was then asked how consumers should understand the decision to close the Xbox studio in relation to the commitment to developing exclusive games.
When we look at those fundamental [industry] trends, we feel a great responsibility to ensure that the games we make, the devices we make, the services we offer will always be there in times when the industry is not growing and when you are going through a transition.
The news we announced earlier this week is a result of that and our commitment to ensuring that the business is healthy for the long term.
Sarah Bond, President of Xbox
Bond added that Microsoft is still committed to having its own studio and working with partners to deliver games big and small.
According to Bond, Microsoft is currently focusing on assisting people affected by the studio closure and helping them through a “difficult transition period”.
Bond was also asked if studios like Tango Gameworks releasing exciting projects like Hi-Fi RUSH is not a guarantee of the studio’s future.
One of the things I love most about the gaming industry is that it’s a creative art form. This means that the situation and success for each game and studio is also very unique, like there is no one size fits all.
We look at every studio, every game team, and we look at all sorts of factors when we’re faced with making decisions, and trade-offs like that… but it all comes back to our long-term commitment to games.
Sarah Bond, President of Xbox
Game Pass Growth Stagnating?
In recent years, Microsoft has invested heavily in Game Pass, an Xbox subscription service that offers unlimited access to hundreds of downloadable games for a monthly fee.
To populate the service, Microsoft acquired dozens of studios, including studios known for making smaller games. However, the service has not experienced significant growth as Phil Spencer had hoped.
Executive director at Circana, Mat Piscatella, revealed to Bloomberg that monthly and non-mobile game subscription spending in the United States “has been growing flat to low single digits” since mid-2021.
“In our data, Game Pass spending really had a big growth period in late 2019 to early 2021 and has since stabilized,” Piscatella said.
“Buying games and additional content and the free-to-play model are still the overwhelmingly preferred methods of acquiring video games by US consumers, at least for now.”
Interestingly, the founder of GameDiscoverCo, Simon Carless, also noted that the growth of Game Pass looks stagnant every year if you don’t count Game Pass Core.
If you look at the Xbox leaders’ target of 110 million Game Pass subscribers by 2030, that number may now be considered “excessive”.
“Could it be that Xbox even ‘tricked’ themselves and the core demographic of Game Pass all along was ‘core Xbox fans who already had Gold and are now spending 2x to 3x the monthly cost for Game Pass in full’?” Carless wrote in his newsletter.
Carless gave the example of how all the Xbox games included in Game Pass means it will be difficult to determine success metrics for those games:
- Have many people tried this game?
- Do many people rate this game highly in reviews?
- Are many people sticking around in this game and maybe paying for extra things in it?
- Are many new people signing up for Game Pass because of this game?
“As Game Pass growth has slowed in terms of total subscriptions, I think the focus has increasingly shifted from the first two metrics to the second two metrics. That’s a very different lens,” Carless added.
Perhaps what a former Xbox employee told IGN opens up the perspective that the Xbox that many people know is not the Xbox of today:
I had a long discussion with the founders of Xbox and we all came to the same conclusion: it’s no longer Xbox, but Microsoft Gaming.
Too much surface area. Effectively, there were three major companies involved and Microsoft never really finalized the integration with Bethesda. Activision is like three times the size of Xbox.
Xbox 360 launched with a few hundred people. Last I heard Xbox is now almost 30,000 people.
The reason why this seems so inconsistent with the Xbox leadership team’s previous statements is because this decision may not have been made by Phil. This was all dictated by [Microsoft CEO] Satya [Nadella] and [Microsoft CFO] Amy Hood, and it all started with the acquisition of Activision Blizzard.
The situation Xbox faced when they made this decision was much different. [They] couldn’t keep consoles in stock, monetize the growth of Game Pass – [the Activision acquisition] seemed like a no-brainer.
Now, console sales are down. Post-COVID recession. Game Pass is slowing down. The acquisition was more expensive and took longer than expected. The focus on fighting the FTC may have cost them time they could have spent thinking about the implications on their employees and studios.
I’m 100% sure this was a board-level decision. Xbox was a huge profit center, so Satya approved a massive acquisition. Now, game sales are slowing down, Microsoft stock is skyrocketing, and there’s no way Satya will let Xbox drag him down.
This is all my opinion, of course, but… I’m pretty sure this wasn’t a decision made solely by Xbox leadership.
IGN’s Source
