Xbox staff not out of the woods yet as more cost-cutting could be around the corner

Despite the closures of three Microsoft-owned games studios this week, there’s no time for the remaining staff to collect themselves as Microsoft has begun to offer voluntary redundancies to ZeniMax staff.

According to a report in Bloomberg, producers, quality assurance testers, and other staff at ZeniMax, Bethesda’s parent company, have been offered voluntary redundancy, with other cost-cutting measures still to come.

An email seen by IGN showed some additional reasoning behind the closures. In it, Xbox president Matt Booty said that the closures were to consolidate resources and to “prioritize high-impact titles. […] 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.”

In a town hall meeting that Bloomberg acquired a recording of, studios were being spread too thin like “peanut butter on bread”, and there was a feeling of being understaffed by leaders across the division. This sentiment was echoed by Jill Braff, head of ZeniMax, who said “It’s hard to support nine studios all across the world with a lean central team with an ever-growing plate of things to do. I think we were about to topple over.”

In a confusing comment, Booty said “We need smaller games that give us prestige and awards,” according to The Verge. However, saying that just a day after closing Tango Gameworks, the studio behind Hi-Fi Rush, may sound disingenuous to some. Hi-Fi Rush was both commercially and critically successful, hitting over three million players and bringing home multiple awards. It was recently launched on the PlayStation 5, and Tango Gameworks was in the process of pitching a sequel.

John Johanas, director of Hi-Fi Rush and Creative Director of Tango Gameworks, in response on X to Booty’s statement, simply posted a picture of Peppermint from Hi-Fi Rush looking nonplussed.

https://t.co/Cz2fW01QVc pic.twitter.com/ADV4ZTpIuP

— johnjohanas (@johnjohanas) May 9, 2024

There is further turmoil and debate at Microsoft over the future of Xbox Game Pass, particularly about pricing. Bloomberg’s report highlights the stagnation of Game Pass growth since 2021. Sources told The Verge that Microsoft is considering raising the price of Game Pass Ultimate. There is also debate raging over whether Call of Duty, developed by Activision, would come to Game Pass – there are some fears that doing this would reduce the profitability of Call of Duty.

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