This has been one of the lowest points in the history of the Xbox and gaming divisions at Microsoft. Earlier this week, it was revealed that the company decided to shut down three game development studios under its Bethesda-ZeniMax banner and merge another with ZeniMax Online Studios. As of this writing, Microsoft has not revealed how many employees lost their jobs.
In the first interview with a Microsoft Gaming executive since those shutdowns were reported, Xbox President Sarah Bond tried to justify those closings. She was interviewed by Bloomberg's Dina Bass on Thursday at the Bloomberg Tech Conference, and the chat was posted on YouTube.
Bond stated that sales in the game industry were flat in 2023, even though there were a number of quality games released in the past year. She added:
And when we look at those fundamental trends, we feel a deep responsibility to ensure that the games we make, the devices we build, the services that we offer are there through moments, even when the industry isn’t growing and you’re through a time of transition. And the news we announced earlier this week is an outcome of that, and our commitment to make sure that the business is healthy for the long term.
One of the studios that was shut down this week was Tango Gameworks. The Japan-based studio launched its sci-fi action game Hi-Fi Rush in early 2023. It became Microsoft's biggest hit of the year in terms of first-party games, and Microsoft indicated it was also a sales hit, saying it had three million players back in August 2023.
While not mentioning Tango Gameworks by name, Bass did ask Bond about the closing of that particular studio. Bass asked if that team should have had a more secure future due to the critical success of that game. Unfortunately, Bond did not offer any specifics on why Microsoft decided to close Tango Gameworks. She did state that "we look at a whole variety of factors when we’re faced with making decisions and trade-offs like that." She added:
But it all comes back to our long-term commitment to the games we create, the devices we build, the services, and ensuring that we’re setting ourselves up to be able to deliver on those promises.
Bond also confirmed in that interview that Microsoft will launch its unnamed mobile game store sometime in July as a web-based experience.
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