The recent news of Microsoft’s decision to shutter Hi-Fi Rush studio Tango and Prey’s Arkane Austin has sent shockwaves throughout the gaming industry. These closures are part of a larger cost-cutting initiative that is still ongoing, painting a bleak picture for the future of ZeniMax studios. The move to offer voluntary severance to producers, quality assurance testers, and other staff at ZeniMax indicates that more cuts may be on the horizon.
During a meeting with ZeniMax staff, Xbox president Matt Booty likened the company’s situation to spreading “peanut butter on bread,” emphasizing the need to streamline operations. The recent closures of Tango, Arkane Austin, Mighty Dog, and Roundhouse were attributed to the desire to free up resources and avoid spreading the company too thin. Jill Braff, head of ZeniMax, expressed concerns about the organization’s ability to support its nine studios worldwide with a lean central team.
The closure of Arkane Austin comes at a critical time when the studio was deep in the development of new content for its vampire live service Redfall. Additionally, the team was exploring the possibility of creating a new immersive sim, potentially a new installment in the Dishonored franchise. Xbox had previously lauded Hi-Fi Rush as one of the most successful launches for Bethesda and Xbox in recent years, adding to the disappointment surrounding its closure.
The cost-cutting measures at Xbox have raised concerns about the company’s reliance on the Game Pass subscription service for revenue growth. Analysts have noted that while Game Pass saw significant growth from late 2019 to early 2021, the momentum has since plateaued. US consumers still prefer purchasing games and add-on content or engaging with free-to-play models, signaling a potential shift in gaming consumption habits.
Risk-Aversion and Creative Freedom
The Game Pass model was initially lauded for its potential to support smaller, more creatively risky games that might not meet traditional sales expectations. However, with Game Pass growth stagnant, Xbox appears to be less willing to take risks on similar projects. This shift in strategy raises concerns about the future of innovative and experimental game development within the Xbox ecosystem.
The recent studio closures and cost-cutting measures have left many in the gaming industry feeling uncertain about the future. The fallout from these decisions is yet to be fully realized, with implications for both the affected studios and the broader gaming landscape. As the industry continues to evolve, the repercussions of these cuts may reverberate for years to come.
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