Layoffs and the video game industry know one another quite well; in recent years, hardly a month or two seems to go by without word of a studio closure or mass layoffs making the rounds. It’s never pleasant to report on, but the talk around the industry right now is that new XBOX president Asha Sharma is allegedly ruminating some hard choices about culling the ranks of the myriad game studios under the company’s purveyance. A number of high profile companies are potentially on the chopping block, including Ninja Theory, Compulsion Games, and Double Fine.
These three studios are all alleged to be in talks with Microsoft to work out deals where they’ll separate from the company and go independent versus being shuttered outright. However, there’s no guarantee that this will happen. Things have been rough for XBOX over the past few years as the company has experimented with everything from putting its IPs on every platform under the sun to getting people to play XBOX games on everything from tablets and phones to smart TVs. The result, according to Sharma, has been a $500 million drop in revenue.
Sharma has made moves to return XBOX to relevance, including an all-caps rebrand, lowering the price of Game Pass, and more. However, with the multitude of studios under its wing, XBOX has no choice but to look at how profitable the games its studios make are. This GamesIndustry.biz article talks about South of Midnight being a BAFTA award nominee, and games like Psychonauts being award-winning titles, but high praise and high sales aren’t the same thing. Thus, Sharma is in the unenviable position of having to make studio closures despite whatever glowing commentary legacy media might have for a project, or how outspoken some might be on social media.
Money talks, and right now it’s saying that XBOX needs to make some serious changes. As we learn more, we’ll continue to update all of you.
Source: Bloomberg