On Tuesday, Jason Schreier of Bloomberg broke the news that Xbox is shutting down Tango Gameworks (Hi-Fi Rush, The Evil Within) and Arkane Austin (Redfall) and mobile game developer Alpha Dog studios (Mighty Doom). In a move that has bolstered the turbulent nature of the industry.

Though Arkane Austin’s Redfall arrived to both critical and commercial failure, Hi-fi rush did not. Widely regarded as one of 2023’s ‘hidden gems’, which, in a year of such soaring critical success, is no small feat. Xbox has, however, insisted that commercial failings is not the reason for this ordeal. Matt Booty, head of Xbox game studios has stated that the company was spread too thin, “like peanut butter on bread”. Thus the closures followed, as a result of this oversight. Now Booty has reaffirmed that the shut downs were executed in favour of a “reprioritization of titles and resources”.

This is not an anomaly. During Covid, the worldwide populace was placed in lockdown, as a result the player base (and subsequently player demand) grew exponentially. Xbox, naturally, catered to this increase in demand for new titles with the ensuing acquisition of Activision and the monolithic Zenimax –  responsible for Bethesda game studios, Arkane studios and Id software to name but a few. All of the aforementioned acquisitions were made in the aim of bolstering their ever-expanding game pass library – however, there were drawbacks.

The inevitable slump ensued. Lockdown’s were lifted and work from home began to fade away for the majority of the worldwide workforce. Now, in the past year, Xbox has laid off almost 5% of its own global workforce, beginning with the expulsion of 10,00 employees back in January 2023.

This overzealous expansion, however egregious, is not unique to Xbox’s ambitions. Embracer group, formerly THQ Nordic, has mirrored this flawed ambition in their own way. After their failure to secure a two billion dollar investment from Saudi-owned Savvy Games Group, they had to backtrack. In the aftermath of its spend-thrift spree, seeing it acquire the likes of the IP rights to the Hobbit and The Lord Of The Rings, they announced a restructure. What ensued was the layoffs of some 900 employees. Shutting down Volition games, Campfire Cabal and layoffs at Crustal Dynamics and Beamdog.

The news undoubtedly stung fans of these games, though the developer’s have suffered the true brunt of it all. What stings is also the rumour that Tango gameworks was in the process of pitching a sequel to Hi-Fi Rush and Arkane Austin were reportedly looking to return to the immersive-sim genre with another title. Naturally, the fulfilling of these desires necessitated a greater scope and a larger team to bring their vision to fruition.

It is the developer’s desire to expand which Xbox had cited was the reason for their closure. Jill Braf, head of Zenimax studios stated, “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”. Evidently, the aims of sating the Covid entertainment boom have proved too costly to maintain. With leadership now spread thin, paired with the developer’s natural desire to broaden both their scope for a sequel and their team. Microsoft’s oversight has resulted in this catastrophic outcome.

Given the recent flaming that Xbox has been receiving it would be expected that they would provide clarity or a community response – neither has come to fruition. Information has been relayed by the Jason Schreier articles chronicling this tumultuous few days for Xbox.

With an increased focus being placed upon bringing their in-house titles to other platforms and the ever-growing size of the Game Pass library, Xbox shows no signs of slowing down. With their growth reported in their financial results for last year, showing an increase of 1% year-over year, amounting to $36 million paired with their 5% growth in third-party content, due in part to their Game pass growth. This dampened a minor decline in their hardware revenue, which fell around 13%.

Indeed, Xbox’s financial success tells of a continued growth, though the inner turmoil and layoffs has undermined a strong 2023 for gaming as a whole. It’s a simmering underbelly of the ever-churning gaming landscape and those willing to enter it. Indeed 2023 was a great year, though through last year and into 2024, the layoffs have set a bleak precedent for the industry under the burgeoning volatility of corporate acquisition.