Wha's Happening With XBOX: A Closer Look"

 Analysis of Microsoft's Decisions

"So, Microsoft has done something quite rash back in 2021. Microsoft bought Zamax Media, which means they bought Bethesda, which means they bought a bunch of studios that Bethesda owns. And Microsoft decided to close a bunch of them. Among those are Arcane Austin, the division of Arcane Studios that was in charge of Prey, and Tango Gameworks, who brought us the widely different titles Evil Within and High Rush, both wonderful games for very different reasons. And they're also closing Alpha Dog Games, the makers of Mighty Doom, a mobile game, and Roundhouse Studios."

Critique of Microsoft's Management

"Hi folks, it's Zaid Ikram, and today on Speed Tool, we asked the question: What the hell is going on at Xbox? So, from a business perspective, let's say you buy a bunch of things that make money, and then you take a hammer and you destroy those things. Are you good? No, you're not. And that's what happened here. It's also what a lot of big gaming companies have done in the past, EA in particular. And it's true that the gaming industry, as well as most industries, are feeling the burn. When people got angry about that, they changed it pretty quickly. But back to what I was saying, industry-wide, things are not going as well as they were when everybody was locked in their house with nothing to do. Kind of not the biggest shock in the world. And then we consider the whole inflation problem and stuff going on in geopolitics. It's not shocking that it's harder to make money right now. And while Xbox's cloud services have been making a lot of money for them, it makes perfect sense, honestly. Their hardware sales, which include Surface, it's not just Xbox, but all of their hardware sales across the board, are not doing good. Xbox is, of course, the premier brand regarding all of that. It's certainly the most successful thing that they have come up with in terms of hardware. And if that's not doing great, there's problems."

Assessment of Arcane Austin's Situation

"So that's the criteria we have going in. And then Arcane Austin, for instance, was tasked with making Redfall, a live service game that nobody at the studio wanted to make. Yes, there was a cool idea for a world, but no, these are people who were not experienced at live service games and did not want to make live service games. Both Arcane Lyon, the original French studio, and Arcane Austin's expertise are entirely in single-player immersive sim-based shooters and stealth games. And Redfall ain't that. We could go into the development of Redfall all we wanted, but it's a game that suffered a lot of serious issues during development, particularly staffing issues. And again, people didn't want to work on the game. People were hoping it would be canceled by Microsoft or at least rebooted into an Arcane game. It wasn't. And there was a 70% turnover. Seven out of every 10 developers that worked on Prey left during this project. And you can tell that in every way, this is not a game that should have come from Arcane Austin for a vast array of reasons. And it is in no way shocking that that game didn't do well. It's not a particularly good game. It's not the worst thing I've ever played in my life, certainly, but it's not good. And it didn't do good."

Concerns Regarding Tango Gameworks

"The first instinct one might have is to say, 'Well, what if they just made Redfall good?' And that's not how it works. Again, this is a studio with expertise, literally the best guys at immersive sims. I would play an Arcane Austin or Lyon immersive sim any day over any other immersive sim. The only one that has any chance is Deus Ex, and the two more recent ones of that were far from complete games. Arcane has delivered on that genre more than anybody else. And to move that studio into making a type of game that frankly isn't doing well at all, regardless of who is making them. Like, the only one of these that's doing well is Hell Divers 2, and there are a lot of reasons why it's doing well, despite the fact it's a live service game, because live service games are just becoming more and more hated. Redfall didn't have a chance. It could have been twice the game that it is, and it wouldn't matter."

Reflection on Management's Role

"So to me, that's a severe management problem. It is unwise to delegate people to work on something that they don't have any experience doing, regardless of their expertise in another area. So that's the problem I think with Arcane Austin. Even still, Redfall wasn't completely mandated by Xbox. This was a project when Bethesda was just being Bethesda. So it being forced on them wasn't necessarily Microsoft. It was forced on them, but Microsoft bought them. Wouldn't they have the resources to, I don't know, help this project? You would think, right?"

Discussion on Tango Gameworks' Performance

"According to Dinga Bakaba, a studio director at Arcane Lyon, their studio is currently safe, and they have a lot more of the original Dishonored devs on their team, which is good. But he says this is just terrible; it shouldn't happen. So I mean, we can kind of at least understand where Microsoft is coming from in closing Arcane Austin. But it starts to get a little murkier when we start talking about Tango Gameworks."

Reflection on Microsoft's Decision-Making

"Tango Gameworks was responsible for The Evil Within 1 and 2, the first of which held the record for the highest selling first month of sales for a new survival horror intellectual property for about a year before Dying Light came out. And although The Evil Within 2 didn't do as well, it's a well-regarded game. And so is Ghostwire: Tokyo, which I don't think was like a smash hit, but at one point, they had 5 million players. They tweeted out a thank you to the 5 million players of Ghostwire: Tokyo, which implies pretty decent sales. The game they came up with after that was High Rush, which I did the 'Before You Buy' on. Great game, did pretty well, and had 4 million players, which isn't the 5 million players that Ghostwire: Tokyo had, but I'm also positive that High Rush was not as expensive to make. And while, yes, these player counts figure in a lot of Game Pass players, the point of Microsoft buying these studios is for them to have Game Pass games that you can play for free on the Xbox platform, thus incentivizing people to go to the Xbox platform. And again, with those games, it worked. Those are not numbers to balk at, in my opinion. This throws a fly in the ointment when we're talking about the narrative that the problem is these studios aren't living up to expectations. No, Redfall did not live up to expectations. But what did Tango Gameworks do? From what I can tell, exactly what they were asked, and performed as well as one might expect them to. So there's not a common denominator between these two companies in particular. And I don't think you can argue either of these companies are dead weight. Yeah, Redfall is a dud, but who cares? I know this is going to sound like I'm going "Ah, if I was in charge," but if I was in charge, my response to Redfall would be, "Oh, maybe Arcane Austin should be working on immersive sims." Like, you don't take Old Yeller out back and shoot him in the head because he had a single accident on the carpet. The phrase isn't, "If at first you don't succeed, close the doors and put everybody out on their ass." But it's not even about success. Like, High Rush did well. Ghostwire: Tokyo did well. They just didn't do well enough, which scares the hell out of me when I start thinking about other studios and IPs that Microsoft owns."

Concerns about Microsoft's Direction

"These are people that are in charge that seem to switch direction quickly, don't seem to care about success or failure, but just whatever whim they seem to be operating on currently. Those are the same people who say whether or not the developers of Hellblade: Senua's Sacrifice in its upcoming sequel if those people get to keep their jobs. Those are the people who get to say if the MachineGames people, the people who made The Fantastic Wolfenstein series, get to keep their jobs. But how many Starfields are going to have to come out before they start looking at Todd Howard sideways? My guess would be quite a few because this standard is not being applied across the board."

Reflection on Microsoft's Impact

"And then forget closures; think of the stuff that they can do without closing a game studio. They can meddle in the affairs of any of these studios that they want. People complain about certain choices being made in games, and oftentimes those choices aren't even made by the developers. They're made by the people who own the development company. These are the same people who are making those choices that are in charge of these moves. And I'm just going to say that that's probably what the real problem is here. Like, these are not consistent people. The day after killing Tango Gameworks, Matt Booty, the head of Xbox Game Studios, had a town hall amongst all the employees that remained to talk about the future goals of Xbox Game Studios as a whole and had the gall to say, 'We need smaller games that give us prestige and awards.' Aaron Greenberg, a VP at Xbox Games Marketing, on April 21st, said, 'High Rush was a breakout hit for us and our players in all key measurements and expectations.' Why are these people running the show?"

Conclusion and Call to Action

"I'm not saying that absolutely everybody who said these things or the whole team thinks a certain way. It's probably not like that. There are probably people with different opinions on here. But the result has been closing studios that create games that they are willing to call breakout hits. Can you imagine what that feels like for somebody who works at Tango? Just last month, an executive said publicly that they consider that game a breakout hit by all conceivable metrics. And this month, they find out that everybody involved is losing their job. What does that say to every other developer who isn't Activision Blizzard or Bethesda itself? And what does it say to consumers who spend money, invest their time in these video games?"

Call for Support

"Video games are, to be clear, a pretty big suck of both of those things on the consumer end. We buy that stuff with the assumption that there is somebody on the other end that's going to be consistent. And that companies that make these games and the sequels to these games and future games are going to be around. The whole reason that we continue buying games is because we assume they're going to be good. Part of the reason we assume they're going to be good is because we know that good developers are making them. This is a move from Microsoft that inspires no confidence anywhere across the board."

Final Thoughts

"And just to be clear, that should be regarded as a harbinger of what is to come when they are aggressively cost-cutting things that are doing well or they know are capable of doing well. They are establishing a precedent by which their teams of executives will go back and think about, 'Well, we did it with these people; should we do it with these people?' I mean, by the standards of success, these people are no more successful than those people. Why should we keep them around? This is how we lost so many of the double-A game studios of the 2000s. Hi-Fi Rush is one of those types of games. A lot of what Arcane does is one of those types of games. And now everybody on that level is thinking, 'Oh, well, we have to make games that are going to be AAA hits on Double-A budgets.' That's going to be easy for us. That's going to result in a lot of good. No, I don't see this as a sign of anything good to come."

Closing Remarks

"You guys know that I can be an old bird yells at Cloud, but I've seen this kind of stuff happen before, and it happens in waves. Last year, we had a big wave of this kind of crap happening with the whole Embracer situation. That's calmed down a bit. But now this is happening. And this isn't going to stop, especially if the mode of success in gaming is you build a studio and get bought by one of the huge companies. Anybody who achieves financial success with a game, and your main goal is to make games, do not sell. I'm just saying that right here. We, the gamers, would appreciate that, and we will support you when you put out good stuff. And also, we've got to support the developers coming out of this Xbox apocalypse. Because, you know, a lot of them will start new studios, and you know a lot of those studios will put out the games that those people are excited to make, rather than something like Redfall. It doesn't matter whether we do or don't support Microsoft, but those guys, it does matter. So we should keep our eyes peeled for that. At the same time, we also got to pour one out for everybody who doesn't make it back. There's going to be people who just get a job somewhere else and stop making games, and that sucks. That sucks a lot. Many of these people, you know, when these Microsoft deals were announced, thought, 'Oh, nice. Microsoft has all the money in the world. We're going to have better budgets and the ability to make better games.' And this is how that went. It sucks. This whole situation sucks. I don't have anything positive to leave you with either. 

Again, let's just keep our eyes peeled and try to support the developers that come out of this on the other end. That's the best I've got. How about you leave us a comment? And as always, we thank you very much for reading this blog. I'm Zaid Ikram. And we'll see you next time right here on Speed Tool.