Microsoft axes four game studios, including Tango Gameworks and Arkane Austin

Microsoft confirms major studio closures within Bethesda, and these ones hurt

The games industry has been impacted by wave after wave of layoffs over the past few years, and now Microsoft has added to the growing list of closed game studios and game developers without work. Today, Microsoft has announced the closure of Tango Gameworks, Arkane Austin, Alpha Dog Studios, and Roundhouse games.

Out of these four studios, Roundhouse Games’ staff are the only ones that will remain employed by Microsoft/Bethesda. Roundhouse Games has been adsorbed into ZeniMax Online Studios, the company behind The Elder Scrolls Online. The other three studios will not be adsorbed by others and will be completely closed down.

Tango Gameworks proves that even success cannot save you from closure

Tango Gameworks, the developer behind Hi-Fi Rush and Ghostwire Tokyo, is the most controversial of Microsoft’s newly announced studio closures. Its newest game, Hi-Fi Rush, was a smash hit for Xbox when it was announced and released in early 2023. If this proves anything, it’s that making a good game isn’t enough to save you when your parent company wants to save some money.

After the release of HiFi Rush, Shinji Mikami announced that he was leaving Tango Gameworks. Following the release of Hi-Fi Rush, there have been reports that Tango has had difficulty committing to a new project under the studio’s new leadership. These factors may have played a role in the studio’s closure. Even so, it is hard to believe that Microsoft has closed down Hi-Fi Rush’s developer given that game’s acclaim.

Arkane Austin, the studio behind Redfall and Prey, is the third studio that Microsoft has closed today. The commercial failure of Redfall appears to be the reason behind this studio’s closure. Even so, it is sad to see that this developer will not be getting another chance to make a successful game.

(If Hi Fi Rush wasn’t a success, what is anymore?)

Alpha Dog Studios is the final studio that Microsoft has decided to shutter. This studio’s latest game is Mighty Doom, a mobile game that released in 2023. This game is due to be sunset on August 7th due to the studio’s closure. Since this studio’s closure has no impact on the Xbox brand, it is easy to see why Microsoft has decided to close this studio. Even so, it is sad to see Xbox cut down one of its mobile studios.

Xbox needs more games, so why are they shutting down studios

Microsoft started its developer buying spree in response to allegations that “Xbox has no games” during the Xbox One console generation. Now, Microsoft is making cutbacks across its gaming segment, resulting in the closure of many of the studios that they spent so much money acquiring. Why? The simple answer is “shareholder value”.

In the eyes of many business’, profits always need to rise and shareholders need maximum return on investment. In the short term, this often means that cuts need to be made to spending job cuts are necessary when there isn’t enough business growth. For large companies like Microsoft, this can mean cuts across a large number of games studios, or the closure of some studios.

Honestly, job cuts for “shareholder value” are perhaps the most sinister aspects of modern business. They destroy employee morale, and tend to have little to do with the overall performance of specific employees. The result of closures and widespread job cuts is that nobody feels that their jobs are safe. Beyond that, studios lose much of their talent so that shareholders have a nicer looking spreadsheet. That has an impact on the games they create, and the future success of these studios.

It is hard not to be angered by Microsoft’s latest wave of studio closures. Tango Gameworks should have received further investment after Hi-Fi Rush’s success, and Arkane Austin deserved a second chance. If Microsoft wants Xbox to be a success, they need to start treating their staff with more respect. They are not a line item on a spreadsheet, they are talented artists that shouldn’t be discarded anytime profits aren’t high enough.

You can join the discussion on Microsoft’s studio closures on the OC3D Forums.