The sudden closure of Tango Gameworks, Arkane Austin, and two more first-party studios has rocked the Xbox eco-system – leaving players to question whether they can trust in the brand any longer.
Yesterday caused mass upset across the Xbox fanbase after news broke that Phil Spencer and co. had elected to shut down Tango Gameworks alongside three other studios it had previously acquired from Bethesda – namely Arkane Austin, Alpha Dog Games, and Roundhouse Studios. It’s the latest in a long line of painful (and to be honest, extremely misguided) decisions made by Microsoft and the wider Xbox leadership this year, coming a few months after the platform-holder had already gutted a staggering 1900 jobs in its gaming division following its $70 billion acquisition of Activision Blizzard in 2023. It’s yet another sign that not only does industry consolidation not work, but that things show no sign of getting any better.
The liquidation of Tango Gameworks in particular is proving a tough pill to swallow. This is because Xbox had a total of three major first-party games launch on Xbox Series X|S last year with Starfield, Redfall, and Hi-Fi Rush – and the latter is easily the best of the bunch. And its Metacritic score compared to the other two demonstrates that I'm not alone in that opinion. Sporting a luscious cell-shaded art style, kick-ass soundtrack, and some genuinely fresh rhythm-based combat, Hi-Fi Rush may not have delivered Call of Duty or GTA levels of sales, but it absolutely was a success. Clearly just one that wasn’t big enough by Xbox’s standards given that Tango Gameworks has been shut down just 15 months after its release; all of this despite VP of Xbox marketing, Aaron Greenberg, stating it “was a break out hit” in a tweet shared soon after launch.
It's frustrating as these smaller, more experimental first-party titles are exactly the type of fuel the mighty Xbox Game Pass beast needs to be fed in order to succeed. Or, at least, that’s what we’ve been increasingly led to believe. This begs the question: if widely celebrated, award-winning exclusive games – like Hi-Fi Rush – don’t move the internal financial needle enough to be considered a win by Xbox and Microsoft internally, then why should any other member of the Xbox Game Studios family feel safe from the chopping block? The truth is they can’t; not when a platform-holder is more interested in appeasing shareholders than it is supporting genuinely creative talent that can offer a bedrock for acclaim and success in the future.
For what it’s worth, I for one have never been a believer in the subscription model Xbox Game Pass provides. Is it of great value to the PC and Xbox players who sign up to it? Absolutely. But the shuttering of four studios suggests that this model isn’t as rosy and thriving as Xbox would have you believe. Until this equation of how much a game costs to develop, versus the number of subscribers said game gains for the service is solved, the Xbox Game Pass conundrum will never be fully resolved. Hi-Fi Rush did absolutely everything right and yet it still wasn’t enough to keep the studio that made it afloat – hence why I personally am not particularly hopeful.
An evil within
In addition to not fully supporting its recently acquired studios and still not being able to prove the Xbox Game Pass model seven years after it was first introduced, Xbox’s next failure stems from its prioritisation. Because yes, while Pentiment and Hi-Fi Rush are examples of Xbox taking a chance on quirky titles, yesterday’s studio shutdowns is proof that all it cares about (as Xbox Game Studios head, Matt Booty, put it his internal email announcing the layoffs) are “high-impact games”. In other words, games that sell gangbusters, as opposed to simply filling out its subscription service’s games catalogue. Releasing a game with the expectation of it making its money back wouldn’t be unusual had Xbox not trained its audience to not buy games anymore. Just saying!
Now it’s become evident that all that Xbox was interested in when purchasing Bethesda for $7.5 billion was Fallout and The Elder Scrolls, and only Call of Duty and Diablo when locking down the Microsoft Activision deal last year. These so-called “high-impact” games might be the titles that keep lining the pockets of shareholders, but they’ll hardly lay the foundation for future innovations to come. Hi-Fi Rush and arguably even Redfall (if handled correctly) both represent new IP Xbox essentially hung out to dry, turning their back on them before either of the two had a chance to truly fly. Failing just once cannot be the default precedent to warrant an entire studio’s closure. If this does become the norm, a developer’s desire and aspiration to push boundaries will be forever stunted.
Of course, in addition to Tango Gameworks, the failure on Microsoft’s part to properly handle Arkane Austin cannot be understated. Redfall had its issues, sure, but the makings for a great online co-op shooter were there for a potentially even better sequel; no small feat considering that it’s the type of game the studio was never built for, having nigh-on perfected the modern immersive sim in the form of 2017’s Prey. Thankfully, one small glimmer of light comes from Arkane Lyon staying as is. Even then, however, the next game it’s confirmed to be working on is Marvel’s Blade, continuing Xbox’s emphasis not to cultivate original IPs and ideas but to lean on licensed franchises in the hopes it will be financial viable. Our first proper taste of such approach will come when MachineGames’ Indiana Jones and The Great Circle launches later this year as an Xbox exclusive.
It's a sorry state of affairs when, for Xbox’s collection of first-party studios, your future in the industry is no longer reliant on whether your game is successful (Hi-Fi Rush) or it isn’t (Redfall). This kind of leadership seriously calls into question what metric publishers and platform-holders should choose to measure success. Xbox itself changed the rules as soon as Game Pass was introduced, and the decision to shut down studios full of promising, creative talent indicates that it most definitely hasn’t been for the better. My heart goes out to all those affected by yesterday’s layoffs, as it does members of current first-party Xbox studios such as Double Fine, Obsidian, and Ninja Theory, who can no longer rest easy thinking that making a good game will be enough to keep Microsoft happy.
By choosing shareholders over developers, profit over creativity, and studio closures over studio cultivation, Xbox has sent out a seriously concerning message to those who make games for its platform, as well as those who play them. If great games are no longer to be considered successful, then the failure lies with leadership – not the people responsible for creating them.