Microsoft has shuttered several Bethesda-owned game studios, including Hi-Fi Rush developer Tango Gameworks and Redfall maker Arkane Austin, in order to shift focus on to its “priority games”. The Xbox parent is also closing Alpha Dog Games, makers of the mobile game Mighty Doom, while Roundhouse Studios, which also contributed to Redfall development, will be absorbed by ZeniMax Online Studios. The development, initially reported by IGN, was confirmed by affected studios Tango Gameworks and Arkane in separate posts on X late Tuesday. The shutdowns come months after Microsoft announced layoffs at Xbox and Activision Blizzard earlier this year, which made 1,900 roles redundant.
The IGN report, citing an internal email to employees sent by Xbox Game Studios head Matt Booty, said the closures would lead to “significant layoffs,” but Microsoft has not yet confirmed the number of roles affected.
Bethesda-owned Arkane Studios, which comprised of Arkane Lyon and Arkane Austin teams, confirmed on X that the latter would close and cease all development on their last game, Redfall. The vampire shooter will get no further updates, but its servers will remain online for active players, the studio said.
Redfall was released in May 2023 to largely negative reviews, leading to Microsoft Gaming CEO Phil Spencer taking “full responsibility” for the game’s disastrous launch. Spencer, however, had defended developer Arkane Austin at the time and promised that Xbox would continue to work on improving the game.
While Redfall fell short of expectations, Hi-Fi Rush, in Microsoft’s own words, was a “break out hit” across “all key measurements and expectations.” Aaron Greenberg, Vice President of Xbox Games Marketing, had said last year that Microsoft “couldn’t be happier” with Tango Gameworks’ rhythm-based action title. Yet, the studio did not survive the latest round of cuts. Tango Gameworks confirmed on X Tuesday that the studio would close, thanking players and announcing that its previous games, which include The Evil Within series and Ghostwire: Tokyo, would remain available and playable across all supported platforms.
The internal email from Booty cited in the report said that the shutdowns would help prioritise “high-impact titles” and continued investment in “blockbuster games” from Bethesda. Without putting a number on the resulting layoffs, the email said, “This reprioritization of titles and resources means a few teams will be realigned to others and that some of our colleagues will be leaving us.
“We are making these tough decisions to create capacity to increase investment in other parts of our portfolio and focus on our priority games,” the email added.
Microsoft is yet to make an official announcement on the cuts, but the company will hold an Xbox Games Showcase event on June 9, where it will reveal its upcoming lineup of exclusive and third-party titles.
The latest round of shutdowns follows a spate of layoffs this year across major studios like Riot Games, Eidos-Montréal, Sony, Electronic Arts, Embracer Group, Take-Two Interactive and more. Back in January, Microsoft laid off 1,900 employees at newly acquired Activision Blizzard and Xbox — an eight percent reduction of its overall gaming division.