With the closure of 4 studios at Bethesda, Sarah Bond’s poor communication, and the disappointments among developers who were acquired for billions, Microsoft and the Xbox brand are no longer held in high regard today. The American company has been releasing a series of negative announcements, causing disappointment and poorly articulated statements over the past week. As a result, Hellblade 2’s release has largely been overlooked by almost everyone, including within Xbox, due to the lack of marketing for the game. What is Microsoft’s strategy? Has the company lost the trust of its community? Is its business model centered around Game Pass truly effective in the long run? Given the rumors suggesting further layoffs may be announced in the coming months, it appears that Xbox has reverted to operating as a profit-driven entity that undervalues creative endeavors.
For about a week now, the brands Microsoft and Xbox have experienced significant damage to their image, even among their own communities and most dedicated supporters. “Xbox is done. How can we still trust Microsoft?” Jez Corden, Editor-in-Chief of Windows Central, expressed his frustration. “It’s not the Xbox brand I want to see anymore,” added Klobrille, a Twitter user with 162,000 followers who frequently follows Xbox news, stating, “I don’t recognize it these days. To all the affected employees, I want to say I’m deeply sorry.” Gene Park, a journalist at The Washington Post, also commented sarcastically, “One thing is sure: no one will believe Xbox when one of its spokespersons says Hellblade 2 is a potential hit for us and players.” Internet users have uncovered an old tweet from Aaron Greenberg, Microsoft’s marketing head at Xbox, who in April 2023 declared that Hi-Fi Rush was a complete success and that Game Pass needs more such games. Statements made just a few days ago by Matt Booty, the head of studios handling recent restructuring, followed Phil Spencer’s notable absence recently. “We need smaller games that give us prestige and rewards,” he said after closing Tango Gameworks, the studio behind Hi-Fi Rush, which had begun planning for a sequel. These statements deeply disappointed John Johanas, the game director of Hi-Fi Rush.
There are several explanations for the issues affecting Xbox in recent days, but they have actually been rooted in its DNA for a few years now and were not publicly acknowledged until recently. This stems from multiple factors. Firstly, the extensive acquisition of numerous studios has undoubtedly cost Microsoft significantly. Additionally, Game Pass is proving to be a financial challenge for the company, which it is only now recognizing. According to Jason Schreier’s investigation following the announcement of Bethesda studio closures, if Microsoft decided to cut staff, it was not due to disappointing results or poor commercial performance of the affected studios’ games but rather organizational and staffing issues. As reported by Matt Booty, Xbox’s studio head during a meeting with Zenimax (and Bethesda) employees, this indicates both a shortage of staff at Xbox and that Microsoft’s rapid acquisitions, aimed in part to counter Sony’s dominance, have led to goal dispersion. If there is any doubt about the accuracy of these statements, Jason Schreier recovered an audio recording from the meeting where Jill Braff, ZeniMax Studios director, admitted, “It’s difficult to support nine studios worldwide with a reduced central team and an ever-growing to-do list.”
Is Microsoft taking on more than it can handle? Indeed, particularly in its efforts to outpace Sony, with the American manufacturer seemingly neglecting a key element of its Game Pass: replicating the streaming model is not equivalent when applied to video games. While it is true that in today’s all-digital era, people prefer watching movies or series at home, snuggled under a blanket on their 4K TV, PC, or phone, which requires fewer resources than playing video games, this overlooks significant differences. Creating a film takes less time than developing a video game; generally, a movie can be produced within 1 to 2 years, from initial production to release.
In video game development, creating a high-quality game typically requires at least 3 to 8 years of dedicated effort and substantial resources. Consequently, seven years after Microsoft began acquiring various studios, we are only beginning to see the fruits of these investments with project releases. It is clear that significant time is needed for such endeavors, and in the interim, while Xbox Game Pass remains an intriguing concept on paper, its actual content offering has been limited and narrowly focused. As of 2024, it is questionable whether the general public is aware of Xbox Game Pass; if asked to explain how it works, half of ten randomly selected individuals might be unable to do so effectively. This lack of awareness presents a challenge for Microsoft, more so than for the Xbox division itself. It’s important to note that recent large-scale layoffs and restructuring decisions are ultimately made by Satya Nadella, CEO of Microsoft, rather than at the level of Xbox management. According to Jason Schreier from Bloomberg, following Microsoft’s $70 billion acquisition of Activision Blizzard, there is now increased oversight over the Xbox division. While a $8.1 billion purchase for Zenimax and Bethesda was less scrutinized by Microsoft, the more recent $70 billion investment in Call of Duty has drawn significant attention.
Microsoft, like many companies, has been affected by the consequences of the COVID-19 pandemic. The growth of its services between 2019 and late 2021 has ceased due to crises and inflation. Leisure activities have increased in variety, and even video games have become too expensive for some consumers. While it was once expected that Call of Duty would be available on Game Pass ‘day one’, internal discussions at Xbox are still taking place regarding this decision. Microsoft recognizes that making Call of Duty available on Game Pass upon its release could significantly reduce potential profits, as there would be no opportunity to recoup costs once Xbox and PC players have experienced the game without additional charges. There is consideration within the company to increase Game Pass subscriptions in order to ensure a return on investment.
Meanwhile, Seamus Blackley, one of the creators of the first Xbox, has criticized Microsoft’s financial decisions, considering all the developers who have recently lost their jobs and dreams: “I know the stench of money men’s decisions and how they destroy people’s lives and the confidence of creative individuals. And that’s the whole tragedy. The gaming industry keeps forgetting, then harshly relearning that it’s the DEVELOPERS who matter.”
If you’re looking for some exciting news that could potentially revive interest in Xbox amidst recent turmoil, be sure to check out “Xbox: Return and Details on the Biggest Video Game Leak in History” by Ahmed Hassan, published on September 19, 2023. The post reveals a major leak from the Federal Trade Commission about Microsoft’s seven-year roadmap, including redesigned Xbox consoles codenamed “Brooklin” and “Ellewood,” set to debut in late 2024 with impressive upgrades like enhanced storage and faster Wi-Fi. Plus, there’s an intriguing new controller called “Sebile” on the horizon for May 2024. Dive into the details that could shape the future of gaming at [Read the article]. For those looking to shift focus from the recent industry turbulence, a thrilling new development in the gaming world is worth celebrating. Ahmed Hassan’s insightful article “17 Minutes of Pure Gameplay, New Weather System Detailed in Forza Motorsport” delves into the highly anticipated reboot of Forza Motorsport, set for release on October 10th exclusively on PC and Xbox Series X|S [Read the article]. The piece offers an in-depth look at the latest gameplay features, including a dynamic weather system that promises to enhance the racing experience. Dive into this detailed preview and get ready for what could be one of the year’s most exhilarating titles. If you’re curious about what the future might hold for Microsoft and Xbox, particularly in relation to one of gaming’s most beloved companies, Nintendo, be sure to check out our latest post, “Xbox: ‘Acquiring Nintendo as a Career-Defining Moment’, When Phil Spencer’s Email Leaks,” by Carlos Mendoza (September 19, 2023). In this intriguing piece, we delve into the implications of a leaked email from Xbox’s head, Phil Spencer, in which he discusses acquiring Nintendo as a potential career-defining move. The article explores Microsoft’s strategic interest and the complexities surrounding such an ambitious venture, sparking fascinating discussions about console rivalries and brand loyalty. Dive deeper into this thought-provoking topic [Read the article].
