What you need to know
- Following Microsoft's closure of a number of Bethesda studios, a new report suggests there are more cuts coming within Xbox.
- It's reported that Xbox has been offering voluntary severance settlements to a number of staff within ZeniMax as part of a widespread cost-cutting exercise.
- Meanwhile, a separate report claims that the internal debate over putting Call of Duty on Game Pass rolls on, and price increases aren't out of the question, either.
What a week for Xbox. Not a good week, but still, what a week. Following the bombshell news of studio closures within the Bethesda stable, not least the creators of the critically acclaimed Hi-Fi Rush, Tango Gameworks.
But these aren't the only cuts happening, if a new report by Bloomberg's Jason Schreier is anything to go by. Schreier claims that there's a wider cost-cutting exercise going on within Xbox right now, and that several staff members of differing roles across ZeniMax have been offered voluntary severance this week.
The report goes on to claim that others in the wider Xbox organization have been told to expect more cuts, too. Nobody wants to hear that.
Schreier also reports on some internal meetings within Xbox following yesterday's announcements. Some of the main points include Matt Booty praising Hi-Fi Rush, but also not suggesting why Tango had been closed down. Also, Redfall was apparently not the reason Arkane Austin got the axe.
Oh, and apparently Tango was readying a pitch for a sequel to Hi-Fi Rush. We're all mad that's not going to happen. But the tone seems to be what we could garner from reading between the lines on the internal email announcing the news. They want to tighten up operations and not be spread as thin. It definitely doesn't make it any better, though. Hard to see who really wins from this.
A second report released by Tom Warren at The Verge also examines the fallout from the studio closures, but interestingly adds some new juice to the cup. Internal debates are reported to have been going on for a while over putting Call of Duty into Xbox Game Pass, and perhaps crucially, the revenue Microsoft could lose out on if it did.
Call of Duty is one of the biggest selling games each and every year, and one of the crown jewels in Microsoft's newly expanded game portfolio. Whether Game Pass revenue would deliver the results or not, well, I guess that's what the debate is over.
Warren also reports that there have been discussions over increasing the price of Game Pass Ultimate. Let's be real, Game Pass Ultimate is phenomenal value already. I'm not sure there would be widespread outrage if the price went up, but equally, subscribers will want to see something for it. Price rises for the sake of price rises will hardly build bridges.
A $3 trillion company is making a real mess of this
Here's the thing. None of this is good news. People losing their jobs is terrible, and it always smacks a little harder when it's the people on the ground putting in the grind while executives try and explain it away.
The other side of the coin is that Microsoft is the world's most valuable company, currently the only company on earth with a market cap over $3 trillion. Money is at the heart of everything, and when you make more you want to make even more and so on, and so on. I've never worked at a company like Microsoft, but I have worked in roles where budgets, in particular, costs, needed to be managed to within an inch of their lives lest the directors get unhappy. But Microsoft's profits and bank account would make Scrooge McDuck drool, and we're hearing about cuts, cuts and more cuts.
It's the unfortunate side of the business world that makes everything happen. It's not an excuse, and it's never OK. And honestly, I wouldn't disagree with anyone that says Microsoft has messed up here, most definitely with the messaging.
It seems to be a running theme at the moment. Remember when the rumors started swirling about Xbox games going to Nintendo and PlayStation, and then suddenly a hastily organized interview with Phil Spencer came out explaining things.
Now we have multiple studio closures, potentially more cuts on the way, no idea still over what's going to happen with Call of Duty and Game Pass, but most of all, nothing from Xbox. Everything we know, we're getting from leaked internal emails and sources detailing meetings. Even in that, there's a lot of corporate speak.
Xbox has a big showcase next month, but right now it's hard to feel excited for it. For every step forward, there seems to be a cloud that hangs over the future of the brand. My first manager told me on my first ever day of my first ever job that "communication is key." Right now, does anyone really know what to think?
