GameCentral ponders Xbox's studio closure announcement and asks why Microsoft and Sony are struggling while Nintendo is growing.
It's amazing to think that over 10,000 video game developers have lost their jobs in the past 12 months. The gaming industry was booming during the pandemic just a few years ago, and the tsunami of layoffs continues now, not just because companies are overstaffed and looking to return to the old status quo. If there's anything the past few months have made clear, it's that things will never go back to the status quo. Not even for Xbox or PlayStation.
Just months after laying off 1,900 people across various developers, Xbox on Tuesday shut down Redfall developer Arkane Austin, Hi-Fi Rush developer Tango Gameworks, and Mighty Doom studio Alpha Dog Games. announced the withdrawal of Prey (2006). ) Merged developer Roundhouse Studios with ZeniMax Online Studios.
It is not clear how many people will lose their jobs this time, but it is clear that it will be in the hundreds. Arkane Austin may seem like an obvious target after the failure of Redfall, but this time last year Xbox head Phil Spencer said he was a “huge supporter of Arkane Austin.” At the same time, Xbox head of marketing Aaron Greenberg claimed, “Hi-Fi Rush was a breakthrough hit for us and our players on all important metrics and expectations.” We couldn't be more pleased with what the team at Tango Gameworks has given us with this surprise release. ”
Xbox's current executives seemed to change their tune depending on who they were talking to at the time, but clearly things have changed over the past year. While the continued decline in hardware sales is an obvious problem for Xbox, it's also increasingly recognized that the gaming market is fundamentally changing.
Even though this is a trend as old as games themselves, the cost of producing triple-A games has steadily increased over the years, and Microsoft, Sony, and other Western publishers have done absolutely nothing to combat this phenomenon. I haven't done it either. At the same time, young gamers have grown up on a diet of live service games, usually free, to the point where many only play one or two of his titles and ignore the rest.
This isn't all that different from the previous generation of casual gamers who only played Call Of Duty and FIFA, but at least the act of having to buy a new entry makes the game an unobtrusive, self-contained package. The idea that it exists as a Instead, most of his most popular live service games are more than five years old, and many are nearly a decade old.
These were problems that Microsoft and Sony both spent years grappling with, but both gave up the moment the problems became too big to ignore. It's been three years since Sony announced a new single-player game, but the first-party live service game it once promised has yet to be released. Purely relying on publishing games from other external developers or paying for 3rd party exclusive games and being paralyzed from taking action (I have to say they are all very good) ).
However, Xbox didn't have even the slightest hint of that. Starfield was a wet squib, but as always with Microsoft, it's always the next game that turns things around, and if that fails, the game after that. Xbox has been pretty much the mainstay of the gaming industry for the past few decades, which seems ridiculous considering the resources they have at their disposal. But even though he spent $69 billion on Activision Blizzard and almost $7.5 billion on Bethesda, their position is actually worse than the previous generation.
They're making more money now because of things like Call Of Duty. But they have to keep it and other Activision Blizzard games multi-format because there's no way to make enough money on Xbox and PC alone to justify the purchase. It remains to be seen what their broader multi-format strategy is, but at this point it wouldn't surprise anyone to see Starfield arrive on PlayStation 5 this year, Halo, etc. on PlayStation 5 this year. Immediately after.
Xbox is facing the same problem as PlayStation and appears to have roughly the same solution in terms of publishing fewer games and focusing on live service titles through Activision Blizzard. But now they have the added problem of having to justify the huge acquisition costs to investors.
It's no coincidence that the two triple-A studios that will be shut down (Microsoft apparently couldn't be bothered to find buyers for them) are the ones that just finished producing modest original games. Considering what's going to happen after Hellblade 2 launches, Obsidian launches after Avowed, and Undead Labs launches after State Of Decay 3, you can imagine how worried Ninja Theory is.
Rare seems safe thanks to Sea Of Thieves, but Rare hasn't released a new game in five years (Battletoads hasn't been made). And what's becoming clear is that Xbox is now interested in proven IP. They didn't buy Bethesda for Arkane Studios, Tango Gameworks, MachineGames, or even Bethesda Game Studios, they bought it to own IPs like The Elder Screen and Fallout.
As revealed this week, Microsoft doesn't care about the individual developers or the talent that makes the games, only the franchises themselves. This is not a Microsoft-specific issue. Sony has closed four studios in the last four years, and we'd be very surprised if Bungie makes it happen before the end of the year. However, the size of the company poses a problem. It will be amplified.
The irony of Microsoft's announcement on Tuesday is that it came just hours after Nintendo announced it would be unveiling a new console in the coming months. Just as the success of the Nintendo Switch and its many exclusive games has been highlighted by hard sales numbers that Microsoft has rejected, it looks increasingly likely that the Nintendo Switch will be crowned the most successful console of all time. On the day they made this announcement. It has been released since the Xbox One era.
Nintendo has never carried out mass layoffs, either now or in the past. Instead, executives famously took pay cuts during the dark days of the Wii U, and Phil Spencer and others responded. Obviously not meant to be emulated. In fact, rather than lay someone off, Japanese publishers are increasingly increasing base pay for developers in order to attract new staff and encourage existing staff to stay.
The lack of layoffs is partly due to differences in labor laws, but Japanese companies tend to spend less money on game production, and the business goal of unlimited growth is not only nonsense, but the idea that it is even possible is nonsense. This is also because we recognize that there is. Keep spending more money on making games so you don't hit a brick wall too soon.
The developers Xbox is firing are not only working on original IP, but are best known for creating cheaper AA titles, and are exactly the kind of developers Microsoft and Sony want to redirect. You might think that's the title. In fact, they are moving away from them faster than ever. It's all or nothing as far as accountants are concerned, and that's pushing them and the entire industry closer to the abyss.
Western video game companies are stuck in a death spiral of ignoring more and more games as not being profitable enough, and eventually have to hope they stay popular forever or else their entire business is destroyed. You'll be left with a dangerously small list of titles that you hope will collapse. The myopic attitude is breathtaking in its scale and apparent indifference to the consequences of failure.
None of these issues are unique to Microsoft, but where one would expect them to be trying to reverse trends and set a positive example as a format holder, they are instead the worst perpetrators of all. There's no question that the video game industry is currently in crisis. Unless Xbox and PlayStation do something to bring about sustainable change, industry collapse is starting to look inevitable and imminent.
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