In a statement announcing thousands of layoffs at Xbox, CEO Asha Sharma spells out just how poorly Microsoft's acquisition-heavy approach to gaming has gone.
Sharma was appointed CEO amid the departure of Phil Spencer, whose time at the Xbox helm was defined by Xbox Game Pass pushes as well as a spending spree that absorbed multiple studios and companies, most recently including Activision Blizzard. All of those purchases have caught up with the company, it seems.
"Since 2018, we have aggressively expanded our studio portfolio while the number of games created each month across the industry now outpaces the last ten years combined," Sharma reflects. "We now find ourselves competing not only with the largest publishers, but also with smaller independent studios. It is neither possible nor desirable to own every great independent studio."
Sharma admits, with a staggering figure, that "we have also learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested. As we reset Xbox, we will help independent creators succeed by providing open development tools and audiences to realize their vision."
Hence the equally aggressive reductions and resets hitting Xbox now. This includes multiple studio exits – although in a marked improvement from Xbox's established acquire-then-close pipeline, these studios are not shutting down outright.
Instead, South of Midnight's Compulsion Games and Psychonauts' Double Fine will go independent, while Hellblade's Ninja Theory and State of Decay's Undead Labs have secured buyers. Dishonored maker Arkane is also in discussions to "review potential strategic options" with Microsoft ahead of its expected divesting.
Some of the studios Xbox retains may also be "shifting investment to focus on higher priority projects," though Sharma says "these changes vary in size across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and XBOX Game Studios." This follows reports that Sharma has put Bethesda's feet to the fire over The Elder Scrolls and Fallout, though emerging reports suggest the studio will also continue work on the likes of Doom and Wolfenstein.
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