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Microsoft has shut down Arkane Austin and Tango Gameworks, the developers behind Redfall and Hi-Fi Rush, as well as other Bethesda studios.
Mighty Doom producer Alpha Dog Studios was also closing, while Roundhouse Games would fold into Bethesda’s The Elder Scrolls Online team. Some Arkane team members would move to other studios.
According to an email IGN obtained, Xbox Game Studios head Matt Booty said Microsoft was “prioritizing high-impact titles” and investing further in Bethesda’s “blockbuster” games.
The move ends all work on Redfall, but it and Hi-Fi Rush will stay online to play. Microsoft also promised a “make-good” offer for gamers who bought Redfall‘s Hero Pass. Players will get a refund for the value of the upgrade, Arkane said on X.
Signup here https://t.co/wb1R4m4emj to receive details on how eligible players can receive this credit. pic.twitter.com/69Os17kpQ8
— Arkane Studios (@ArkaneStudios) May 7, 2024
We’ve asked Microsoft for comment. The email didn’t say how many jobs were affected. Other studios, including Bethesda itself as well as Arkane Lyon, id Software, and MachineGames, haven’t dealt with the new Microsoft layoffs.
The move came just a few months after Microsoft laid off 1,900 Activision Blizzard and Xbox workers, and roughly half a year after the tech giant completed the Activision Blizzard merger.
It also followed a difficult quarter for Microsoft’s gaming segment. Xbox hardware sales plunged 31% early this year, owing largely to poor console sales. Redfall also created problems upon its launch in May — a buggy release and bad critical reception hurt sales. Hi-Fi Rush was well-received (and is now on PS5), but it remains clear that Microsoft is struggling to compete with Nintendo and Sony in some respects.
The Bethesda studio closures put added pressure on Microsoft to deliver during its Xbox Games Showcase on June 9th. Indiana Jones and the Great Circle is one of the few known marquee Xbox games from Bethesda for 2024, with other projects focusing on expansions for Fallout 76 and Starfield. Gamers and investors may want to see signs of other exclusives coming in the near future.
