- Xbox initially encouraged acquired studios to focus on quality and winning awards over system sellers.
- However, the mandate changed once the titles were deep in development under the old rules.
- The sudden focus on profitability left studios facing significant pressure, layoffs, and shutdowns.
Xbox is experiencing a crisis that threatens the future of multiple studios and its entire structure. New details now reveal that the leadership has been more at fault than many realize.
An insider claims that many of the studios currently in hot water were following Microsoft’s initial strategy to focus on high-quality titles for Game Pass instead of system sellers.
However, the directive to focus on profits around 2023 left these teams under pressure to deliver commercial hits when the projects were already deep into development under the old mandate.
Why it matters: The developers at risk of closure today are essentially being punished for following the leadership’s original strategy. These results have led to a total morale collapse, as studios scramble to go independent.
Credible insider Jason Schreier sifts through the internal history of Xbox and explains that the acquired ‘limited integration studios,’ including Double Fine and Obsidian, were told to focus on winning awards and Game Pass for their first few years.
The messaging was: make good games, help us fill out Game Pass, try to win awards. Of course, don’t lose money, break even, but this is not a profit play. Game Pass is the north star.
-Insider, Jason Schreier.
The goal was to fill Game Pass with artistic and diverse high-quality entries, even if they were not commercial hits.
However, Microsoft soon started demanding greater profits from Xbox as Game Pass growth stagnated, Activision acquisition costs mounted, and the company focused on the AI market.
Suddenly, it became all about profitability. […] they say hey we want to see bit more of a return on this massive investment that we made into Xbox.
Compulsion Games’ South of Midnight and Double Fine’s Psychonauts 2 were award-winning Game Pass darlings.
But these studios are still being penalized after their games failed to sell like hotcakes, implying that sudden mandate shifts and politics have played a major role in Xbox’s serious decline.
Do you think these changing mandates are what messed with the prowess of these Xbox studios over the years? Let us know your thoughts in the comments below, or join the discussion on the Tech4Gamers forum.
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Shameer Sarfaraz has previously worked for eXputer as a Senior News Writer for several years. Now with Tech4Gamers, he loves to devotedly keep up with the latest gaming and entertainment industries. He has a Bachelor’s Degree in Computer Science and years of experience reporting on games. Besides his passion for breaking news stories, Shahmeer loves spending his leisure time farming away in Stardew Valley. VGC, IGN, GameSpot, Game Rant, TheGamer, GamingBolt, The Verge, NME, Metro, Dot Esports, GameByte, Kotaku Australia, PC Gamer, and more have cited his articles.
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