Xbox’s Strategy of Downsizing To Succeed Is Contradictory

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What Happened To Going Bigger?

Story Highlight
  • Xbox brought all of these studios to expand its first-party catalog.
  • However, the gaming giant is now going multiplatform and has shut down two major developers.
  • With Xbox focusing on bigger titles, it might not fulfill the promises of revisiting Activision’s classic IPs.

Xbox has expanded significantly in recent years with numerous studio acquisitions. The acquisitions weren’t even small, as the gaming giant fought a year-long case against the FTC and other regulators over the merger with Activision Blizzard.

More recently, Microsoft’s decisions point to its focus on becoming a full-fledged publisher after announcing exclusives like Sea of Thieves for PlayStation and the Nintendo Switch.

However, the gaming giant has also laid off several employees and even shut down acclaimed studios, such as Arkane and Tango Gameworks, with more layoffs coming before the end of the fiscal year.

Xbox first acquired several publishers and studios, only to lay them off in the future, which contradicts its strategy to expand its ecosystem and video game catalog. This raises the question: What is Microsoft even doing?

Why it matters: Xbox’s shift in direction only implies that the brand is no longer what it used to be, becoming a shell of its former self. Shutting down major studios also harms the industry as a whole.

Xbox Is Chasing High-Impact Titles

The Elder Scrolls 6 Starfield
Only Big Developers Like Bethesda Game Studios Appear Safe At Xbox

It seems Microsoft has taken complete control over the gaming division and is now making the moves. The company is focusing on bigger titles more than smaller games.

These decisions are being made to maximize profits since the gaming division has yet to perform well, even after billion-dollar acquisitions. The returns could be much better, so Microsoft is taking charge.

Despite all the controversy, Starfield did end up performing well. By laying off developers and shutting down studios, Xbox is condensing its team and working on major titles like The Elder Scrolls, Fable, and more.

However, shutting down smaller studios isn’t the right decision. Tango Gameworks made Hi-Fi Rush, a title that Xbox needed for years. Hi-Fi Rush led the charge for Xbox in 2023 and earned numerous awards.

The gaming giant is throwing away these golden opportunities that would’ve given it the edge over PlayStation. However, competing with PlayStation is no longer the goal since Microsft will now take the publisher approach.

What The Future Holds For Xbox And Microsoft Gaming

Senua's Saga Hellblade 2
Senua’s Saga Hellblade 2 Shows Yet Again That Xbox Is Not Doing The Best

In terms of revenue, Xbox will thrive, considering how it owns some of the biggest IPs in gaming, i.e., Elder Scrolls, Call of Duty, and more. However, as a company, the future isn’t looking bright.

With the closure of these studios, the company will have a limited array of exclusives, and the ones already released are also being ported to other platforms, minimizing the exclusive catalog even more.

Suppose Xbox is avoiding smaller titles as a whole. In that case, this ruins all our hopes of the company reviving older Activision titles. At that point, I have to ask why the gaming giant even bothered with the merger.

Hellblade 2 just launched, but its reviews are worse than Hi-Fi Rush’s. Will Xbox shut down Ninja Theory now? Why didn’t the gaming giant try and make a bigger push for this title?

The consoles aren’t going anywhere, but it makes me wonder what the gaming giant is aiming for. Hopefully, no more exclusives will be making their way to other platforms, as it will hurt the company.

Currently, Xbox has many titles to await. Stalker 2, Indiana Jones, and more are expected this year, but it seems the gaming giant has no idea where to go next.

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