Microsoft 's decision to shutter the Xbox Entertainment Studios division, as part of 18,000 layoffs announced on Thursday, has shocked and angered several top ad buyers, causing some to once again question the company’s commitment to advertising.
While Xbox will still offer movies and TV shows, ad buyers saw original content as appealing, partly because much of the video entertainment offered on Xbox isn’t ad supported, instead being offered for sale or rental. As a result, the abandonment of the original content strategy makes top ad buyers feel like the rug has been pulled out from under them.
That could affect confidence in a broader range of Microsoft initiatives, possibly undercutting efforts by CEO Satya Nadella to win over marketers. He has been making direct overtures to advertisers in recent months, hosting frank question and answer sessions during which he openly sought criticism while admitting the company hasn’t always been focused on advertising. More recently, advertisers say they’ve heard a renewed commitment from the groups sales team on Xbox, Bing, and even the often ignored Web portal MSN.