Why Did Microsoft Corporation Shut Down Its Xbox Entertainment Studios?

Microsoft Corporation last week announced that it would shut down its Xbox Entertainment Studios, which has been involved in several movie and TV productions. Why did the software giant abandon its original content video strategy? Well, Microsoft Corporation CEO Satya Nadella seems to have realized that the Xbox is a gaming device at its heart.

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Insomnia_843124d ago (Edited 3124d ago )

Because it's the beginning of the end for the Xbox division. Microsoft stock value went up $5 that very same day! This is what shareholders always said, without Xbox, Microsoft would've been doing a lot better. Like some of them say, Xbox more of a headache for Microsoft than anything else!

christocolus3124d ago

Did you even read the article? Dude,Nadella shut down a tv studio which was yet to kick off, had no popular shows out& no huge following yet. They did this to better realign the xbx division and put more focus on games and you say. “Its the beginning of the end for xbox”? Wth? Did you read Phils letter to the XES team or nadellas letter? Did you say the same thing when sony recently had to take the necessary steps to better reallign their company?

MS stock rose afer cutting 18,000 jobs& about 75% of those affected where Nokia staff and so you know XES has just about 200 staff so how do you relate MS stock rising to just the closure of XES? Dude Xbox aint going anywhere anytime soon..

Wth? guys are hilarious.

mrpsychoticstalker3123d ago (Edited 3123d ago )

Read the article Mr troll @insomnio

ABizzel13122d ago

I honestly don't know how on earth they thought this would be a good idea to begin with.

They have no history in the entertainment business (in this case film, tv series, etc...), it takes a huge financial backing to support something like this getting off the ground, they had absolutely nothing prepared for launch, the XBO reveal only featured a future Halo series instead of showing multiple series that were in the making, unless it was backwards compatible with 360 then they were starting with an audience of ZERO (although I'm sure they expected XBO to be doing a lot better than it is), and finally they were going to be a brand new power in a medium filled with Heavy Hitters who have already proven themselves and who are taking up many major indie contracts such as Netflix, hulu, Amazon, etc...

This had trouble written all over it from the get go IMO, and sure enough I was proven right once again. Do not launch or speak of something if you don't have the actual product ready to go right there or at least within the year.

If anything this should have had Sony written all over, because they have a 30 year history in the Entertainment Industry, they have a large catalog of movies and TV shows they can use, they already have the crew, writers, directors, etc... on board, and overall it just made more sense.

Death3122d ago

The division was cut, not the prodict line. They basically cut out the overhead which didn't seem to be able to line anything substatial up anyway. The Halo projects are still under way and will be released.

Perception is everything. Some gamers have been flamming Microsoft for having the vision to do entertainment and games. It's not a new concept and something that has been going on for quite some time. Sony made a deal with Viacom for their own subscription TV model that is yet to be released. If anything Sony has been much more active in their media plans which is a natural direction to go since they have the music labels and tv/movie studios. For what ever reason, gamers have crucified Microsoft and rallied behind Sony over entertainment. With the PS3 it did games and more. Microsoft mentions media and they are no longer focused.

It's a shame because Microsoft has been trying to please the people and media machine that simply wants them out of gaming. They have reacted and based their decisions on those with no intent on buying an Xbox instead of following their initial plans. Listening to the wrong people is what will kill the brand and Microsoft has been doing it since launch.

Eonjay3122d ago (Edited 3122d ago )

"They did this to better realign the xbx division and put more focus on games and you say."

No they didn't. Microsoft wanted to get into entertainment. The used the name XBxx-TV to give what would otherwise be an unproven franchise producer, some name recognition.

The Xbox reveal wasn't intended to be about just the console and thats why Nancy Tellem (who was graciously allowed to keep her job last week) introduced the new Division; she was trying to sell a legitimate production studio.

You see, it costs millions of dollars an episode to create some of the most popular shows today. Studios don't mind this cost because they can make bank in two different ways:

1. Attract advertisers to pay to air with your content.
2. Attract and collect subscription fees from cable companies. HBO does this.

So, the first thing to do is to see if you can attract advertisers by showing them your content and signing ad deals.

Back in April, Microsoft attended Newfront in a bid to pitch their content:

“We’d absolutely create something with them,” said Paul Furia, group director at LiquidThread, Starcom’s branded entertainment division. “Our brands are looking for new platforms and Xbox presents another window into the living room.”

So, it seemed to be going well. In the end, I think they closed because they couldn't attract the funding necessary to legitimize spending on production. It had nothing to do with making games, it was about their inability to make the money they wanted from ads.

Xbox TV was not a division of Xbox. Microsoft never insinuated it was. The advertising was aimed at the same group, but it was never integral to gaming.

+ Show (1) more replyLast reply 3122d ago
Tedakin3122d ago

The vast majority of those layoffs had nothing to do with Xbox.

Charybdis3122d ago (Edited 3122d ago )

Think its not solely a decision based on internal workings of the studio, but also an adjustment in strategy for media support on xb1. The strategy of Microsoft trying to 'steal tv dollars' might not work well in combination with them trying to work together with different television providers;in order to get support for integration with their console (hdmi-in tv stuff etc).

Aldous_Snow3124d ago (Edited 3124d ago )

Does make you wonder how the division would fair if it was left to fend for itself & not topped up by microsoft coffers..

I think you could say they would be on a tighter budget than Sony & all these 3rd party exclusives/DLC would disappear instantly.

And of course, Baghdad Larry would rot in the fiery depths Mount Doom where he belongs!

Godmars2903122d ago

Are you talking about the canceled TV part, or the whole of Xbox division?

Because between looking at how the first Xbox only sold at a loss, the 360 had its RRoD issues plus all the money spent on limited exclusive content which could have funded dozens of full games, the answer should be obvious.

Who exactly is Baghdad Larry?

3123d ago
cfc783122d ago

Microsoft must of had their Weetabix that morning they made the right decision in my opinion just a shame it took so long for Microsoft to realise most gamers want a games console and not an all in one hub for your living room but better late than never hope they keep the changes coming they've improved XB1 a'lot since launch but there's more to do.

Soldierone3122d ago

Because unlike Sony, MS hasn't made a stamp in the entertainment industry and it isn't on their current plans at the moment. That all it means.

Same reason Sony dropped laptops, it didn't align with their plans and it wasn't that great anyways.

hkgamer3122d ago

wonder where the disagree came from.

anyway, i agree. i also find it very strange that sony hasnt been pushing tv stuff, maybe push it further like netflix.

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