290°

Why Xbox believes it must cut costs and close studios

Companies, particularly public companies like Microsoft, need to grow.

Read Full Story >>
eurogamer.net
gold_drake30d ago

i mean its pretty simple, they spent close to 30 billion in acquiring activision, they thought they'd make it bk no problem, and that didnt happen.

its just shit that because of MS's miscalculation alot of people lost their jobs.

Jingsing30d ago

This is exactly what many people said would happen including the CMA and FTC. Lies lies and more lies and they allowed a $69 billion buy out to happen.

gold_drake30d ago

oh yeh it was 70 billion. that was my bad haha even worse.

JackBNimble29d ago

MS has educated financial advisers, they knew there was little chance to recoup the 70billion just to break even on the Activision deal let alone whatever other nonsense is going on in MS.
This whole thing was to corner the market for leverage.

thesoftware73030d ago (Edited 30d ago )

gold,

You can't be serious, right?

Do you think that MS thought they would make 80bill in a year & Half? They haven't even released titles under MS yet, lol.

But in fact, that A/B revenue is already paying off, look at the last earnings call. That $80 billion is long-term money, my guy, no sane person/company would think they would make that back in any short-term situation, it's a long-term investment.

Let's play silly then. If MS's reason for laying off staff and closing studios was due(which it really was not) to the A/B deal, tell me what Sony's reason was for past studio closures, the recent 900-person layoffs, closing Sony London, shutting down Dreams, and closing Japan Studio? Zipper? Psygnosis? cuts at all their internal studios.

Keep in mind, you are claiming MS's reason is because of the A/B deal; please explain Sony's reason.

Hofstaderman30d ago

You actually still defending them? Sheesh.....

gold_drake30d ago

this is not a sony vs MS debate. dont make it something it isnt.

and of course not, but im pretty sure they thought they'd make more money after the deal. they didnt, and closed off some studios.

its pretty insane to think there is any other reason for the closure of studios in this case.

romulus2330d ago (Edited 30d ago )

(It really was) due to the Activision Blizzard deal and the loss of physical sales due to gamepass. You keep bringing up Sony in all your posts about this, stop deflecting and trying to change the topic, this is about MS and what they are doing.

BehindTheRows30d ago

Has nothing to do with Sony. Stay on topic.

notachance30d ago

once in a while you see someone too invested in their make-believe console war that everything happened has to be connected to said war…

a bit of banter between fans is normal, this crusade you’re doing now isn’t.

Chevalier30d ago

Wow idiotic. You bring up very old closures not that there haven't been recent ones from Playstations, but, seriously stop deflecting. This has NOTHING to do with Playstation.

Does Playstation got $3 trillion behind them and daddies wallet? No they don't so stop making a fool of yourself.

Xbox has never been profitable really and they just keep losing money so between their worst hardware sales, terrible 3rd party sales and now terrible 1st party sales.

Gamepass numbers that are no longer being announced shows their numbers after 3 years of missed targets has flatlined. Plus their recent gains up to 34 million were ONLY because they folded Gold members in too. Absolutely take your idiotic rhetoric out of here. Keep on topic without deflecting.

S2Killinit30d ago

Ayayayay with these xbox/MS excuses.

Reaper22_29d ago

How dare you mention Sony! Everyone here knows when Sony closes a studio and lay off workers it was the right thing to do. Even when they bought Gaikai and fired almost everyone it was the right thing to do.

Gamers can be such hypocrites sometimes.

andy8529d ago

Is it? That's revenue not profit. Completely different.

fr0sty29d ago

The earnings call only showcased how dire the situation is... Even with ABK and Bethesda, they still couldn't make enough to keep investors happy, gamepass subs are stagnant, and hardware sales are tanking.

+ Show (7) more repliesLast reply 29d ago
thesoftware73030d ago (Edited 30d ago )

Drake,

"this is not a sony vs MS debate. dont make it something it isnt."

You are correct that it's not an MS Vs Sony Topic, but when exaggeration and imagination mix from a one-sided social group, similar examples are needed to ground radical thoughts; in this instance, the example was that shutting down 3,4,5, even 6 studios during a restructure/ buyout/acquisition is not some anomaly(it can suck) that has to be dissected or spell doom and gloom.

"But I'm pretty sure they thought they'd make more money after the deal. They didn't, and they closed off some studios."

But they did make more money, a lot, actually; the last earnings call showed a huge growth in profit, almost all due to A/B revenue.

"its pretty insane to think there is any other reason for the closure of studios in this case."

The fact that they did make money, kinda throws this out the window, and besides, you don't wake up and say, hey let's close a studio, you look at the output, you look at the dev as a whole, the long term and short term, you weigh it against all other studios and goals, you keep key members, ect..then you close if they are the weakest links...which by MS analysis they were.

Again, I will make a small Sony comparison, just so some of you can understand and see past the bias; Insomniac, ND, and Bungie have made some of the best games ever created, yet Sony saw fit to cut jobs in every of these studios, even tho Insomniac & ND are the biggest producers of PS games, leagues ahead better than Tango and Arkane, yet, they saw cuts, mind you, while being the TOP produces of PS first party. They were told to cut costs, and more jobs may be on the line, and Bungie is being threatened by a hostile Sony takeover. Put that in perspective, as I know that layoffs and dev closures are different, but if the best of the best is getting cut off, it is less than surprising, that lesser studios are closing.

@Cheva,
My response fits well with your comments as well. You even went on to prove that the dev closures are not just due to A/B acquisition. Then you point out Sony has less money than MS, inferring that MS should keep devs open that they see as lesser earners, while Sony having less money makes it okay to close them. lol...it doesn't work that way.

gold_drake30d ago

im not reading all of that. u have ur opinion, i have mine.

thats rly it.

but this aint sony vs ms.

ApocalypseShadow30d ago

You're trying to compare a 100 billion company to a company that has 3 TRILLION worth. SIE has to live or die on their own. And in turn, PlayStation has helped the main company again and again. Sony has to balance out what is working and not working in the company.

While Xbox has Daddy Warbucks footing the bill to keep the platform afloat. They have been bleeding money from Nvidia hardware in the OG Xbox, the RROD fiasco, the attempted 2013 DRM nonsense and the lies about being the most powerful console in the world and the losses of paying out millions to prop up a service hoping it catches on with enough subscribers to justify its existence.

They're not comparable if Xbox isn't allowed to live or die by its actions. It's subsidized. Revenue isn't profit. And if they were profiting on their own, they wouldn't be closing developers. If they were profiting, they wouldn't need Daddy Warbucks spending 80 to 100 billion buying up 3rd party publishers to sustain a loss leading platform.

They stopped announcing game sales, stopped announcing hardware sales, stopped announcing game pass subscribers, they are putting games on their competitors platforms but you're telling us that they are doing great even after killing jobs and closing developers at Xbox.

Stop drinking the Kool aid. You're drunk.

Chevalier29d ago

Again at which point did Playstation have a $3 trillion company shift the market with a giant purchase?

"But they did make more money, a lot, actually; the last earnings call showed a huge growth in profit, almost all due to A/B revenue."

Lol. No they didn't. Increased revenue was ONLY due to adding Activision Blizzard revenue in. Growth was only 1 percent. It's idiots like you that have no idea what they're talking about is why Xbox isn't better than it is. You guys just make excuses continually.

If Xbox got so much profit then why did they stop announcing hardware numbers? Why did they stop announcing Gamepass numbers? Oh right because they're NOT profitable. Their sales in every category has dropped off the face of the planet. It's why Spencer will be closing more studios and canceling upcoming projects too.

The Wood29d ago

How can they be profitable when they're not selling enough hardware, software or subs. You need take a seat on this one my friend unless you can prove you angles

jwillj2k429d ago

Sony didnt shut down the studios you mentioned after they made last of us or ratchet and clank or destiny. Cutting jobs is not equal to closing studios. Sony cuts are a candle in the sun of Microsoft’s closures.

+ Show (2) more repliesLast reply 29d ago
WelkinCole29d ago

I am pretty sure MS knew this would happen and this was part of their plan. I mean if anyone with half a brain can see this happening I am pretty sure a multi billion company like MS knew this would happen

The whole strategy in buying Beth and Acti/Blizzard is for

1. Buy established games they can have under xbox because they have done a horrible job in building their portfolio internally for the past 15 years

2. Following from 1, try and boost xbox competitivenss against a dominat PS which MS after 3 tries still can't crack

3. Follolwing from 2, try and weaken Playstation dominance by taking out these massive multiplats from the PS

4. Following from 3, try and profit off from the PS domiance with selected games they will still have on the PS to make money like COD

5. Obviously get the IP's by buying them instead of creating them which again as I mentioned in number 1 they have been woeful in doing

None of these had anyting to do with keeping all the devs they accuried. MS has always been very shitty to Devs under them. Look at what happned to Bungie for example.

I believe MS in court truely mean it when they said they had to do something because PS was just too dominant. This was their last roll of the dice.

And from the looks of things. It has not panned out as MS had hoped. PS5 is still as dominant as ever and xbox is still behind. Worse still their MP's they got is not irreplaceable as they thought. Starfield? lol!. There have not been any major shift in momentum in this console war in their favor so now its time to start cutting their loses and it starts with the most expensive cost for any company. People.

Michiel198929d ago

for a comparison, sony laid of a bigger % of it's staff this year than ms, it's what companies sadly do nowadays. If you think with GP and Bethesda + acti aquisition they were looking for quick cash, you couldn't be more wrong. It hasn't even been a year, "they thought they'd make it bk no problem, and that didnt happen." shows you have 0 understanding of how a business operates.

thesoftware73029d ago

@ Michiel1989

Exactly this!

I'm reading these comments, and it's mesmerizing how off-base most of them are.

I posted a few comments above, and their rebuttals have nothing to do with the points that I presented; when they start doing that, I just ignore them because, at that point, they're debating all over the place.

Profchaos29d ago

30 more like 70 to 80 plus 7 for Bethesda

Tzuno29d ago

meanwhile everything turned woke an inevitably went downward, i'd say it serves them well if they promote such kind of approach, mwuahahahahahhh!

+ Show (4) more repliesLast reply 29d ago
anast30d ago

They are going to use AI for a large portion of the game development process. Upper management need bonuses and the shareholders need more money. So, people will lose their jobs.

Skuletor30d ago

Maybe they were already using AI to make business decisions, which would explain why they closed Hi-Fi Rush's studio, then said they need more games like Hi-Fi Rush not long after that announcement.