Microsoft's Xbox Shuts Gaming Studios, Layoff Staff in Tango Gameworks, Arkane Austin to Cut Cost

Microsoft's Xbox unit is reorganizing to cut costs. As part of this move, it will close down three Bethesda gaming studios and merge team divisions to form one unit.

According to Reuters, Microsoft is "reprioritizing titles and resources" so that Xbox can invest more in its game portfolio and new intellectual property (IP). This comes after the company purchased some gaming studios and absorbed games under the acquired properties.

Last month, Microsoft's Xbox content and services divisions reported a 62% increase in third-quarter revenue. The jump was said to have been driven mainly by its most recent acquisition of Activision Blizzard.

Shut Down of Subsidiary Studios

Despite the surge in revenue, Microsoft still wants to save money. To cut costs, it decided to shut down three of its gaming studios. The company announced the closing of Arkane Austin, Tango Gameworks, and Alpha Dog Studios.

In addition, the Roundhouse Games is set to be consolidated with ZeniMax Online Studios (ZOS). Microsoft said the merged teams will work together on "The Elder Scrolls Online" and believes that through the joint effort from the two teams, they can do even more to expand and grow the games that players worldwide have come to love.

Layoffs Resulting from the Studio Closures

Since Microsoft is eliminating the three gaming studios, it will also result in losing jobs. Xbox declined to say how many employees are set to be terminated.

"Those whose roles will be impacted will be notified today, and we ask that you please treat your departing colleagues with respect and compassion," Variety quoted Microsoft Xbox Game Studios's CEO Matt Booty as saying in his email to employees. "We will provide our full support to those who are impacted in today's notifications and through their transitions, including severance benefits informed by local laws."

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