Xbox President Tries To Defend Shutdown Of Award-Winning Hi-Fi Rush Studio

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Microsoft recently closed multiple Bethesda studios, including Tango Gameworks, the developer of the well-received rhythm action game Hi-Fi Rush. Xbox executive Sarah Bond, the president of Xbox, recently reacted to and explained the company’s decision to close the outfit. The game might have won numerous awards, but the company doesn’t have a one-size-fits-all approach to defining success, she said.

Reporter Dina Bass asked Bond this question: “One of the shuttered studios in particular just created a hit game; it did really well on Game Pass in terms of engagement and won a ton of awards. Shouldn’t succeeding in that way ensure the future of a studio?”

She was no doubt referring to Hi-Fi Rush, and Bond answered by saying Microsoft takes a number of factors into consideration when attempting to define what “success” is for a given game or project.

“One of the things I really love about the games industry is that it’s a creative art form. It means that the situation, and what success is for each game and each studio, is also really unique. There is no one-size-fits-all to it for us,” she told Bloomberg. “We look at each studio, each game team, and we look at a whole variety of factors when we’re faced with making decisions and trade-offs like that. But it all comes back to our long-term commitment to the games we create, the devices we build, the services, and ensuring we’re setting ourselves up to be able to deliver on those promises.”

Jeff Grubb of GameSpot sister site Giant Bomb reported after Hi-Fi Rush’s release that the game “straight up didn’t make the money it needed to make.” Xbox boss Matt Booty reportedly said the company needed more smaller-scale games that win awards just a day after it fired everyone who made Hi-Fi Rush.

Also during her chat, Bond talked about how the video game industry, in large part, has remained “flat” in terms of revenue for the past few years. 2023 had a number of “tremendous” game launches, Bond said, but at the same time, “the growth didn’t follow all of that.” This softness has occurred at the same time that game development costs and timelines are growing, Bond said.

“All of that has been happening at the same time that the cost associated with making these beautiful, AAA blockbuster games is going up. And the time it takes to make them is going up. So much of our focus as Xbox is about how we do things to help the industry all up, while also ensuring our brand–everything we do–is there through this moment of transition,” she said.

Regarding the closure of Tango Gameworks, Arkane Austin, Alpha Dog Games, and Roundhouse Games (which is merging with ZeniMax Online Studios), Bond said the decision was “extraordinarilyy hard.” Closing studios and laying off staff helps Xbox have a “healthy” business, Bond said.

“When we looked at those fundamental trends we feel a deep responsibility to ensure the games we make, the devices we build the services we offer are there through moments, even when the industry isn’t growing. When you’re going through a time of transition,” she said. “The news we announced earlier this week is an outcome of that and our commitment to make sure that the business is healthy for the long term.

Bond pointed out that Xbox is home to large-scale games like Grand Theft Auto and relatively smaller titles like Palworld and Pentiment, and “that doesn’t change” going forward. Bond also noted that Microsoft is not giving up on Bethesda (which is no surprise given Microsoft spent $7.5 billion to buy its parent company, ZeniMax).

“Frankly our commitment to Bethesda and the role that it plays as part of Xbox and everything we do [is not changing]. Really right now for us and our teams, our focus is on the people impacted and doing everything we can do to help them through this hard transition,” she said.

Prior to closing the four Bethesda studios this week, Microsoft cut thousands of jobs within Xbox and Activision. Microsoft Gaming CEO Phil Spencer defended the cuts, saying investors want to see growth. Laying people off is a way to help appease investors and improve the overall Xbox business, he said.

“You get a lot of publicly traded companies that are in the industry that have to show their investors growth–because why else does somebody own a share of someone’s stock if it’s not going to grow?–the side of the business that then gets scrutinized is the cost side. Because if you’re not going to grow the revenue side, then the cost side becomes challenged,” he said.

Layoffs at Xbox are “really an outcome of an industry that’s not growing,” Spencer said. He went on to say he sees better days ahead.

“It can grow and it will grow again. But you see this time right now and the implications have human impact. And we should all reflect on that and think about it,” he said.