Video games are under attack from big business and Xbox is leading the charge-GameCentral-Entertainment – Metro

The irresponsibility of Xbox and PlayStation is out of control (Microsoft)

GameCentral ponders the announcement of studio closures at Xbox and asks why Microsoft and Sony are struggling while Nintendo thrives.

It is staggering to think that more than 10,000 video game developers have lost their jobs over the last 12 months. Gaming was booming during the pandemic, just a few short years ago, but the reasons for the ongoing tsunami of layoffs is not just because companies overstaffed and are now trying to return to the previous status quo. If there’s anything the last few months have made clear it’s that the status quo is never coming back, certainly not for Xbox and PlayStation.

On Tuesday, just a few months after laying off 1,900 people across its various developers, Xbox announced that it was closing down Redfall maker Arkane Austin, Hi-Fi Rush creator Tango Gameworks, Mighty Doom studio Alpha Dog Games, and was folding Prey (2006) developer Roundhouse Studios into ZeniMax Online Studios.

It’s not clear how many people will be losing their jobs this time but clearly it’s hundreds. Arkane Austin may seem like an obvious target after the failure of Redfall, but this time last year Xbox boss Phil Spencer said he was a ‘huge supporter of Arkane Austin.’ At the same time Xbox marketing head Aaron Greenberg insisted that, ‘Hi-Fi Rush was a breakout hit for us and our players in all key measurements and expectations. We couldn’t be happier with what the team at Tango Gameworks delivered with this surprise release.’

Xbox’s current crop of execs have always seemed to change their tune depending on whoever they’re talking to at the time but clearly the sands have shifted in the last year. Continually poor hardware sales are an obvious problem for Xbox but there’s also been a slow realisation that the games market has fundamentally changed.

Despite it being a trend as old as gaming itself, the cost of making triple-A game has been steadily increasing year-on-year and Microsoft, Sony, and other Western publishers have done absolutely nothing to combat the phenomenon. At the same time, younger gamers are being brought up on a diet of, usually free, live service games, to the point where many only play one or two titles and ignore the rest.

That’s not too different from casual gamers in previous generations only playing Call Of Duty and FIFA but at least the act of having to buy a new entry solidified the idea that games existed as discreet, self-contained packages. Instead, almost all the most popular live service games are over five years old and many are closer to a decade.

These are problems that both Microsoft and Sony should have been dealing with for years but instead both of them gave up the instant the issue became too big to ignore. It’s getting on for three years since Sony announced a new single-player game and yet it still hasn’t released any of the first party live service games it once promised. It’s been paralysed into inaction, relying purely on publishing games from other external developers or paying for third party exclusives (all of which, it has to be said, are very good).

Xbox hasn’t even had that small sign of life though. Starfield was a wet squib and, as usual for Microsoft, it’s always the next game which is going to turn things around, and when that fails the one after that. Xbox has been the nearly man of the games industry for decades now, which seems absurd given the resources at their disposal. And yet even after spending $69 billion on Activision Blizzard and almost $7.5 billion on Bethesda their position is actually worse than last generation.

They make more money now, thanks to Call Of Duty et al. but they’re forced to keep it and the other Activision Blizzard games multiformat, because there’s no way they’d ever make enough money to justify their purchase on just Xbox and PC. It’s still unclear what their wider multiformat strategy is, but at this point it wouldn’t surprise anyone if Starfield appeared on PlayStation 5 this year and Halo et al. shortly after.

Xbox faces the same problems as PlayStation and seem to have broadly the same solutions in terms of reducing the number of games they publish and, via Activision Blizzard, focusing on live service titles. But it now has the additional problem of having to justify its massive acquisition costs to investors.

It’s surely not a coincidence that the two triple-A studios to be shut down (Microsoft apparently couldn’t be bothered to seek a buyer for them) are those that have just finished low-key, original games. You can imagine how worried Ninja Theory must be at the thought of what will happen after they launch Hellblade 2, or Obsidian when they finished Avowed, or Undead Labs once State Of Decay 3 is done.

Rare seems like it should be safe, thanks to Sea Of Thieves, but it hasn’t released a new game in five years (it didn’t make Battletoads) and what is becoming clear is that the only thing Xbox is interested in now is proven IP. It didn’t buy Bethesda because of Arkane Studios, Tango Gameworks, MachineGames, or even Bethesda Game Studios but to own IP like The Elder Scrolls and Fallout.

As this week makes plain, Microsoft doesn’t care about individual developers, the talent that makes the games, only the franchises themselves. This isn’t a problem unique to Microsoft – Sony has shut down four studios in the last four years and if Bungie makes it to the end of the year we’ll be very much surprised – but because of the scale of the company the problems are amplified.

The irony of Microsoft’s announcements on Tuesday is that they came just a few hours after Nintendo confirmed it would unveil its new console within the next few months. They did so on the same day that the Nintendo Switch being crowned the most successful console of all-time became a real possibility, as the success of it and its many exclusive games were highlighted in the sort of hard sales figures that Microsoft has been refusing to make public since the Xbox One era.

Nintendo has never had any mass layoffs, now or at any time before. Instead, its executives famously took a pay cut during the dark days of the Wii U, a gesture which Phil Spencer and co. are clearly not going to emulate. In fact, rather than laying anyone off there’s been a spate of Japanese publishers increasing the basic wages of developers in order to attract new staff and encourage existing ones to remain with them.

The lack of layoffs is in part because of differing labour laws, but also because Japanese companies tend to spend less money on making their games and realise that not only is the business goal of infinite growth a nonsense but so too is the idea that you can keep spending more on more on making games and not quickly run into a brick wall.

The developers Xbox is laying off don’t only work on original IP but they’re best known for creating cheaper AA titles, which you would think is exactly the sort of thing that Microsoft and Sony would want to pivot towards. Instead, they’re moving away from them more quickly than ever. As far as their accountants are concerned it’s all or nothing, and that is pushing both of them, and the industry at large, closer to the abyss.

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Western video game companies are caught in a death spiral where they dismiss more and more games as not profitable enough, until they’re left with a perilously small list of titles that they have to hope will remain popular forever or their entire business collapses. The short-sightedness is breathtaking in its scale and its apparent lack of concern for the consequences of failure.

None of these issues are unique to Microsoft but where you would hope that they, as a format holder, would be attempting to reverse the trends and set a positive example they’re instead the worst perpetrator of all. There is no doubt that that the video games industry is currently in crisis and if Xbox and PlayStation don’t do something to effect sustainable change then an industry crash is beginning to seem both inevitable and imminent.

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