Microsoft's Xbox Division to Close Four Subsidiaries, Including Arkane Austin, Following Redfall Flop

Microsoft's Xbox division has announced the closure of four subsidiaries, including the renowned game studio Arkane Austin, following the disappointing performance of their latest release, Redfall.

This decision comes as part of a broader restructuring effort aimed at realigning resources and focusing on high-impact titles within the company's gaming portfolio.

Microsoft Halts Development on Redfall Amid Restructuring Efforts

According to a report by Bloomberg, Arkane Austin's most recent title, vampire co-op game Redfall, failed to meet expectations, marking it as one of Microsoft's biggest flops of the year. As a result, development on the game will be halted, and the studio will be shut down.

However, Microsoft has stated that the game servers will remain online, allowing players to continue enjoying the game, however without further updates. The company has also promised to provide compensation to players who had pre-purchased content that will now go unreleased.

Microsoft has disclosed that Redfall produced "minimal sales" according to a public filing by Microsoft and Activision in their 2023 lawsuit against the Federal Trade Commission, as reported by journalist Stephen Totilo on X.

In addition to Arkane Austin, Microsoft will also be closing three other subsidiaries: Alpha Dog Studios, Roundhouse Games, and Tango Gameworks. Alpha Dog Studios, known for creating Mighty Doom, will cease operations, with the game scheduled to sunset on August 7.

Roundhouse Games will be merged with ZeniMax Online Studios, the developer behind The Elder Scrolls Online, while Tango Gameworks will be shut down entirely.

Visitors stand at the Xbox booth at the Gamescom video game fair in Cologne, western Germany, on August 23, 2023. According to the organisers, around 1,100 exhibitors from 53 countries will be presenting their products during the fair running until August 27, 2023.

Xbox Game Studios Prioritizes Major Titles

The announcement was made by Matt Booty, head of Xbox Game Studios, in an internal email to employees (via IGN). Booty emphasized "reprioritization of titles and resources" or the importance of prioritizing high-impact titles and further investing in Bethesda's portfolio of blockbuster games.

He noted that while these changes would result in some job losses, Bethesda remains a 'key pillar' of Xbox, with several upcoming titles planned for release later this year, including The Elder Scrolls Online's Golden Road, Starfield Shattered Space, Fallout 76 Skyline Valley, and Indiana Jones and The Great Circle.

While Microsoft did not specify the extent of the job losses, substantial layoffs are expected. The decision to close these subsidiaries follows Microsoft's recent workforce reduction plans, which saw around 8% of its gaming workforce cut in January.

Despite the closures, some Bethesda studios remain unscathed, including Arkane Lyon, Bethesda Game Studios, and Machine Games, which are currently working on various projects, including Marvel's Blade and Indiana Jones and The Great Circle.

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