Text/Melbourne Johnson [www.gamermarch.com of the Aircraft Club (please indicate the source for reprinting)]
"For almost 10 years, Xbox has been repeating a serious strategy mistake. The root cause behind this is that there is a confusion in their prioritization of what is important. Looking back at the glory of the Xbox 360 era, it seems that it has become out of reach. Eurogamer editor Chris Tapsell writes that Xbox's core values have been lost.
Recently, Xbox shocked the industry by announcing the closure of three studios and changing the role of another studio to a team supporting a certain service-based game. The decision comes after Xbox laid off 1,900 employees earlier this year and is part of Microsoft's 10,000 layoffs the previous year, with Xbox team members quietly involved. This is undoubtedly a self-sabotaging PR disaster, especially when these studios have such a high reputation.
Arkane Austin was challenged with unconventional co-op and online shooter elements when developing Redfall, but they had previously produced a successful 2017 critically acclaimed Reboot of Prey, as well as the groundbreaking Dishonored series, which ushered in a modern renaissance of immersive sims. Tango Gameworks is Microsoft's only studio in Japan, led by horror game master Shinji Mikami (Mikami left the studio in 2023 for unknown reasons), who produced the Evil Within series and the BAFTA award-winning innovation Hi-Fi Rush. Roundhouse Studios was founded by members of the original Prey team, but may now only be able to design different colors of leather gear for The Elder Scrolls Online. Alpha Dog, on the other hand, focuses on developing mobile games, an area that Microsoft has been actively expanding. Looking more broadly, Xbox has struggled with a lack of innovation and compelling exclusives across two console generations. Despite this, these studios were only acquired in 2021. If it weren't for the people involved, these closures would have been seen as almost routine operations in 2024. Of course, this isn't the end of the road for Xbox – next month in Los Angeles, it will host a pivotal press conference to lay out new plans for saving the lost generation. But whether it's out of anger, exhaustion, or the pent-up anger of the industry as a whole – it seems like a low point. Xbox has been standing still for the past decade, moving from one strategic pivot to another, from one acquisition to another, from shutdown to closure. The good times always seem to be within reach, yet out of reach.
Project Scorpio may set the tone for the future of Xbox; Game Pass represents the direction of the future; Series X will bring the game; Starfield, while currently stagnant, is expected to boost Game Pass. However, these beautiful visions may never come to fruition.
(Pictured, Chri Tapsell suspects something is wrong with Xbox's long-term strategy)
Now, the immediate response is anger and dissatisfaction. It's always unpleasant to close studios, but it's even more ridiculous to close award-winning, talented, and professional studios. Just like Take-Two recently closed studios Roll7 (OlliOlli) and Squad (Kerbal Space Program). But compared to the case of Microsoft and Xbox, this seems to be only part of a much bigger problem. Looking back at Xbox's modern history – from the end of the 360 era, through the tough years of Xbox One, to today – a clear pattern can be found. This is a platform holder who has lost its way and purpose, and it may inevitably misunderstand the root cause of its existence, given the size of its parent company.
Think about what is the fundamental purpose of any entertainment company? In short: provide entertainment. Game development studios were founded to create games, production companies to make movies, football clubs were formed to allow people to participate and watch football matches, record labels were created to allow people to enjoy music, and restaurants were created to provide good food and dining out experiences.
Platform holders, i.e., game console manufacturers and video game producers, have the same origins as toy manufacturers, card printers, and arcade cabinet manufacturers, with the fundamental purpose of providing people with games, as well as the joy and excitement that games bring, as well as the hardware needed to play them. Satoru Iwata once said after the release of the Wii in 2006, "Nintendo's mission is to make people happy and make people smile." ”
So, what are the core values of Xbox?
Looking back over the past decade or so, from the end of the golden age of 360 to the beginning of the Xbox One, the answer begins to become clear.
Xbox's core value clearly lies in achieving massive growth, with the goal of making more profits than the previous year.
On the eve of the Hi-Fi Rush game, its production team expressed their appreciation for the studio's state of prosperity and the creative freedom they enjoyed. However, this seems to have become a thing of the past. Let's take a look back at a strategic blunder of Xbox in 2013 that has a striking connection to its current challenges. Let's start with a controversial presentation at E3 2013, when Don Mattrick, the head of Xbox, announced the grand blueprint for Xbox One. The device is designed to be an all-encompassing home entertainment center, which is actually quite a forward-thinking and fun idea – even though it forces an expensive and unpopular Kinect device to be bundled. Xbox One's emphasis on non-gaming features gives the impression that Xbox is neglecting its core player base compared to PlayStation's strategy of focusing on traditional big video games and more graphically powerful consoles.
This strategic misstep marks a step backwards in Microsoft's Xbox strategy. Microsoft is trying to expand its user base by merging rather than adding to its core products, rather than creating more engaging games and new ways to play to meet the needs of its core players.
(Pictured, poster of "Fable of Spirits" by Lionhead Studio)
The deeper problem is that Microsoft has a misunderstanding of where Xbox is headed. Take, for example, the famous game developer Lionhead Studios (Fable), which closed in 2016, and the cancellation of the Fable Legends game, which was originally planned to be released in the same year. Around 2012, Microsoft decided to transform the studio, known for its single-player role-playing games (RPGs), from the genre it specializes in, to developing free-to-play, multiplayer online service games like Fable Legends, according to an in-depth Eurogamer report.
While the Fable franchise is profitable — "very profitable," according to Lionhead's Simon Carter told Eurogamer — it doesn't seem to be profitable enough for Microsoft and its genre. "That type of market isn't the biggest," said Robbie Bach, who previously served as president of Microsoft's Entertainment and Devices division before Don Mattrick. "It's not as popular as football or American football. It's not as big a market as first-person shooters. So from a business point of view, it's a success, but it's not extremely successful. "Microsoft is looking for great success. Fable 4's proposal was rejected. "Like, you've reached the limit of RPG players on Xbox and you need to find a way to double that number, and you're not going to do that with RPGs," Fable's art director, John McCormack, told Eurogamer at the time. "I think, yes, we can do it. I said, look, just give us four years and the right amount of money, like Mass Effect and The Elder Scrolls Online: Skyrim had at the time. They got four years and a lot of budget. Give us that one and we'll bring you the players you want. No, you've tried it three times and you've just tripled your investment. This is not enough. Go away. That's where I'm angry. (Notably, as of June 2023, Skyrim has sold 63 million copies, while The Witcher 3 has surpassed 50 million.) Lionhead was forced to pivot to a game genre it was unfamiliar with, leading to employee turnover, including McCormack, Peter Molyneux, and the entire senior leadership team. It struggled with development, especially on unfamiliar concepts like monetization and multiplayer balancing. At the same time, Microsoft has also used it as a model to showcase various new initiatives, from being part of the Windows 10 game ("We didn't know about Windows 10 when we started working on Fable Legends," one source told Eurogamer in 2016) to showcasing the new graphics potential of DirectX 12. The development cost of the free model was relatively low, and it became a dependency at the time.
(Photo, Hideki Kamiya (left) and Hideo Kojima)
A year after Lionhead's woes, the highly anticipated exclusive Scalebound was also canceled for a similar reason. It's a third-person action RPG from PlatinumGames, the company behind Bayonetta — which for some reason was designed to require online co-op — and the team is once again challenged with unfamiliar multiplayer elements. As Hideki Kamiya, the former producer of Platinum Studios, put it, the studio "lacked the knowledge needed to build a game based on online features," which ultimately led to the game's cancellation — again, in the year it was scheduled to launch. The quest for scale doesn't stop. Game Pass launched in the same year and before its full launch in 2018. It bundled an aggressive user acquisition plan – at some point, users could get a three-month subscription for £1 – and announced a goal to "reach over 3 billion gamers worldwide," Ben Decker, head of marketing for Xbox Game Services, said in 2021. Microsoft, essentially a software company and increasingly reliant on cloud computing, has partnered with South Korea's SK Telecom to launch a soft launch of its game streaming service on xCloud. "Every screen can be an Xbox," Xbox president Sarah Bond told employees a few months ago, showcasing Palu, a Game Pass game that was unexpectedly popular on tablets, TVs and phones.
Once again, however, the quest for huge, sensational growth seems doomed. Game Pass has steadily added about five million subscribers per year since 2017, reaching around 34 million as of early 2024. This is a very respectable achievement, especially since the price increase and the £1 discount have disappeared – which is still a long way from the ambitious goal of 3 billion gamers worldwide.
In a recent conversation, Phil Spencer revealed to the Wall Street Journal that the console market is close to saturation, meaning a limited number of potential new users. He hinted that if Xbox could increase sales from the start, it could help the current situation. Currently, Xbox Series X and S are selling about half as much as PS5, suggesting that Xbox needs to boost sales and subscriptions by making engaging games.
It's a cliché that Xbox is lacking in game development, but it's a problem that goes hand in hand with sales and subscription growth. Xbox seems to have failed to launch a hugely successful game, mainly because it didn't prioritize game development. As the operator of the gaming platform, Xbox should provide a stable environment for game developers to take the risk of innovation.
This is something they find difficult to find elsewhere. This includes recruiting and retaining talent, giving them the freedom and room to experiment while accepting the possibility of failure.
However, Xbox's corporate culture doesn't seem to encourage this stability and innovation. If a game doesn't perform well, the team may be at risk of disbanding, which will undoubtedly inhibit the developer's spirit of innovation. This culture leads to conservative and risk-averse attitudes, which ultimately leads to the depletion of ideas. We've seen some of the game projects that were originally potential, such as Lionhead's free-to-play multiplayer, and 343 Industries' Halo series, suffer.
Phil Spencer stressed that the purpose of acquiring studios is to help them expand on their existing strengths, not just to accelerate the growth of Xbox itself. However, some decisions in recent years, such as the closure of the Lionhead studio, seem to be at odds with this philosophy. The contrast between Microsoft Studios' statement and Phil Spencer's remarks reveals the company's strategic contradictions.
Despite this, Xbox is still trying to find a breakthrough, launching some off-the-beaten-path and innovative games such as Jedi Diver 2, which took eight years in development. However, it remains a challenge for Xbox to maintain continuous development and release without sacrificing innovation and quality. The remarks of Hanno Lemke and Phil Spencer, former general managers of Microsoft Studios Europe, as well as recent reports of cost-cutting and studio consolidation, suggest that Xbox is struggling to balance its business strategy while pursuing high-impact games. Jill Braff, head of Zenimax Studios (the parent company of "Roll 5" developer B Company), mentioned that the company needed a more centralized team to support a global network of studios to avoid over-spreading resources. These discussions and decisions reflect Xbox's complex balance between pursuing innovation and commercial success.
"Microsoft's decision to close some of its studios after spending $7.5 billion to acquire a number of game studios is ironic. While this may seem like an absurd decision, it may also be based on a strategic consideration shared by Microsoft and Zenimax, which is a difficult choice to make in order to streamline the business.
(Pictured, Xbox Marketing Director Greenberg (left) and Phil Spencer in front of Zenimax headquarters, May 2021)
Even more puzzlingly, it was reported that Microsoft and Zenimax revealed to employees that the main reason for closing the Tango and Arkane Austin studios was that both companies were working on new projects that required the expansion of their teams and the investment of a lot of time in development. Tango Gameworks is planning a sequel to Hi-Fi Rush, while Arkane Austin is interested in returning to its iconic immersive sim, possibly a new Dishonored franchise. Ironically, Xbox chose to close these studios precisely because they were working on developing new video games.
Looking at the closure of the Lionhead studio, the official has never given a clear explanation. Employees have all sorts of speculations, with cost cutting being a common reason. According to insiders, Microsoft's performance in the gaming space has been unsatisfactory, and this may be the case in any year in the past decade. Obviously, neither Fable Legends nor Redfall's attempts are likely to be profitable. There's another fact that can't be overlooked: Lionhead, like Arkane Austin and Tango Gameworks, was looking forward to jumping right into the next big game in its iconic franchise, like Fable 4.
The core problem is that this pattern has been repeating itself and seems to show no sign of an end. Xbox took in talent, but mismanaged it in pursuit of unrealistic scale and eventually had to give up. Whether it's the veteran experts of the Fable series, the experienced production team of the Dishonored series, or the young and energetic team behind Hi-Fi Rush, they have not been spared. Xbox's management is clearly aware of the problem. When Phil Spencer and Sarah Bond said they were reflecting on the closure of Lionhead and pledged not to repeat the mistakes of the past, they were serious. However, to truly solve the problem, they needed to dig deeper into the underlying reasons behind the closure of the studio, not just the decisions themselves, but the principles that guided those decisions. These principles reflect the underestimation of expertise, creativity and talent compared to the cost of allowing these talents and ideas to flourish.
The common denominator that connects these events is obvious. The idea of a successful video game platform should be to monetize the development of more consoles and games. However, Microsoft's Xbox philosophy seems to be that its main purpose in developing consoles and games is to make a profit. As with many businesses owned by large, publicly traded companies, Xbox seems to be stuck in a kind of cart-in-the-cart cycle. Finally, Chris Tapsell said he suspects that Xbox, and the video game industry as a whole, have forgotten why they existed in the first place. ”
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Microsoft Game Studios
Introduction: Microsoft Game Studios (MGS), formerly known as Microsoft Game Division, has been using its current trademark and name since 2002 and is a wholly owned subsidiary of Microsoft that develops and publishes games for Windows-based PCs and Xbox and Xbox 360 consoles. MGS publishes games for several Microsoft-owned first-party developers, including Bungie Studios and Rare, as well as games made by third-party developers such as Bioware and Bizarre Creations.
Founded: 2002
Headquarters: Redmond, Washington, USA
代表作品：Xbox 360，Xbox One，Xbox One Serious
The first release of Microsoft's first-party studio titles will be added to the XGP subscription list.