Arkane Austin and Tango Gameworks were reportedly in the midst of pitching sequels to two beloved titles – Hi-Fi Rush 2 and a potential new Dishonored game – when Microsoft blindsided everyone by announcing the closure of these studios. Bloomberg’s Jason Schreier, citing insider sources, revealed that Arkane had been eager to return to its roots after the lukewarm reception of Redfall and had presented a proposal for a new single-player ‘immersive sim,’ potentially another Dishonored installment, to Xbox executives.
Similarly, Tango Gameworks was also in the pitching phase, aiming for a sequel to last year’s successful rhythm-action game, Hi-Fi Rush, which Microsoft had hailed as one of Bethesda and Xbox’s standout launches in recent memory.
Unfortunately, with the abrupt closure of both studios, these pitches will never see the light of day. While Microsoft’s reasoning for the closures remains ambiguous, Xbox president Matt Booty and ZeniMax studios head Jill Braff addressed ZeniMax employees in a townhall meeting. Booty praised Hi-Fi Rush during the gathering but refrained from elaborating on why Tango Gameworks was shut down. He asserted that Arkane Austin’s closure had nothing to do with Redfall’s underperformance.
Booty indicated that the decision to close certain studios stemmed from ZeniMax’s stretched resources and the need to prioritize projects. Braff suggested that Arkane and Tango Gameworks’ requests for additional staff during the pitching process were significant factors in the closures, expressing optimism that ZeniMax’s reorganization would streamline focus on fewer projects.
According to Bloomberg, the studio closures are part of a broader cost-cutting initiative at Xbox, with more cuts expected. Microsoft has begun offering voluntary severance agreements to various ZeniMax employees, and there are indications that additional layoffs are imminent.
These recent closures follow Microsoft’s earlier decision to lay off 1,900 Xbox employees. While the backlash has been widespread, with Arkane Lyon’s Dinga Bakaba calling the move a “fucking gut stab,” former Blizzard president Mike Ybarra has voiced support for Xbox head Phil Spencer, acknowledging the difficulty of the situation for all involved.
