Xbox disaster | Edge

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Microsoft closed out its Summer Gaming Festival with a bang. Company Annual June exhibition It was full of crowd pleasers: aura, Gears of war, mythThe Xbox is transparent, and even some of the pleasant surprises are like new a personality and Crazy taxi games. It was the kind of event reminiscent of the heady days of E3, when the industry was in better shape and game shows were cultural events.

Only three days after the show New Xbox CEO Asha Sharma has warned Of “resetting” Microsoft’s gaming division, which requires “making tough choices.” The weeks that followed were filled with reports of impending layoffs, studio closures, and game cancellations. Ninja theory It is said to be one of the studios on the chopping blockalthough there is only Revealing a new game in SGF. If all of this happens, Xbox will be a mere shell of what it once was.

After aggressively making its way into the console space nearly 25 years ago, Microsoft’s gaming division is at an all-time low. The repercussions of some disastrous decisions will become very ugly in the coming weeks and months.

It wasn’t always this way. With the arrival of the original Xbox in 2001, Microsoft seemed poised to be a strong competitor in this space, with all its resources helping it catch up to the likes of Sony and Nintendo. Major exclusives such as aura The foray into online play through Xbox Live helped cement that position for some time. But Microsoft missed the launch of the Xbox One in 2013 with a decision The ill-fated push to non-gaming features like TVand the brand never recovered. with Often confusing Xbox Series The company is more late.

There are many reasons for this, but arguably the most damaging is Microsoft’s extremely expensive push into subscription services. On paper it made some sense: streaming services like Netflix were turning the movie and TV landscape upside down, so maybe the same will happen for gaming. Microsoft has made some huge bets on this uncertain future, spending billions of dollars to acquire studios and publishers in an attempt to create a large library of content for Game Pass that will attract subscribers.

While Game Pass initially proved popular, it eventually plateaued, meaning Microsoft spent all that money on a company that didn’t grow as much as expected. (The service currently has about 30 million subscribers, While Microsoft hoped that the number would reach 100 million by 2030.) This misleading play also coincided with “This is the XboxA marketing campaign, which implied that Xbox was not a single console but rather a group of devices that supported Game Pass, led to further confusion around the brand.

How bad are things? Like Sharma and Xbox Chief Content Officer Matt Botti “Reset,” he wrote in a note.“Excluding Activision Blizzard King, over the past five years, we’ve spent more than $20 billion on ongoing investments in content, platform, and hardware support, but our annual revenues have declined by nearly half a billion over that period. Going forward, this cannot continue.” The Activision deal, meanwhile, At a cost of $68.7 billion. The company spent all this money Just to make it a little less obvious what an Xbox is.

Last February, there was a big change in the Xbox department. Former president Phil Spencer, who oversaw the brand through the Game Pass campaign and numerous expensive acquisitions, retiredwhile Former President and COO Sarah Bond has left the company. Despite some uncertainty about her lack of experience in the gaming world — her previous role at Microsoft was head of CoreAI — Sharma’s early days have provided some reasons for optimism. She seemed ready to listen to fans Things like backward compatibility and exclusivity, Microsoft has scrapped the unpopular Gaming brand in favor of Xbox onlyand Moving the brand away from controversial AI features. It also made some strange and superficial changes, e.g Xbox redesigned as XBOX.

But it’s clear that the problems with Xbox run much deeper than what a simple name change can fix. Sharma had inherited a company that had spent huge sums of money and had little to gain, and now the bill was due. What makes this particularly tragic is the sheer proportions of game studios being affected. My colleague Tom Warren reported That Microsoft was considering shutting down at least five studios, which includes the likes of Arkane – famous for its huge influence Insulted series – and Double Fine Productions, the beloved team behind such popular hits as PsychonautsAnd recently a guard and oven. These are multiple teams full of talented individuals responsible for some of the most notable games of all time. And now they are being excluded because of bad decisions in which they had no role.

But even amid this horrific landscape, Xbox’s problems feel particularly existential. Its hardware and subscription businesses are faltering, and now it’s killing off its game development teams as well. Tom said the impending layoffs are expected to begin next week, and it’s not yet clear how widespread they will be. Part of the uncertainty is that we don’t know exactly what will happen to these studios; Some may experience layoffs, others may close completely, and others may be spun off as independent entities.

Whatever happens, Xbox will look completely different once it’s finished. And he gave The sorry state of console gamingThese may not be the last changes for Microsoft’s gaming division.