Microsoft are shutting down the studios that made Prey, Redfall and Hi-Fi Rush

Microsoft are shutting down multiple game studios including Redfall developers Arkane Austin and the creators of Hi-Fi Rush, Tango Gameworks. The news was delivered via an email to staff from Xbox boss Matt Booty which has since been seen by IGN. Booty calls the decision a "consolidation of our Bethesda studio teams, so that we can invest more deeply in our portfolio of games and new IP."

Other studios to be hit are Mighty Dog Studios (makers of mobile Doom spin-off Mighty Doom) and Roundhouse Games, which will have its workforce transferred to Zenimax Online Studios, the developers at work on Elder Scrolls Online.

Following the difficult release of the vampire shooter last year, Matt Booty indicated that Arkane Austin was not in danger of closure. "“It was a miss, but how much of a miss?” he told Axios in an interview in June 2023. “I want to support them to be able to keep working to deliver the game they had in mind.”

Redfall's most recent update was its final one, said the internal memo this week.

The Hi-Fi Rush creators Tango Gameworks were also responsible for the well-liked horror titles The Evil Within and Tokyo: Ghostwire. Alongside these losses, some publishing roles have also been axed.

"A small number of roles across select Bethesda publishing and corporate teams will also be eliminated," added Booty, who is currently head of Xbox Game Studios. The email to staff laid out the job losses and studio closures in more detail, before asking remaining workers to "please treat your departing colleagues with respect and compassion".

"These changes are not a reflection of the creativity and skill of the talented individuals at these teams or the risks they took to try new things," writes Booty. "I acknowledge that these changes are also disruptive to the various support teams across ZeniMax and Bethesda that bring our games to market. We are making these tough decisions to create capacity to increase investment in other parts of our portfolio and focus on our priority games."

There has been a general increase in layoffs over the last year or two as the slow results of massive mergers and corporate consolidation become clear. This is certainly not new behaviour from Microsoft who earlier this year decided to lay off 1900 people and who, last year, announced the dismissal of an astounding 10,000 workers.

Studio closures likewise seem to be occuring with greater frequency. Just last week saw the reported closure of Roll7, creators of the excellent OlliOlli World, as well as mass layoffs at Intercept, the studio in charge of Kerbal Space Program 2.