Microsoft CEO Satya Nadella has said he feels “fantastic” about Xbox’s remaining roster of studios and IPs and called recent “streamlining” of the business “great to see”.
Commenting on the state of the Xbox business in a Sources Podcast episode, Nadella reiterated new Xbox CEO Asha Sharma’s objective to return the gaming business to growth by focusing on its biggest games and exploring new business models.
“If I look at the studios, the IP portfolio we have, and our ability to then take that and produce great games going forward, I feel fantastic,” Nadella said.
“There’s some amount of streamlining the team is doing, and Asha is doing, which is great to see. And then we have to invent the right sustainable business model that allows us to deliver gaming to more and more people.”
He continued: “That has always been the goal, which is we want to be a great publisher and a great platform provider for games across both PCs and Xboxes. And so that is sort of our goal.
“And I think Asha and team have said that Xbox is going to get back to growth this next fiscal year, and that’s the plan they’re executing on. And in that process, do a bang-up job of producing some great games.”
Nadella’s comments follow widespread layoffs and cuts
This summer, Microsoft enacted sweeping layoffs across the Xbox business, initially affecting 1,600 jobs, with another 1,600 planned by the end of Microsoft’s business year. The second wave of these cuts, which Microsoft claims are around 75% complete, took place this week.
Notably, Halo Studios has been significantly cut, with the Halo IP moved to Activision, alongside Sea of Thieves developer Rare. Other studios have also been redeployed around the gaming business, including Obsidian, which has been moved to Bethesda.
British Hellblade studio Ninja Theory looks set to be closed after proposed sales fell through. Double Fine, Compulsion Games, and Undead Labs have left Microsoft ownership completely, while Marvel’s Blade and Dishonored studio Arkane remains for sale.
Speaking in an interview with the BBC discussing Double Fine’s departure from Xbox and return to full independence, founder Tim Schafer said he didn’t know why the games industry hasn’t seen a positive change in fortunes for a while, but assumes it’s due to greed.
“I don’t understand the economics of making games to be honest,” Schafer explained. “I often for years thought I understood them, because there are layoffs, which is bad, and then the people who make games realize, ‘oh, we need people to make games’, the executives are like ‘oh, we fired everybody, we need some people to make this game’, they hire them back, and then they… you know.”
