Microsoft has been scaling back its internal staff across the board and in games. But the software giant showed today that it’s still willing to invest in the game business by buying BigPark, a game development studio in Vancouver, Canada.
Terms of the deal haven’t been disclosed. The acquisition is significant because it shows Microsoft’s intention to keep investing in internally produced games for its Xbox 360 console, in spite of demands on its resources in its various fights with Google and Apple. Just this week, Microsoft said it completed layoffs of nearly 5,000 people, including about 28 percent of the staff of its Massive in-game advertising division.
The company is a distant second to Nintendo in the current generation of games, but its Entertainment & Devices division is profitable (or near profitable, as it reported a small loss in the last quarter) because Microsoft has invested so heavily in games.
It’s not hard to see why Microsoft decided to buy BigPark. Don Mattrick, head of the games division, owns a piece of BigPark and helped it get off the ground. Many of BigPark’s leaders go back to Distinctive Software, a company that Mattrick co-founded in the 1980s and sold to Electronic Arts in 1991. Microsoft said that Mattrick’s investment in BigPark was fully disclosed and the decision to buy BigPark was consistent with Microsoft’s code of conduct. Only individuals were investors in BigPark.
BigPark has 50 employees. It was founded in 2007 by Wil Mozell, Erik Kiss, Hanno Lemke and Mattrick (before he became Microsoft’s game chief). The team had worked for EA’s Vancouver studio on big hits such as “Need for Speed,” “FIFA Soccer,” “NBA Street,” and “SSX.” Big Park will be part of Microsoft Game Studios and continue work on an exclusive Xbox 360 game. One of the games will be showcased at E3 in June.
Lemke will report to Phil Spencer, who runs Microsoft Game Studios and who reports to Mattrick. Microsoft’s investment in games goes up and down. It invested in a bunch of game studios to get the Xbox off the ground, but not all of those were hit makers. So the company pared back on its internal studios. It bought outside development companies such as Rare and Peter Molyneux’s Lionhead Entertainment. But many game PC game studios have been cut, such as the Ensemble Studios team that made Age of Empires, the Flight Simulator studio, and the FASA studio that made Mech Warrior games. It has also spun out Bungie, the maker of the Halo series, into a separate company where Microsoft owns a stake.
Viewed from the outside, it seems Microsoft is constantly tuning the dials on its game business. Its commitment to games is big, though perhaps not as big as that of Sony and Nintendo.