Microsoft announced that 14,000 layoffs are coming and said it would shut down its Xbox Entertainment Studios division. That means Microsoft is giving up on original programming of TV shows for its entertainment platforms such as the Xbox One.
However, Microsoft said that previously announced shows will continue to be produced — including a digital film series and a separate TV show based on its spectacularly successful Halo sci-fi video game series, which has generated billions of dollars and sold 50 million copies.
In a statement, Microsoft said, “Nancy Tellem, Jordan Levin and some of the XES team will stay on and remain committed to original programming already in production like the upcoming documentary series Signal to Noise, whose first installment takes on the rise and fall of gaming icon Atari, and, of course, the upcoming game franchise series Halo: Nightfall and the Halo television series which will continue as planned with 343 Industries.”
The decision from Microsoft’s new CEO, Satya Nadella, means that Microsoft won’t spend its resources on becoming the next big digital Hollywood entertainment company. But it does show that it will continue to produce shows that are relevant to its audience of 48 million Xbox Live gamers who view entertainment on their Xbox One and Xbox 360 game consoles.
Filmmaker Steven Spielberg is the executive producer of the live-action TV series, which Microsoft’s 343 Industries game studio (which inherited Halo from Bungie) and Spielberg’s Amblin Television are partnering to create. Showtime was rumored to be in the running to get the show.
Another Halo project is a “digital feature” from 343 Industries and famed director Ridley Scott’s Scott Free Productions that’s set to release later this year. The project’s executive producers are Scott and Scott Free TV president David Zucker. Sergio Mimica-Gezzan (Battlestar Galactica, The Pillars of the Earth, Heroes) is directing the show.
Still, it doesn’t look good for the future of game-TV combinations. Microsoft’s Tellem and Levin recently said they were considering offering even more shows based on game properties. Microsoft did not comment on other shows that have been announced aside from the ones above.
Phil Spencer, the head of the Xbox business, issued a statement in a follow-up to Satya’s announcement. In that, he confirmed that the Xbox Entertainment Studios will close but noted the shows that will continue.
Here’s the full statement from Spencer.
I hope you have had a chance to read today’s mails from Satya. I wanted to take a moment to share a few thoughts on what this means for our team and some of the changes we are making as a result.
In last week’s mail outlining some of the steps towards creating the culture and organization to bring our ambitions to life, Satya called out the strategic importance of Xbox as a strong consumer brand, a creative center for gaming and a leader in bold innovation. Every member of Team Xbox should be incredibly proud of the impact and reach your work has within the walls of Microsoft, with our developer community and most importantly, with consumers.
Microsoft is the productivity and platform company for a mobile-first and cloud-first world, and games are the single biggest digital life category in a mobile-first world. Success in this category, by growing a robust Xbox business, brings additional value to Microsoft. I have stated this before, but for Xbox to be successful, we must remain committed to being a consumer-driven organization with the mission of meeting the high expectations of a passionate fan base, to create the best games and to drive technical innovation.
As part of the planned reduction to our overall workforce announced today and in light of our organization’s mission, we plan to streamline a handful of portfolio and engineering development efforts across Xbox. One such plan is that, in the coming months, we expect to close Xbox Entertainment Studios. I would like to take this opportunity to recognize the accomplishments from the entire team in XES. They have built an impressive slate of original programming and pioneered interactive entertainment on Xbox, such as the innovative reality series Every Street United that succeeded in uniting audiences around the globe during the recent World Cup. I am pleased that Nancy, Jordan and members of the XES team remain committed to new, original programming already in production like the upcoming documentary series Signal to Noise whose first installment takes on the rise and fall of gaming icon Atari and of course, the upcoming game franchise series Halo: Nightfall and the Halo television series which will continue as planned with 343 Industries. Xbox will continue to support and deliver interactive sports content like “NFL on Xbox,” and we will continue to enhance our entertainment offering on console by innovating the TV experience through the monthly console updates. Additionally, our app partnerships with world-class content providers bringing entertainment, sports and TV content to Xbox customers around the world are not impacted by this organizational change in any way and remain an important component of our Xbox strategy.
Change is never easy, but I believe the changes announced today help us better align with our long-term goals. We have an incredible opportunity ahead of us to define what the next generation of gaming looks like for the growing Xbox community. I have a great deal of confidence in this team and know that with clarity of focus on our mission and our customers we can accomplish great things together. We already have.
Thank you again for all you do for Xbox.