Microsoft has shut its Xbox Entertainment Studio, the division set up in February 2013 to create original televisual content for Xbox One and other platforms. The corporation is in the process of a major cost-cutting plan, which will cut 18,000 jobs across the entire company.
In a memo to employees, reported by industry site MCV, Xbox chief Phil Spencer confirmed that the studio would be closing but added that current projects would be completed.
A documentary series named "Signal To Noise" about the history of Atari, a live-action Halo TV series and the Halo: Nightfall web series that accompanies the release of the Halo: Master Chief Collection, will all be completed. It's doubtful, however, whether the Halo television series will go into another season.
Also safe is Quantum Break, a much-anticipated "transmedia" project, which combines an action adventure game from developer Remedy Entertainment with an interconnected TV series.
In a statement released to US news site Polygon, a Microsoft spokesperson said, "[Quantum Break] will be released next year and the game and show both remain on track. The news of Xbox Entertainment Studios has not impacted our progress."
Since Satya Nadella took over as Microsoft CEO in February, there has been consistent speculation that he might jettison the Xbox division in its entirety to cut costs. However, the executive has confirmed in several interviews that the division is safe.
Microsoft has always envisaged Xbox One as a multimedia hub and made live television and video-on-demand services a key focus during its press event to announce the console last May. In his memo Spencer stated, “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."
Increasingly, console manufacturers have been considering the model of developing original TV content, which has been explored successful by Netflix and Amazon. At the E3 games event in June, Sony announced that it would be developing a TV series for PlayStation owners, based around the Marvel comic, Powers.
Xbox Entertainment Studios is reported to have employed 200 staff and had ambitious plans, but according to news site Re/Code, insiders claimed that the business model was not working:
Sources paint a picture of a disorganized studio that struggles to close deals and lacks a fully fleshed-out business model. This inability to execute has turned off potential studio partners, they say, complicating the process of securing premium content.
Microsoft is due to reveal more details of its ambitious Quantum Break project at the Gamescom gaming exhibition in Cologne in August.
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