Xbox CEO Asha Sharma reportedly warned staff that the division “will not survive” without new intellectual property. That message comes as Microsoft has withdrawn funding from four studios that made new games and divested from several others.
Sharma spoke at an Xbox town hall last week. Windows Central obtained unauthorized transcripts, which quote her saying the company was backing its strongest franchises and wanted its great games to become “great global billion-dollar franchises.” Xbox is shifting development of the Halo series to Activision, the publisher behind Call of Duty. Activision has regularly released new games, though their quality has varied widely.
Sharma reportedly added, “We will not survive if we only revive the past. We have to find new ways, and courage, to have invention on new IP, that reaches new sets of audiences.” Her argument is that Xbox cannot depend on established franchises forever. But Microsoft ended funding for Double Fine, Ninja Theory, Compulsion Games, and Undead Labs, each of which had created new IP for the company. Three studios arranged management buyouts to avoid closure; Ninja Theory did not.
Their games show the kind of new work those studios produced. Double Fine released Kiln, a multiplayer action game about pottery, and Keeper, which puts players in control of a sentient lighthouse. Ninja Theory made the Hellblade series, and Undead Labs worked on State of Decay. Compulsion Games developed South of Midnight, a fantastical action-adventure set in the American South with a look inspired by stop-motion animation.
Other studio changes raise similar concerns. Obsidian Entertainment is being moved under Bethesda while developing a new Fallout game. That shift prompts questions about whether Obsidian can continue making distinctive projects such as Pentiment while handling Fallout and Elder Scrolls sequels. Arkane Studios, currently negotiating with Microsoft about its future, created Deathloop and is developing Marvel’s Blade. Microsoft reportedly cut id Software’s staff to half its former size, which the source says makes further Doom games a tall order.
The four studios that lost Microsoft funding had each created new IP, including games as different as Kiln, Keeper, and South of Midnight. Their cuts put Sharma’s call for new franchises alongside the loss of teams that had made them.
