"There's no one size fits all to it for us." Xbox President Sarah Bond quizzed on why Hi-Fi Rush developer was closed

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The response doesn't really directly answer the question, but Bond did have some interesting statements about Xbox and its future.

Sarah Bond
(Image credit: Bloomberg)

What you need to know

  • Microsoft announced the closure of three studios this week: Arkane Austin, Alpha Dog Games, and Tango Gameworks, creators of the award-winning Hi-Fi Rush.
  • Sarah Bond, President of Xbox, appearing in an interview with Bloomberg and was asked specifically why Tango Gameworks was closed considering Hi-Fi Rush's success for the brand.
  • Bond's answer was that they look at a variety of factors when making decisions like this, and answered questions on the lack of video game industry growth, and it's impact on the business.

It's been a turbulent week for Xbox, to say the least, with its shock announcement of the closure of three game studios: Arkane Austin, Alpha Dog Games, and Tango Gameworks. Perhaps the hardest-hit of all three is the Hi-Fi Rush creator, Tango Gameworks, who has previously been lauded by Xbox executives themselves as a hit that pleased Xbox in all key measurements and expectations.

Hi-Fi Rush seemingly exceeded all expectations for Xbox (Image credit: Tango Gameworks)

Sarah Bond, President of Xbox appeared yesterday in a Bloomberg interview where she spoke about the launch of an Xbox mobile store but was also asked a couple of tough questions by the interviewer who said "I know you're not the studio's chief, but how should we, how should gamers, understand that move in terms of Microsoft's commitment to developing innovative, exclusive games?"

Bond: "You know, it's always extraordinarily hard when you have to make decisions like that. You know, I'll go back to what I was saying about the industry. And when we looked at those fundamental trends, we feel a deep responsibility to ensure that the games we make, the devices we build, the services that we offer, are there through moments even when the industry isn't growing, and when you're through a time of transition. And the news we announced earlier this week is an outcome of that—and our commitment to make sure that the business is healthy for the long term.  But that said, our commitment to having our own studios and working with partners to have games large and small. You know, we're a platform where you can play GTA, but you can also play Palworld where you can play Call of Duty, and you can also play Pentiment. That that doesn't change. And frankly, our commitment to Bethesda and the role that it plays is part of Xbox and everything we do."

Following some more chat about Indiana Jones and the Fallout TV show, the interview pressed Bond more specifically on the shuttering of Tango Gameworks.
"I think one of the things that was most upsetting both to Xbox gamers and to employees is that, you know, one of the shuttered studios in particular just created a hit game, did really well on Game Pass and in terms of engagement and won a ton of awards. Shouldn't exceeding in that ensure the future of the studio?"

Sarah Bond, being tasked with the job of being the first executive to answer this publically, said, "You know, one of the things I really love about the gaming industry is it's a creative art form, and it means that the situation and what successes for each game in the studio is also really unique. There's no one-size-fits-all to it for us. And so we look at each studio and each game team, and we look at a whole variety of factors when we're faced with making decisions and trade tradeoffs like that. But it all comes back to our long-term commitment to the games we create, the devices we build, the services, and ensuring that we're setting ourselves up to be able to deliver on those promises."

So there's our answer. On the surface, a nothingburger of an answer, as it didn't really directly address why Tango Gameworks specifically got the chop this week. Or did it? Despite the response to Hi-Fi Rush being Xbox's first real Game of the Year contender in recent times, perhaps Xbox just didn't see it as an essential part of its future. You can see the full interview below:

A tough industry

While we didn't get a direct answer the question on all of our minds right now, Bond did have more to say earlier in the interview on the video game industry right now, and it's stagnation, which gives important context to her answer here. By all important metrics, the industry isn't seeing the growth expected, in fact the most popular games last year were on average 7 years old and not new games.

The interviewer asked Bond what she thought caused this lack of growth and, more importantly, how Xbox could turn it around.

Bond "You know, the last year or so in video games, largely the industry's been flat. And even in 2023, we saw just some tremendous releases, tremendously groundbreaking games. But still, the growth didn't follow all of that. A lot of that's related to our need to bring new players in and make gaming more accessible. But all of that has been happening at the same time that the cost associated with making these beautiful triple-A blockbuster games is going up. And the time it takes to make them is going up.  And so, so much of our focus, as Xbox, is about how we do things to help the industry all up, while also ensuring that our brand, you know, everything that we do is there through this moment of transition."

One small piece of a rapidly moving puzzle

It's a shame we won't get a sequel to this incredible game.  (Image credit: Windows Central)

It's hard to pinpoint what direction Xbox is going at the moment. Following the studio closures this week, another exec, Matt Booty, reportedly told staff that Xbox needs "smaller games". This news, which came in amid reports that Xbox cuts might not be finished. While we can argue back and forth all day over whether Hi-Fi Rush is classified as a 'small game' or not, one thing's for sure, Xbox fans are not happy that Microsoft reportedly turned down a sequel. Something that to outsiders would have made complete sense. The discontent has been palpable ever since the announcement of previously exclusive games, which included Hi-Fi Rush amongst them, were going to be launched on PlayStation and Nintendo. A move that, so far, seems to have been successful, at least in the short term, with Sea of Thieves topping the most downloaded charts for April on PlayStation 5 in Europe.

Short-term is the key phrase here; what does any of the above mean for the long-term health of Xbox as a brand and creator of exclusive games? Only time will tell, and it remains to be seen what studios and games are left to see that future. Despite a somber week, we have Ninja Theory's HellBlade 2 on the verge of launching and the Xbox Showcase to look forward to. Are you staying strapped into this rollercoaster with the rest of us?

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Jennifer Young
Jennifer Young

Jen is a News Writer for Windows Central, focused on all things gaming and Microsoft. Anything slaying monsters with magical weapons will get a thumbs up such as Dark Souls, Dragon Age, Diablo, and Monster Hunter. When not playing games, she'll be watching a horror or trash reality TV show, she hasn't decided which of those categories the Kardashians fit into. You can follow Jen on Twitter @Jenbox360 for more Diablo fangirling and general moaning about British weather. 

2 Comments Comment from the forums
  • GraniteStateColin
    Pure speculation on my part (zero inside knowledge, and welcome corrections if anyone knows anything), but perhaps there were some personnel dynamics with the team after completing Hi-Fi Rush. Obviously, MS only made cuts that it thought were financially wise (whether we agree with their conclusions or not, that was their internal logic). If it believed Tango would put out a strong-selling sequel, in a reasonable timeframe and at a reasonable cost, they wouldn't shudder that studio. Had anyone recently quit that team or moved to another team that MS might have thought would cripple them going forward, or did anyone there make some demands that MS might have thought were bad for the long-term?

    Or, maybe between Redfall and the limited success for Starfield (compared with expectations), MS told Bethesda it had to make cuts of a certain amount. For its own internal reasons that we may never know, Bethesda kept who it wanted most and cut the rest.

    My take is that MS has a mindset that is not capable of giving proper weight to market perception and loyalty, that they don't properly factor the relatively low cost of keeping a customer for repeat business vs. the much higher cost of gaining a new customer. That does not necessarily mean that MS is wrong overall, just they have a very specific way of looking at problems in terms of productivity and growth. Anything that doesn't fit with their growth model, they tend to cut. I think this hurts them in the long-run as they alienate groups of customers who would otherwise throw money at them and spread positive word of mouth to evangelize the brand. But I could be miscalculating. Maybe MS is right that if a team or product can't deliver an X% internal rate of return over the next 5 years, it should be cut.

    While I think they're wrong, business history is full of companies who had a very simple strategy, often criticized at the time for their lack of nuance, who nevertheless did very, very well over the long-term. Those companies frequently credit their success to the simplicity of their decision-making logic -- that simplicity kept them fast and decisive, meaning that even if some individual decisions were bad, the aggregate effect was still a big net win. Maybe that's the case here. Certainly, MS overall success is indisputable. Maybe we're right that they should have stuck it out with Windows Phone or kept the Hi-Fi Rush team as individual decisions (those seem obviously bad to most of us strategists as outsiders), but if they second-guessed their over-arching decision drivers, and allowed themselves to make those exceptions, they would be worse off overall because that means they would have also probably kept a bunch of other stinkers and really hurt their growth.

    It's possible. I still think they have a strategy problem, but it's possible that they know their own business better than I do.
    Reply
  • fjtorres5591
    GraniteStateColin said:
    Pure speculation on my part (zero inside knowledge, and welcome corrections if anyone knows anything), but perhaps there were some personnel dynamics with the team after completing Hi-Fi Rush. Obviously, MS only made cuts that it thought were financially wise (whether we agree with their conclusions or not, that was their internal logic). If it believed Tango would put out a strong-selling sequel, in a reasonable timeframe and at a reasonable cost, they wouldn't shudder that studio. Had anyone recently quit that team or moved to another team that MS might have thought would cripple them going forward, or did anyone there make some demands that MS might have thought were bad for the long-term?

    Or, maybe between Redfall and the limited success for Starfield (compared with expectations), MS told Bethesda it had to make cuts of a certain amount. For its own internal reasons that we may never know, Bethesda kept who it wanted most and cut the rest.

    My take is that MS has a mindset that is not capable of giving proper weight to market perception and loyalty, that they don't properly factor the relatively low cost of keeping a customer for repeat business vs. the much higher cost of gaining a new customer. That does not necessarily mean that MS is wrong overall, just they have a very specific way of looking at problems in terms of productivity and growth. Anything that doesn't fit with their growth model, they tend to cut. I think this hurts them in the long-run as they alienate groups of customers who would otherwise throw money at them and spread positive word of mouth to evangelize the brand. But I could be miscalculating. Maybe MS is right that if a team or product can't deliver an X% internal rate of return over the next 5 years, it should be cut.

    While I think they're wrong, business history is full of companies who had a very simple strategy, often criticized at the time for their lack of nuance, who nevertheless did very, very well over the long-term. Those companies frequently credit their success to the simplicity of their decision-making logic -- that simplicity kept them fast and decisive, meaning that even if some individual decisions were bad, the aggregate effect was still a big net win. Maybe that's the case here. Certainly, MS overall success is indisputable. Maybe we're right that they should have stuck it out with Windows Phone or kept the Hi-Fi Rush team as individual decisions (those seem obviously bad to most of us strategists as outsiders), but if they second-guessed their over-arching decision drivers, and allowed themselves to make those exceptions, they would be worse off overall because that means they would have also probably kept a bunch of other stinkers and really hurt their growth.

    It's possible. I still think they have a strategy problem, but it's possible that they know their own business better than I do.
    Interesting look.
    Not much to disagree with.

    FWIW, I saw the Bond interview video.
    And it was clear she was uncomfortable, sticking to canned answers, and holding something back. MS is taking a lot of flack rather than offer up an excuse so all we can do is speculate.

    Your final point is key.
    They know their business, from the inside, better than anybody outside it.
    They know things like burn rates for all their studios, staffing levels, organizational structure, overhead costs, and *how they compare*.

    Microsoft, like most well run tech companies, routinely ranks employee performance annually and the bottom ranked are the first to go come times of change. Under Ballmer it was annually. Under Nadella, less often but not zero.

    XBOX until recently wasn't big enough to do without a full studio,no matter its "issues". Lionhead being the most notable exception. That is no longer true.

    Of note, none of the closed studios are known to have a new, high visibiity/near completion ongoing project. In other words, whatever might lie in those studios' pipeline, it wasn't coming until 2029 at best. Five years times their burn rate, likely over $100M each. Even for MS, $100M is not spare change.

    The data leaking via Bloomberg says TANGO and ARKANE Austin were *preparing* to propose new projects. Hifi Rush came out 15 months ago. And in that time they were doing what? Ditto for Auxtin.

    In the other thread I pointed out that XBOX had anywhere from 42 to 60+ development teams and even after excluding the live service games and the inminent (2024-26) releases, even Game Pass can't absorb all that output in *today's* economy. It could, in the world of 2021 when they *oportunistically* took advantage of ABK drama to pick it up on the cheap. (And make no mistake, it was a bargain.) In the interview, Bond pointed out that in 2023's historically great games lineup, the industry as a whole did *not* grow. More games going to the same number of gamers, while the development costs go up?

    Something had to give.
    And it did. And is.

    It may be a cliche, but "It's just business." A business where each studio is soaking up tens of millions each year with no guarantee of a profit after five ydars or more.

    Until the industry starts growing again, times will be tough on everybody.
    But especially for any group without a tech specialty (ID, BETHESDA SOFTWORKS, the COD studios, Blizzard, King) or a deep pipeline of games in process (ARCANE LYON, Obsidian, InXile, etc) is at risk. An even those will see their "duplicate" support personnel at risk.

    If that's not enough, remember "AI" will allow less people to do more work in '23 than in '21.

    Also remember that for consumers, gaming is *not* life or death; eating and housing is. If the economy goes on as is much longer, people won't be pining for 2021 but for 2024.

    So, why is MS quietly taking the flack?
    "The buck stops here." No point in blaming underperforming games. (Great reviews are no guarantee of sales, you know.)
    They don't want to spook investors in the midst of the AI hype.
    They expect Hellblade hype to paper over the outrage.
    The coming drama at other publishers will take over the news cyc!e.
    FALLOUT fever will boost their numbers.
    The june dog and pony show.
    The XBOX mobile store will launch in july.
    ABK games coming to Game Pass.
    Some COD on game pass. Maybe all.
    AVOWED.
    New COD.
    All of the above?

    Think of it as triage ahead of the summer hype season.
    Getting the bad news out of the way early.

    Just don't forget these may soon be "the good old days".
    (gulp)
    Reply