
Microsoft to Shutter Xbox Entertainment Studios - blacktulip
http://recode.net/2014/07/17/microsoft-to-shut-down-xbox-entertainment-studios/
======
jonnathanson
I'd been watching this subject with great interest when MSFT first made the
announcement several years ago. And watching hopefully, at that. XBox Live
accounts for a large share of Netflix streaming usage, and in theory, MSFT
could have developed shows the way Netflix is doing so. Unfortunately, as a
lot of people in this space are learning, high-quality shows cost top dollar
and take awhile to develop. They require a unified, sustained political
commitment from the company, all the way up to top brass.

Netflix is able to develop shows because Netflix's core business model
involves shows. Original/exclusive offerings are seen as key to maintaining
its share of subscribers against would-be competitors. There is a direct
correlation between Netflix's content selection and Netflix's subscriber base.
Microsoft, on the other hand, is a much larger and more diversified business,
with a more complex org structure. XBox is one division of many, and XBox
Entertainment Studios was one group of many under the XBox aegis. It's hard to
argue, at the C-level view, that XBox Entertainment Studios was core to
Microsoft's business. And I can't imagine it was ever going to secure the sort
of long-term, serious commitment that it required. In some ways that's a
shame. In other ways, I totally get it.

~~~
VonGuard
The MS first-party games were supposed to be the way the company made money on
the Xbox, originally. Halo, Fable, all the tent poles of the Xbox platform
started at MS. But those studios they'd purchased to make those games are all
now off on their own, and MS is left with an internal games development group.

Traditionally, MS has just hired this group up: they had Jordan Weissman, Elan
Lee, and Rob Rinard working on games back in the day. Those folks left long
ago.

Thing is, traditionally, you make money from consoles on games, not on
consoles. In fact, you sell the consoles at a loss until late in the cycle.
That's changed now that youn can make a chunk on app-store sales. Every game
sold in MS' online Arcade is giving MS a cut of around 25%, and these games
sell much faster, more continually, and require no publisher BS or retail
deals.

The industry has changed, and MS' internal studios weren't exactly producing
gold. Best thing they'd done in a long time was 1 versus 100, which was
murdered likely because it didn't make any money.

~~~
thekaleb
Actually Halo started at Apple[1].

[1]: [http://kotaku.com/5796019/when-halo-was-on-the-mac-and-
was-a...](http://kotaku.com/5796019/when-halo-was-on-the-mac-and-was-a-
totally-different-game)

~~~
freehunter
And how much money did it make as a Mac exclusive? Oh it only ever released on
the Xbox, as a Microsoft property. So bringing up Apple isn't even relevant.
At all.

~~~
briandh
VonGuard wrote:

> Halo, Fable, all the tent poles of the Xbox platform started at MS.

So it's perfectly relevant to point out that it didn't.

~~~
VonGuard
None of Microsoft's Xbox IP that lasted originated at Microsoft. Bungie's work
was on the Mac and PC at the same time for Halo. I know that, I was there, I
saw the demos from Alex and Jason at E3 in 1999. Literally, what happened was:
Halo was THE game at E3, but no one could talk about it because it was behind
closed doors. Microsoft basically said "What's the best IP we can get, the
best game out there? The one everyone is excited about?" and so, they went to
Bungie with a semi-truck full of cash.

~~~
DevKoala
Wait, where are you getting this from? Bungie sold to Microsoft because they
had financial issues, and Microsoft was looking for "anything" to increase
their portfolio. It was almost accidental.

In fact, Bungie contacted Microsoft, not the other way around, because MS was
going around looking for games for the Xbox.

~~~
VonGuard
It was a perfect timing. MS was bringing in developers, and Bungie was the
perfect target because it needed help, and because it was the coolest IP in
development at the time. The trailer they showed at E3 2000 was the bee's
knees, and ended up having little to do with the end game's actual plot, but
it sure sold MS on the idea that this was killer IP. It was actually a
compromise to bring Halo to the console because it was an FPS, which was not
really a console thing, outside Goldeneye. But then, MS had signed Rare, too.

Isn't it obvious MS was buying up things it specifically thought were cool?
The original Xbox lineup was a who's who of bad ass computer game devs like
Molyneux and the Rare folks. And, clearly, all of the studios were able to
negotiate decent contracts because they all were free of MS in the end, unlike
other studios that have had their publishers run them out of business rather
than see them keep their IP. In the end, bungie was glad to be rid of Halo,
actually.

------
frik
Also:

Microsoft already closed MSN TV and various Microsoft Game Studios (Aces
Studio, Carbonated Games, Digital Anvil, Ensemble Studios, FASA Studio, Hired
Gun).
([https://en.wikipedia.org/wiki/MSN_TV](https://en.wikipedia.org/wiki/MSN_TV)
,
[https://en.wikipedia.org/wiki/Template:Microsoft_Studios](https://en.wikipedia.org/wiki/Template:Microsoft_Studios)
)

At this year's E3 game industry trade show, the Kinect2 sensor was not even
mentioned. So some newspapers speculated that the Kinect2 is dead. (e.g.
[http://www.heise.de/newsticker/meldung/E3-Microsoft-
begraebt...](http://www.heise.de/newsticker/meldung/E3-Microsoft-begraebt-
Kinect-und-legt-Halo-neu-auf-2218054.html) (German))

~~~
roc
Waggle for gaming certainly seems "done" as a trend.

But Kinect, as technology, has huge potential in the robotics and connected
home spaces.

Also, if they can cram it into Windows Phone, they could easily out-pace
Google's Tango to consumer-facing apps and products that really differentiate
their mobile devices.

If they're serious about 3d printing support, it would be incredibly powerful
to have a device that can create a source model just from waving your phone
around a thing to be replicated.

~~~
coldpie
> Waggle for gaming certainly seems "done" as a trend.

Waggle is a really bad way to input button presses, which is all it was ever
used for. It won't be missed.

------
smoyer
"Microsoft is the productivity and platform company for a mobile-first and
cloud-first world"

Does anyone within Microsoft actually believe this? Do they recognize it as
wishful thinking? Or perhaps they use it for motivation?

Disclaimer: I have a block of MSFT stock, but while I think the company stands
a chance of turning around and that it could even grow, it has a lot of work
to get to the point where I could say that with a straight face.

~~~
darkerside
Each half of the statement makes sense on its own.

Translation: We invented Office and windows. Since then, the world has become
focused on mobile and cloud computing.

~~~
smoyer
Then I would say "Microsoft is the productivity and platform company in a
mobile-first and cloud-first world" or even better "Microsoft is the
productivity and platform company but now it's a mobile-first and cloud-first
world". I think they're going to lead the desktop for a while longer. I like
the second statement because it recognizes their strengths and weaknesses in
one sentence and gives direction.

Here's where I stand:

\- Windows: Bullish [1]

\- Office: Neutral [2]

\- XBox (gaming): Bullish

\- Azure: Bullish (surprisingly [3])

\- Phones: Bearish

\- Tablets: Bearish

\- Everything else: Meh

[1] With the recognition that while Windows dominates desktop operating
systems, the number of desktops sold is being eroded by tablets and phones.
Enterprises will continue to use and upgrade Windows.

[2] Still the de facto standard in the enterprise.

[3] I initially predicted that Azure would fail, but I've been impressed that
they're willing to embrace _ALL_ users (for some value of all) with platforms,
frameworks and languages that aren't proprietary Microsoft.

------
higherpurpose
Prediction: this major layoff won't be the only one Microsoft has to do in the
next 2-3 years. So far I'm not convinced Nadella has what it takes to turn
Microsoft around and turn it into a "growth" company. Maybe he does, maybe he
doesn't. But the trend isn't favorable to Microsoft now, and if nothing much
changes (other than some employee/cost cutting), then this trend will
continue, and we'll see even more layoffs - at the top, too.

So far the media has mostly received Nadella in a positive light, but mainly
because he's "new" and "different" than Ballmer. But that won't be enough to
succeed. He also needs to be _better_ than Ballmer as a CEO and product
visionary. Much better.

~~~
gretful
Shouldn't be hard - I couldn't tell you a single product that Ballmer had a
vision for.

I heard a quote a couple of decades ago: "more companies die of digestion than
starvation". I'd sure hate to see it happen here with Nokia and Microsoft.

~~~
Scuds
the CEO isn't _supposed_ to come up with the vision. Jobs's hands on work on
products is an outlier for a company with a very small suite of products. MS
is a place with a very large portfolio of products, many of which are
invisible to the consumer.

~~~
seunosewa
Who IS supposed to do that if not the CEO?

------
NickWarner775
The downfall may have been that MSFT tried to do too much and enter to many
little niche markets. Glad to hear that Halo will continue. I have been
following that game series for a decade now.

------
eps
"The Santa Monica studio" is a Microsoft studio in Santa Monica, not _the_
Santa Monica Studio, the developer of Journey and other very fine titles.

~~~
jonny_eh
Journey and Flower were made by ThatGameCompany.

[http://thatgamecompany.com/games/](http://thatgamecompany.com/games/)

~~~
chc
Sony Santa Monica does a lot of support and collaboration with other studios.
AFAIK Journey was developed by thatgamecompany, but with funding and other
support from Sony Santa Monica.

