The details on which Microsoft employees were affected in yesterday’s 18,000 job cuts announcement are getting a bit clearer. Microsoft has decided to shut down the Xbox Entertainment Studios according to a report.

The move comes as Microsoft re-focuses the Xbox brand towards videogames.

200 people worked in the Xbox Entertainment Studios. Microsoft refused to comment on how many of them will lose their jobs.

CEO Satya Nadella hinted at these changes in a memo to Microsoft employees.

“The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming,” Nadella wrote last week. “We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation. Microsoft will continue to vigorously innovate and delight gamers with Xbox.”

Notice any mention of original content for Xbox?

Xbox Entertainment Studios main goal was to create original entertainment content found only on Xbox platforms. It was part of an overarching plan to dominate the living room space. One that hasn’t performed as well as Microsoft would have hoped. Sales continue to lag behind the PS4 worldwide and in the U.S., a once powerhouse for the Xbox brand.

Phil Spencer recently became head of Xbox and it’s clear today’s Xbox team has a vastly different philosophy compared to the one a year ago. Spencer preached games at E3. It’s clear Microsoft brass means it.

Spencer issued a statement confirming the studio closure over the next few months. Original programs already in production will continue including the Halo: Nightfall television series and a documentary series called Signal to Noise.

Bots on Bots. Skype Announces New Chatbot Features

Here’s Phil’s statement talking about the changes.

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.


Follow News Ledge

This post may contain affiliate links, which means we receive a commission if you make a purchase using one of the affiliated links.