Microsoft closes Arkane Austin, Tango Gameworks, and two other studios, calling it "reprioritization of titles and resources"

Microsoft has decided to close four internal studios that are part of Bethesda/ZeniMax. This comes just a few months after mass layoffs across the company’s gaming division.

Hi-Fi Rush

Bloomberg’s Jason Schreier broke the news on social media, saying that Xbox has decided to shut down the following game development studios:

• Arkane Austin (known for Redfall, Prey, and co-development of the first Dishonored game) — some employees will move to other studios at Bethesda, and it appears that Arkane Lyon, which is now working on Marvel’s Blade, will continue to operate;
• Alpha Dog Games (Mighty Doom);
• Tango Gameworks (Evil Within, Ghostwire: Tokyo, Hi-Fi Rush);
• Roundhouse Games — the team will join ZeniMax Online Studios to work on The Elder Scrolls Online.

Alpha Dog, Tango Gameworks, and Arkane Austin confirmed the news on social media.

IGN also reported the closures, obtaining a copy of an email sent to staff by Xbox Game Studios head Matt Booty. “These changes are grounded in prioritizing high-impact titles and further investing in Bethesda’s portfolio of blockbuster games and beloved worlds which you have nurtured over many decades,” he said.

Here’s how this move will affect games developed by the above teams:

• Redfall — servers will remain online, but further development will be ceased, including the upcoming Hero DLC;
• Mighty Doom — in-app purchases will soon be turned off, and the game will go offline on August 7;
• Hi-Fi Rush — the game will continue to be available for purchase, as well as other Tango Gameworks titles.

“To double down on these franchises and invest to build new ones requires us to look across the business to identify the opportunities that are best positioned for success,” Booty told staff. “This reprioritization of titles and resources means a few teams will be realigned to others and that some of our colleagues will be leaving us.”

Microsoft will also cut a “small number of roles across select Bethesda publishing and corporate teams.” However, it is unclear how many employees, including those who worked at the closed studios, will lose their jobs.

Arkane Lyon studio director Dinga Bakaba has already commented on the closure of the company’s US division, calling it “absolutely terrible.” He also called on executives at Microsoft and other companies to take care of their developers and help them create value for them.

“Don’t throw us into gold fever gambits, don’t use us as strawmen for miscalculations/blind spots, don’t make our work environments darwinist jungles,” Bakaba wrote. “You say we make you proud when we make a good game. Make us proud when times are tough. We know you can, we [have] seen it before.”

In January, Microsoft laid off 1,900 employees across its gaming division, affecting people who worked at Blizzard Entertainment, Activision, Infinity Ward, Sledgehammer Games, and other studios.

Overall, layoffs continue to purge the games industry globally. According to the Game Industry Layoffs project, at least 9,400 professionals have already lost their jobs since the beginning of 2024. This almost the same as for the whole of last year.