Xbox Is Closing the Studio Behind Its Most Exciting Exclusive In Years

A seismic loss.

Hi-Fi Rush
Tango Gameworks

Microsoft has announced another round of layoffs, this time shutting down three studios in the process: Tango Gameworks, Arkane Austin, and Alpha Dog Studios. A fourth studio, Roundhouse Games, is being folded into Zenimax Online Studios to support development of The Elder Scrolls Online.

Last year Tango released the critically-acclaimed Hi-Fi Rush, the most vibrant and stand-out exclusive Xbox had seen in years. Take one look at the Tango Gamework’s X account, and you’ll see the last two posts are winning a BAFTA for best animation last month, followed by the announcement of the closure. It’s a grim reminder of the reality of massive multi-billion dollar acquisitions, and the state of the video game industry. If the studio that made a multi-award winning exclusive for Xbox gets shut down, what vision is the company even serving?

More than anything these studio closures feel like they fly in the face of everything Xbox has said about supporting the creative visions of its developers.

Redfall was mired in issues when it launched in May 2023, but Xbox said multiple times it was committed to improving the game and sticking with it.


After the disappointing release of Redfall last year, head of Xbox Phil Spencer told KindaFunny, “One thing I won’t do is push against the creative aspirations of our teams. I want to give our teams the creative platform to push their abilities, push their aspirations. But I also need to have a great selection of great games that continue to surprise and delight our fans.” The one sure way to make sure your teams don’t continue to create imaginative original games is to shut everything down.

For years Microsoft has built this image of being on the “player’s side,” creating value programs with Xbox Game Pass and having developer directs that talk directly to consumers. Then there’s the numerous acquisitions where we hear about how excited the company is to add a studio to the family, saying things like “Xbox will be the best place to experience new Bethesda games.”

More than anything these closures, and the layoffs earlier this year, show an Xbox that is dragged down by conflicting information, telling consumers one thing only to turn around and do the exact opposite. In an email to staff about the studio closures Xbox head of studios Matt Booty says “We are making these tough decisions to create capacity to increase investment in other parts of our portfolio and focus on our priority games."

Apparently games like Hi-Fi Rush, Redfall, and Dishonored don’t fall into those priority games, even as Xbox lauds their successes. Xbox directly claimed Hi-Fi Rush was a success last year. After a rumor swirled about the game not meeting sales expectations, Aaron Greenberg, VP of marketing at Xbox, set the record straight sayingHi-Fi Rush was a break out hit for us and our players in all key measurements and expectations. We couldn’t be happier with the team at Tango Gameworks.”

In a kind of grim irony, Hi-Fi Rush’s major narrative themes are a takedown of corporatism, and how the machine churns through workers in the pursuit of profits.

Tango Gameworks

After that Hi-Fi Rush went on to win multiple awards and released on PS5 to more rave reviews. Seeing Tango Gameworks close is especially harrowing, because of the vision the studio was founded with. Former studio head Shinji Mikami stressed that he wanted the studio to be a place about learning and growing, saying “We want to make it a place where you can grow as a creator and develop your skills and core while working from the bottom up.”

Hi-Fi Rush was where that vision was finally starting to pay off, the talent of its developers shone through in every facet of the game. It was Tango finally splintering off from horror, trying something new, and being wildly successful at it. Seeing all that brought to a sudden stop is gutting. It was also Xbox’s sole first-party studio in Japan.

The Arkane Austin situation isn’t any better. It’s another talented studio known for making incredibly unique and beloved experiences, at least until Redfall. But there’s more to that story, of course, as a Bloomberg report from last year indicated many of the studio’s developers didn’t want to make Redfall. That report states “Veteran workers who weren’t interested in developing a multiplayer game left in droves. By the end of Redfall’s development, roughly 70% of the Austin staff who had worked on Prey [Arkane’s previous game] would no longer be at the company.”

Redfall clearly spent years in an identity crisis, but even when it launched to lackluster reviews and sales Booty said, “Arkane Austin staying open is the plan right now. They are hard at work on updates and continued content for Redfall.”

All of this is a reminder that the corporate machine doesn’t care about the human heart that makes video games, but it’s especially egregious when a company like Xbox continually claims that it values developers, values the humans behind the games, and values diverse and varied experiences.

It’s clear this announcement has hit hard for so many, and it raises serious questions about the safety of other teams at Xbox. Senua’s Saga: Hellblade 2 is set to release in a matter of weeks, and if that game isn’t a smash-hit sales success (it likely won’t be), what does that mean for the future of Ninja Theory, and the projects it can take on? What about the handful of other small developers owned by Xbox and their fates?

These closures raise serious questions for what could happen if other Xbox exclusives, like Hellblade 2, aren’t sales successes.


Does the shift in strategy mean Xbox will only be focusing on big hitters like Fallout and Call of Duty, and how does that affect the whole ecosystem? These closures open up a whole can of uncomfortable questions, that only feel even worse when past statement from Xbox executives now now feel like hollow words meant to placate and convince everyone that everything is alright. Why would any of these studios take chance on bold new games, when they know the end result? What is Xbox’s strategy, what does it really want to achieve?

Xbox’s future certainly seems in questions, but more importantly, is the uncertain future of hundreds of developers that have crafted some of the most beloved video games of all time. In response to the closures, Dinga Bakaba, co-creative director on Blade at Arkane Lyon, says it best:

“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 states on X. “You say we make you proud when we make a good game. Make us proud when times are tough. We know you can, [we’ve] seen it before.”

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