Microsoft delivered a fatal blow Thursday to the planned original programming for the Xbox One and Xbox 360 consoles. The company announced that Xbox Entertainment Studios will be closed, and much of the original programming that was promised will go along with it as part of restructuring efforts that will see 18,000 employees laid off over the next year.
The move comes as part of the Xbox business shift to focus on games following a leadership change with new Microsoft CEO Satya Nadella and Xbox head Phil Spencer. The Xbox E3 presentation was the first red flag with the only a mention of the Halo: Nightfall series and little else from the promised original programming line-up. Nadella’s memo to Microsoft staff released last week also focused on games for Xbox and no mention of entertainment options.
“The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming,” Nadella wrote. “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.”
Every Street United, the street soccer reality show, was the first major piece of original programming to be released by Xbox Entertainment Studios, but it was largely met with disinterest. Eight other projects were in development, but a memo from Spencer indicates that only Halo: Nightfall, the Steven Spielberg produced Halo television series, and the video game documentary Signal to Noise will continue.
Approximately 200 employees work for the Xbox Entertainment division in California and Vancouver. Microsoft has not announced how many of these are part of the 18,000 jobs that will be eliminated. Executives such as Nancy Tellem and Jodan Levin have been confirmed to stay on to work on the remaining original programs that are in production.
The recently acquired Nokia division was the hardest hit with 12,500 of the planned job cuts coming there. Details on the remaining 5,500 cuts have not been announced but it is expected that some of the Xbox marketing division for Europe will be impacted.
Here is the memo from Xbox head Phil Spencer.
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.
The reaction to Microsoft’s original programming for the Xbox last year was not positive. What do you think of the decision to eliminate it almost entirely? Sound off in the comments below.
[Via: Memo via Recode]
[Original image via Microsoft]