Microsoft is closing multiple studios including Hi-Fi Rush developer Tango Gameworks and Redfall creator Arkane Austin

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Microsoft is shuttering four Bethesda Softworks studios including Hi-Fi Rush developer Tango Gameworks and Redfall team Arkane Austin.

In an email to staff obtained by IGN, Xbox Game Studios head Matt Booty explained that this decision was “grounded in prioritizing high-impact titles and further investing in Bethesda’s portfolio of blockbuster games and beloved worlds.” He described the move as part of a “reprioritization of titles and resources” that will see “a few teams will be realigned to others” and an unspecified number of staff losing their jobs.

The email also outlines the full scope of the changes. In addition to the closure of Tango Gameworks and Arkane Austin, the support studio Roundhouse Games will be folded into The Elder Scrolls Online developer ZeniMax Online Studios. Alpha Dog Games (which Booty appears to erroneously refer to as “Alpha Dog Studios”), the developer of the mobile title Mighty Doom, will also be closed. This is on top of the elimination of “a small number of roles” in the company’s publishing arm.

The news comes alongside the announcement that development on Redfall has ceased and that players who purchased the premium ‘Bite Back Edition’ of the game will be eligible to “receive the value of the upgrade” in compensation. This was detailed in a recent post to the official Redfall X / Twitter account that goes on to clarify that the game’s “servers will remain online for players to enjoy.”

Although the number of staff impacted has yet to become fully apparent, we hope that all of those affected by these studio closures are able to land on their feet. Neither Microsoft nor Bethesda has responded to a request for comment from TechRadar at this time.

Analysis: What’s going on?

I’m really struggling to understand the rationale behind this move, especially with regard to the closure of Tango Gameworks. The studio’s most recent title, Hi-Fi Rush, was a critical success that seemed to resonate well with players. I awarded the PlayStation 5 version of the game four out of five stars in our Hi-Fi Rush review, drawing particular attention to its incredibly unique rhythm-based combat system and stunning art direction.

Initially a console exclusive, the game is now available on multiple platforms but remains a real highlight of the Xbox catalog and definitely increases the appeal of a game subscription service like Xbox Game Pass Ultimate. The studio’s older titles, like Ghostwire: Tokyo and The Evil Within 2 may not have made quite as much of a splash when they launched but nevertheless stand out as high-quality experiences that paint a picture of a studio brimming with potential.

The closure of Arkane Austin could be seen to make a little more sense given the overwhelmingly negative critical reception of its recent multiplayer vampire first-person shooter (FPS) Redfall, though it still seems like an incredibly short-sighted decision. The studio’s previous project, the sci-fi horror game Prey, is something of a hidden gem and shows the team’s capacity for serious innovation.

I’m left concerned about the overall trajectory of the Xbox brand and the leadership culture at Microsoft. It seems as though the people in charge really don’t understand the value of more niche titles like these.