What Does The Future Of Xbox Look Like After The “Reset”?

Just one week ago, Xbox CCO Matt Booty went on Xbox Wire in a post entitled “Continuing Our Reset”, which gave new information on Xbox’s plans going forward as a company. It was a surprisingly short blog post for a massive list of new changes.

For starters, Xbox announced they were laying off approximately 268 people at Halo Studios and Xbox Game Studios. As ever, the industry continues to offer the least amount of care to the people who are working the hardest. But that was just the beginning of what Xbox seems to have planned. Direct from Xbox Wire:

• Activision will expand its remit to World’s Edge, as well as Rare. Activision will also be developing the next Halo title, led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty. A small team at Halo Studios will continue supporting the Halo community and games in-market.
• Bethesda will expand its remit to include Obsidian, which will continue its current projects, including Grounded, as well as the new Fallout project made in collaboration with Bethesda Game Studios.
• King will expand its remit to include Microsoft Casual Games, uniting our two global leaders in casual game design and live operations.
• Playground and Turn 10 will come together as one studio focused on the Forza and Fable franchises. These two studios have been creative and franchise partners for over a decade, and today’s changes will formally move their work into one team.

Now, what does all this mean? Fans and some news outlets alike have been suggesting this is Microsoft preparing to sell Xbox, but I have my doubts about that. It’s certainly possible Xbox could be up for a sale, but the changes being made here make me think they know exactly what they want their next direction to be. One that, regrettably, might actually work. But let’s go back a bit first.

During the latter part of the Xbox One era, former Xbox CEO Phil Spencer announced Xbox Game Pass. It was a service that certainly seemed too good to be true, one that provided fans with a massive library of games to play at a low monthly price. At first, the library was largely third-party games, but they also agreed to put every first-party game on to Game Pass day one (interestingly, there’s a rumor going around that they’re about to stop doing that).  For that to be a selling point, Xbox had to start producing a ton of games quickly. Fortunately, they had over 20 different studios to help them do just that. And with games like Hi-Fi Rush, Psychonauts 2, and more releasing for the console, it seemed like their direction was to release something for everyone. Combined with the big tentpoles, the audience would have a reason to subscribe.

Flash forward to now, and it’s clear Spencer’s plan hasn’t worked — the most Game Pass managed to get was 30 million subscribers, falling far short of their target numbers. Largely, this happened because their “smaller” games were too small, and their AA games like Avowed and The Outer Worlds 2 weren’t reaching nearly enough people. With that in mind, their next steps seem obvious: they’re about to start directly relying on their biggest possible guns.

Suddenly, they’ve taken Halo away from Halo Studios, and given it to Activision. If that sounds weird, remember that Infinity Ward already worked on a sci-fi FPS when they did Call of Duty: Infinite Warfare back in 2016. Likely, they believe they can get Halo back to a regular cadence again instead of it being a once-every-generation title.

Meanwhile, Blizzard recently announced at BlizzCon they’re releasing both Diablo V and a new Starcraft open-world shooter game. These are two of the biggest PC franchises of all time, with near global level interest. Even Bethesda is finally working on The Elder Scrolls VI as a mainline game again, while Obsidian Entertainment has been asked to put Avowed 2 on hold so they can release a new Fallout game. Once again, two of the biggest franchises in the world, with games that are likely 3-5 years out at most.

If all that doesn’t make it clear enough, Xbox also announced that they were laying off half of World’s Edge, best known for their work on the Age of Empires and Age of Mythology games, and cancelling their next project. All their decisions point towards a leaner Xbox focused only on their biggest IPs for the near-future; games that are all almost guaranteed to be major successes commercially. In their defense, it’s hard to blame them for walking that path, except…

It’s rather sad, isn’t it?  A company that once seemed like it was willing to try a mix of new IPs like Avowed and South of Midnight along with give smaller franchises like Hellblade 2: Senua’s Saga a chance is suddenly jettisoning anything that doesn’t already stand on its own. Sure, it’s possible they might go back to smaller IP at some point, the same way Capcom did after settling itself through years of focusing on Resident Evil and Monster Hunter. But that will only happened after laying off thousands of people and affecting the lives of thousands more, all in the name of trying to make themselves more generic to pick up the widest possible audience — and keep current Xbox CEO Satya Nadella from shutting down one of the only console publishers remaining.

Just another day in the world of modern gaming, I suppose.