Microsoft to close Xbox studio as part of staff reduction
Microsoft plans to shut down its Xbox Entertainment Studio as part of its layoff and restructuring plans.
The software giant announced earlier today that it plans to eliminate up to 18,000 jobs over the next year and the Xbox division's studio, formed last May, will be among units hit.
Xbox Entertainment Studios president Nancy Tellem, the ex-CBS TV Studio head, and executive vice president Jordan Levin, former WB Network CEO, will stay on board and 'remain committed to new, original programming already in production,' Xbox division head Phil Spencer wrote in an email to employees today.
The studio shuttering is part of Xbox unit's 'plan to streamline a handful of portfolio and engineering development efforts,' he wrote. Not effected are programs already in development: Signal to Noise, a documentary series that in its first installment looks at the history of Atari, a Steven Spielberg executive-produced TV series based on the Halo video games and a Halo digital series produced by Blade Runner director Ridley Scott's production team. It recently ran an eight-episode soccer-themed reality series called Every Street United, timed to the World Cup.
'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,' Spencer wrote.
And entertainment and sports apps on Xbox game systems -- from outlets such as CW, ESPN and Fox -- will not be effected, he said.
Spencer did not note how many employees might be effected. Microsoft CEO Satya Nadella said Thursday that the majority of layoffs -- about 12,500 -- would be professional and factory positions cut as part of its $7.2 billion acquisition of Nokia's handset business, which the company closed in April.
In this May 21, 2013, file photo, Nancy Tellem, right, the entertainment and digital media president of Microsoft, and Bonnie Ross, left, general manager and studio head of 343 Industries, announce a new 'Halo'live-action TV series for Xbox Live, during an event to unveil the next-generation Xbox One entertainment and gaming console system, in Redmond, Wash. The studio is working on a live-action series based on the 'Halo' sci-fi shooter with filmmaker Steven Spielberg serving as an executive producer, as well as a multi-part 'Halo' movie to be executive produced by Ridley Scott.(Photo: Ted S. Warren, AP)
Still, the studio shutdown makes sense, says Digital World Research analyst P.J. McNealy. 'it is extremely difficult, especially for a company like Microsoft that doesn't have a core competency in (TV and movie-styled production) to make it a strength,' he says. 'The Halo series is a natural fit for TV and longer-form video but the other pieces may not have been as good a fit. ... From a big picture perspective, (the moves) make sense because they are company that desperately needs to retool.'
Referring to Nadella's letter to employees last week, Spencer said that the CEO had reiterated support for Xbox as 'a strong consumer brand, a creative center for gaming and a leader in bold innovation,' Spencer wrote. '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.'
Follow Mike Snider on Twitter: @MikeSnider
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