Xbox founders reportedly mourn the loss of its identity: "It's not Xbox anymore, it's Microsoft gaming" (2024)

Xbox founders are reportedly mourning the loss of the company's identity within Microsoft and refer to it as "Microsoft Gaming."

Earlier this week, Microsoft shuttered acclaimed studios Arkane Austin and Tango Gameworks after just purchasing them a handful of years ago. Hi-Fi Rush fans mourned the critically acclaimed game in particular, despairing at the thought that even launching a beloved game might not be enough to save a developer from closure at the hands of a mega-corporation.

Now, IGN has spoken with two Xbox co-founders about matters internally at the company, and within the context of Microsoft as an overseer. "I had lengthy conversations with a bunch of Xbox founders, and we all came to the same conclusion: it's no longer Xbox, but Microsoft Gaming," one founder reportedly told the outlet.

Another founder said there's "just too much surface area," adding that there are effectively three huge companies at play and that "Microsoft never really finished [the] integration with Bethesda." The founder also points out that Activision was three times the size Xbox was when purchased, and Xbox reportedly having "almost 30,000 people" is proof of how vast the company has become.

"The reason this seems so inconsistent with previous Xbox leadership team statements is that these decisions probably aren't being made by Phil [Spencer]," a founder told the outlet, speaking of Xbox head of gaming Phil Spencer. "This is all getting dictated by Satya [Nadella, Microsoft CEO] and Amy Hood [Microsoft CFO], and it all stems from the Activision acquisition."

The founders also contrasted Xbox's situation now with that of when they first made the move to purchase Activision in 2020. One founder says Xbox was selling consoles so fast they couldn't keep them in stock and was "making money hand-over-fist with Game Pass growth," so the Activision acquisition at the time seemed like a "no-brainer."

What's happened since then, the founder believes, is console sales are down, there's been a post-COVID-19 pandemic recession, and Xbox Game Pass growth has slowed. Earlier this week, one veteran analyst stated revenue from subscriptions like Xbox Game Pass has barely grown over the past two years, which could very well explain Xbox's decision to shutter the four Bethesda-owned studios this week.

Elsewhere, Seamus Blackley, who helped design the original Xbox, reacted with the dejected emoji to a tweet highlighting the "Microsoft Gaming" portion of IGN's report. There's nothing to say that Blackley is kept apprised of goings-on within Microsoft and Xbox, but the veteran designer clearly doesn't like Xbox being taken over by Microsoft.

Additionally, Blackley tweeted that "The game industry keeps forgetting, and then re-learning *the hard way* that it’s the DEVELOPERS who matter," adding that it's the people at the top who should "Treat them better."

Marvel's Blade and Deathloop director says Microsoft's closure of sister studio Arkane Austin is a "f***ing gut stab."

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