Microsoft Shutters Several Bethesda Developers Post Acquisition, Same As It Did In Activision Acquisition
from the liar-liar dept
Here we go again. Back in February, the FTC wanted to dive back into its battle with Microsoft over its acquisition of Activision Blizzard due to Microsoft announcing thousands of jobs worth of layoffs, including many developers from Activision Blizzard. When the FTC had asked for an injunction to block the sale, Microsoft made two claims. First, it indicated that the injunction wasn’t needed as this was a horizontal acquisition, not a vertical one, meaning that it wasn’t going to reduce staff after the purchase due to redundancies in the workforce. Second, it indicated that the injunction wasn’t necessary due to the hands-off approach Microsoft would take at these studios, meaning that it could easily divest from these developers if ordered to, rather than having to shut them down entirely. Post acquisition, Microsoft went right ahead and announced plans to lay off nearly 2,000 people, rather than doing any divesting. A complete one-eighty from what it told the courts, in other words.
And one that may be part of a larger effort, considering Microsoft also just closed up several developers that came over in the Bethesda acquisition as well.
Microsoft has closed a number of Bethesda studios, including Redfall maker Arkane Austin, Hi-Fi Rush and The Evil Within developer Tango Gameworks, and more in devastating cuts at Bethesda, IGN can confirm.
Alpha Dog Games, maker of mobile game Mighty Doom, will also close. Roundhouse Studios will be absorbed by The Elder Scrolls Online developer ZeniMax Online Studios. Microsoft, currently valued at over $3 trillion, did not say how many staff will lose their jobs, but significant layoffs are inevitable. IGN has asked Bethesda for comment. Microsoft declined to expand further when contacted by IGN.
Now, layoffs across the video game industry occurred throughout 2023 and into 2024, so it’s not as if Microsoft is alone in this. On the other hand, Microsoft is also, obviously, one of the largest players in the gaming space, with the largest revenue streams coming in from multiple avenues in the industry, and it just shelled out billions and billions of dollars to acquire a massive portfolio of gaming companies and franchises. For the coda to all of that to amount to Microsoft both laying off thousands of people and to pretend it’s sticking to its claim that this isn’t somehow a consolidation of roles resulting from cuts to redundancy post-acquisition is absolutely silly.
And while Microsoft and Bethesda may not be commenting publicly about all of this, the wider gaming industry certainly is.
“This is absolutely terrible,” tweeted Bakaba, co-creative director at the remaining Arkane studio, in the wake of the news. “Permission to be human: to any executive reading this, friendly reminder that video games are an entertainment/cultural industry, and your business as a corporation is to take care of your artists/entertainers and help them create value for you.”
And, to harken back to an earlier claim Microsoft made to combat the injunction the FTC wanted, some are questioning why these studios had to be closed to begin with.
It’s a fair question, given Microsoft’s previous claims. If the company isn’t interested in the games, franchises, and other work these studios are doing, why not divest? The answer is, because in many cases, Microsoft is interested in those things and is simply going to fold them into other parts of its gaming infrastructure.
And before anyone wants to chime in that there are broader economic forces at work that are causing Microsoft to trim any supposed fat, that’s certainly not represented in Microsoft’s overall numbers.
No, it’s far more likely that this is simply the result of lies and greed at work. Lies to the courts and FTC about what its plans were all along, and greed propelling layoffs and studio closures purely to shift their previous efforts to Microsoft teams that are already in place and established.
One would hope the FTC is paying attention.
Filed Under: layoffs, synergies, video games
Companies: bethesda, microsoft
Comments on “Microsoft Shutters Several Bethesda Developers Post Acquisition, Same As It Did In Activision Acquisition”
At what point is lying to the courts an actual crime here? I feel like if I did this in personal life, I’d have already been rolled up.
Re:
First, you and I don’t have enough money to buy the law.
Second, corporations are persons except when it comes to accountability with the law.
Until the CEO and board members are personally held responsible and jailed for actions like this, they’ll continue to happen.
Re: Re:
Sounds like something designed to let them get away with things like this, if I’m being honest.
Re:
What happening it exactly what Microsoft has announced.
Well, to be more precise, it’s exactly the opposite, but since they made a long habit at Microsoft to do the exact opposite of what they always announce, they always could plead mythomania, or even madness, a lot of medical experts would testify, and be released without any charge.
This is just one more mad company in the wild.
And then two other things happened. First I believe in interviews stated that the reason they did this is because they couldn’t manage it all… which points to complete incompetence in upper management that should be getting the axe. Then the day after their announcement they held a town hall with employees where they stated they need small games that give them prestige and awards…
So yeah, fuck microsoft. Their disdain for customers and employees is on full display. Wasn’t it last year where they had layoffs and then a concert for their higher ups? Either way I moved to Linux finally earlier this year because of how shitty windows 11 is and every mention of ads, feature lock downs, and forced buggy updates makes me glad of my decision.
https://www.pcgamer.com/gaming-industry/we-need-smaller-games-says-xboxs-matt-booty-right-after-microsoft-shut-down-the-studio-that-made-hi-fi-rushand-was-reportedly-about-to-pitch-a-sequel/
Re:
This math is unable to math.
This comment has been flagged by the community. Click here to show it.
The Sky was supposed to be Rising in the world of videogames, I thought? Seems the only thing Rising in the report that was written was the profits, and that’s the only thing that apparently mattered to its authors and the losers who hyped up the report.
Re:
Tell me you don’t understand the report without telling me you don’t understand the report.
Re: Re:
The report was that people were actually making money thanks to the new opportunities provided by the Internet, no? Turns out it’s only some people making money while others get tossed away.
Re: Re: Re:
Except Microsoft shutting studios down doesn’t change the fact that game developers have never had more opportunities for distribution than they currently do, which is what the report points out.
Re: Re: Re:2
Distribution is one fragment of the equation. The other fragments are various resources necessary to put the game together. The vast waves of layoffs and indie studios shuttering as well, points to there being less money going around and willing to be invested into games. Listen to Remap Radio’s podcasts over the course of this last year. Almost every week there have been layoffs or studio closures or both.
What good are all the routes of distribution if funding and hiring are job security are so bad amd seemingly getting worse? The Sky is Not Rising.
Re: Re: Re:3
The game industry has never been more profitable, so studios shutting down is due to mismanagement or publishers needing to keep satisfying shareholders. What Microsoft just did is similar to what ActiBlizz did back in 2018.
And while job security is at an all-time low for studio game developers, there’s still a ton of games being developed by individuals or tiny independent teams. That’s who the sky is rising for.
Re: Re: Re:3
And where do you think that money is going? Because it’s not going into the pockets of the developers who bleed and sweat and give up their precious irreplacable time to make the games that make the money those devs aren’t getting.
The late Satoru Iwata, who was the president of Nintendo a decade ago, oversaw months-long pay cuts for numerous high-ranking members of the company—including his own salary, which he slashed in half—to make up for the lack of sales numbers for the Wii U and its software. Iwata’s move meant Nintendo could avoid firing lower-level employees to “cut costs”. That the C-suite executives at companies like Microsoft and Sony have never suggested slashing their multi-million-dollar salaries to avoid closing studios and firing developers who make hit games says all anyone needs to know about those bastards.
Re: Re: Re:4 'You keeping your job means I make a fraction of a fraction of a percent less so...'
As a comment in a recent YongYea video pointed out the nearly four-hundred million dollar golden parachute given to Bobby Kottic after Activision was bought out could have kept the two studios that got canned here open for something like seventeen years.
They absolutely have the money to keep studios open, they’re just not willing to spend it on anyone but themselves.
Name ONE M&A, that a year later still had not fired or closed one segment. (Does not apply to Company A, buying Company B, with 10 people that make product C that competed with company A’s product D type situation)
Re: M&A
Well, that’s the thing: Micro$oft bought all those IPs in order to destroy them – they were the competition. And competition is something Micro$oft have always abhorred even if they have occasionally been forced to sustain it (viz. Apple).
Re:
I give zero fucks what else is happening in the industry to other players. If they are so bad at forecasting the immediate few years after their purchase date and can’t meet their commitments during that time, maybe they shouldn’t making the purchase?
I know my fucking bank won’t care the slightest fucking bit if I go out and buy a car and get fired the next day, why should I give a fuck if MS does the same thing?
It’s utterly ridiculous that Microsoft threw good money after bad with Arkane Austin and didn’t immediately upon acquisition in 2021 cancel Redfall and roll the handful of devs remaining who had not already quit under Zenimax into its existing teams while it still had some of the talent behind Prey left.
It’s equally absurd that they’d go on to then shutter the one studio that was their trojan horse for the Japanese market, an opportunity they are never going to get again. and to do so just as they pivoted to multiplatform releases by their internal studios is absolute insanity, when this was an established studio on PS5 with multiple launches on Sony’s console under their belts.
A one-eighty or a five-forty? Who the hell knows with dishonest companies anymore?
The part where the very next day the head of Xbox Game Studios got up in front of everybody and said “We need smaller games that give us prestige and awards” is especially fucking choice.
Re:
Incidentally, Hi-Fi Rush is in this month’s Humble Choice bundle; you can currently snag it and 7 other games for $12.
I was already mad about the closures on principle, but now that I’ve played Hi-Fi Rush I’m also mad because the folks at Tango Gameworks made something genuinely great.
Re: Re:
It was even harder to read about a developer noting that this situation shows that even if a developer makes a critically-acclaimed, great-selling game, they might still be closed down. It’s absolute insanity.
Re: Re: Re: 'Make a terrible game? Make a great game? Doesn't matter, you're fired!'
Microsoft Execs: Nothing motivates employees like having a perpetual sword of damoclese hanging over their head with absolutely no way for them to know when it might fall…
It seems Microsoft is losing faith in Xbox it may any game to be released on any console it has been no 2 behind Sony for years
There’s a problem it now costs 100 million plus to develop a triple AAA games plus millions needed to promote it gaming is now becoming like making a Hollywood film expensive and risky
I don’t see the point in buying up studios and then closing them down after a year unless it’s to get more tax credits
Re:
I’m still using my Xbox360 from 2008 and don’t really see a problem.
Re: Eh?
Only if you do it the EA-sweatshop-big tent-way. There are successful small shop game developers that manage to produce quality titles that aren’t bug-filled crap requiring post-launch DLC to fix.
Simple Math... Yes.
The gamers out there have $X to spend on games.
Microsoft has bought or developed so many games coming out Bill Gates’ giant wazoo…
Each game costs money to maintain, fix bugs, etc.
Simple – corner the market, reduce the amount of option and hence lower maintenance costs, keep collecting $X per user.
If some other company starts to eat that $X – rinse and repeat: acquire them, then cull the least productive most expensive to maintain games. I’m going to guess MS has its own methodology and development processes, so outside games are at a disavantage by comparison when it comes to deciding what to cut. Then there’s office politics – the guys making the decisions at MS are going to favor their fellows over outsiders.
Re:
The idea of “cornering the market” in video games is completely ridiculous. This is one of many reasons why the FTC’s attempt to block the merger was unethical and illegal. Microsoft has absolutely nothing close to a monopoly on video games. In fact Sony, Microsoft and Nintendo, added together, account for less than a third of games sold.
Re: Re:
No attempt to block a merger is EVER unethical.
Re: Re: Re:
I would say more ‘rarely’ than ‘never’. What if smaller Companies C and D needed to merge to remain remotely competitive with much larger Companies A and B?
The purpose of blocking mergers is to protect market competitiveness. If it does the opposite then it may become counterintuitively anticompetitive. If the market would be shifting from 4 to 3 entities without intervention but said intervention would lead to the market going from 4 entities to 2 entities.
I’m not sure why anyone is surprised here. Every merger requires layoffs, and a large number of acquisitions will mean some won’t last. You can argue the reasons why Redfall failed and whether Hifi Rush would have done better if it weren’t a last minute shadow drop, but it’s clear why they were on the chopping block.
MS are doing a horrible job of attracting and keeping trust, but I don’t think this is a shock.
The FTC had no legal basis for blocking the merger in the first place, so I don’t much care if Microsoft used bullshit arguments to get them to eff off.
It's not like this is a company making billions a year or anything...
I mean I can see where Microsoft is coming from here, a company that’s bleeding money and hasn’t made a profit in years will clearly have to cut costs where they can, and if that involves shutting down a studio or two that’s just the sort of tough choices that execs(even ones that are let go post-aquisition) are paid positively paltry amounts of money to make…
Re: ???
That statement doesn’t describe Microsoft, post-acquisition. They had enough $$$ to buy those studios AND buyback stock (which, honestly, should be prohibited for any company accepting federal fund/bailouts/covid relief), and still report healthy profit on their 10-Q.
Re: Re:
He was being sarcastic.
Re: Re:
Hint: “It’s not like […] or anything” indicates sarcasm.
Microsoft
This is happening in every industry, buy up competitors and own the market.
You will own nothing and be happy (a slave).
Re:
And Marxism will return, more violent than ever.
It is not going to be a civil thing.
Booty Buster
Booty is a classic example of an Exec failing his way to the top. He was a huge part of the failure at Midway games in the 90’s. In fact he was the final CEO there when they completely imploded. He continues his rise to the top of Executive self-success while leaving a trail of layoffs and destruction in his wake. All while making millions for himself.