Microsoft to axe Xbox studio

Microsoft is closing its Xbox Entertainment Studios after only two years in business amid widespread job cuts at the US software giant.

The news follows the announcement yesterday that Microsoft will axe up to 18,000 jobs over the next year, marking the biggest cutbacks in the firm’s 39-year history.

Most of the cuts will come at its Nokia business, which Microsoft bought for US$7.2bn in April, and are part of a restructuring plan, the company said.

Microsoft launched the Xbox Entertainment Studios interactive entertainment arm in 2012 to create original television content for its Xbox Live online service, but the firm will now refocus its attentions on gaming – the Xbox console’s original purpose.

Around 200 staff in California and British Columbia are expected to lose their jobs because of that move.

Phil Spencer, head of Microsoft’s Xbox division and Microsoft Studios, confirmed the closure will happen “in the coming months.”

“As part of the planned reduction to our overall workforce announced today and in light of our organisation’s mission, we plan to streamline a handful of portfolio and engineering development efforts across Xbox,” he said.

“One such plan is that, in the coming months, we expect to close Xbox Entertainment Studios.”

However, Spencer confirmed that the studio would still commit to making its current TV projects, which include Ridley Scott’s web series Halo: Nightfall, Steven Spielberg’s Halo TV series and documentary series Signal to Noise.

Former CBS chief Nancy Tellem, who was hired to run the studio in 2012, will remain with the company along with exec VP Jordan Levin to oversee the completion of these projects.

Microsoft’s latest console, Xbox One, continues its head-to-head battle with Sony’s PlayStation 4 in a bid to secure the top spot with game fans.