Microsoft recently announced the shutdown of four of its game studios, leading to a town hall with Matt Booty, head of Xbox Game Studios. During the meeting, Booty emphasized the importance of smaller games that could bring prestige and awards to the company. This goal comes shortly after Microsoft closed down Tango Gameworks, the Japanese developer behind the innovative and successful title Hi-Fi Rush. Despite the game receiving critical acclaim and winning several awards, Microsoft’s decision to shut down the studio raised questions about the company’s future strategy.
Hi-Fi Rush, a rhythm action game featuring music by popular bands and an art style reminiscent of classic PS2 games, was a surprise hit with 3 million players within four months of release. The game went on to win various prestigious awards during the 2023–2024 awards season. Despite the lack of public sales data, Microsoft expressed satisfaction with Hi-Fi Rush’s performance, with Vice President Aaron Greenberg calling it a “breakout hit.” The success of Hi-Fi Rush marked a departure from Tango Gameworks’ previous survival horror portfolio, demonstrating the studio’s versatility and creativity.
The success of Hi-Fi Rush also underscored Microsoft’s commitment to diversifying its game lineup and attracting Japanese exclusives to its platform. Phil Spencer, Xbox head, expressed the importance of allowing studios like Tango Gameworks to explore new genres and push creative boundaries. Spencer also hinted at upcoming collaborations with Japanese companies to bring more AAA titles to Xbox consoles. However, the closure of Tango Gameworks raised doubts about Microsoft’s plans to continue pursuing Japanese partnerships and developing unique games for its audience.
The current gaming landscape favors small single-player games like Hi-Fi Rush, as evidenced by the success of titles like Balatro and Manor Lords. These indie games, created by solo developers, have attracted large player bases and strong sales figures, highlighting a growing demand for creatively unique gaming experiences. Despite the potential demonstrated by such games, Microsoft’s decision to shut down Tango Gameworks raises questions about the company’s ability to capitalize on emerging trends and successful partnerships. Reports suggest that Tango Gameworks was in the process of pitching a sequel to Hi-Fi Rush before its closure, underscoring the missed opportunity for Microsoft.
Booty’s comments during the town hall suggest that Xbox’s leadership may have overlooked the potential of studios like Tango Gameworks and failed to leverage their creative successes effectively. Microsoft’s focus on smaller, prestige-driven games aligns with industry trends but highlights the need for a cohesive strategy to support and nurture innovative developers. As the gaming market continues to evolve, Microsoft may need to reevaluate its approach to studio management and partnerships to ensure the continued success of its gaming division. Microsoft’s ability to adapt to changing consumer preferences and emerging opportunities will be critical in shaping the future of Xbox Game Studios.