Microsoft has reportedly begun offering voluntary severance agreements to employees within its ZeniMax division following the closure of three Bethesda-ZeniMax game development studios and the integration of another team into ZeniMax Online Studios. The number of ZeniMax team members accepting these offers has not been disclosed, and Microsoft has not provided comments on the situation.
Studio Closures and Future Projects
Before their closure, two of the studios, Tango Gameworks and Arkane Austin, were developing new project proposals for Microsoft. Tango Gameworks was working on a sequel to the well-received action game Hi-Fi Rush, while Arkane Austin was crafting a proposal for a new single-player immersive sim game, following the launch of Redfall in 2023. These closures and consolidations are part of Microsoft's strategy to streamline operations and improve resource allocation within its gaming division.
Strategic Reassessments and Revenue Enhancement Measures
During a town hall meeting with ZeniMax employees, Microsoft gaming executives, including Xbox Game Studios head Matt Booty, discussed the reasons behind the recent layoffs and studio closures. Booty described the previous structure of the ZeniMax division, which comprised nine studios, as overstretched. Jill Braff, head of Microsoft's ZeniMax division, also addressed the challenges of managing a global network of studios with a streamlined central team.
Additionally, Microsoft is considering various strategies to boost its gaming revenues, such as adjusting prices for the Xbox Game Pass Ultimate service and making upcoming games like Senua's Saga: Hellblade II available on competing platforms, including Sony's PlayStation 5. This strategy aims to expand Microsoft's gaming audience and increase revenue streams during the ongoing reorganization of its gaming division.
Microsoft acquired ZeniMax for $7.5 billion in 2020 and taking control of Bethesda in the process. In January 2023, Microsoft recognized a union of 300 QA workers at ZeniMax Online, joining other unionized groups at Blizzard Albany and Raven Software.
