RPG studio Obsidian Entertainment is currently negotiating with Xbox management about a potential closure after sales figures for "The Outer Worlds 2" and "Avowed" fell short of internal expectations.
According to reports from The Game Business The developer is on an internal list of companies slated for closure as part of the comprehensive Xbox overhaul next week. Alongside Obsidian, Compulsion Games, Ninja Theory, Double Fine, and Undead Labs are also fighting for their survival under the Microsoft umbrella.
Imminent clear-cutting from July 6th
The negotiations are part of a comprehensive restructuring of Xbox's business by new CEO Asha Sharma. The cost-cutting measures are expected to begin next Monday and include significant layoffs, the closure, sale, or merger of first-party studios, and the cancellation of ongoing game projects. the future of Arkane Studios It therefore hangs by a thread if no external buyer can be found.
The reason for this tough approach is a realignment of budgets. Sharma is prescribing a more agile start-up mentality for the games division and wants to shift resources away from niche projects and towards established blockbuster brands.
UpdateAccording to industry insider Jason Schreier, The Game Business's report is inaccurate:
The consequence of weak sales figures
Obsidian CEO Fergus Urquhart admitted back in February that the studio had missed its commercial targets. While the co-op title "Grounded 2" was a success, the two big RPG hopes, The Outer Worlds 2 and Avowed, didn't recoup their development costs as expected. The consequences are now becoming apparent. Studio budgets and development times are under close scrutiny at Microsoft.
Frustration is running high within the first-party teams. Internal sources report that even a massive success for Obsidian wouldn't have been able to offset the current deficit in the Xbox division. The reason lies in the failure of other heavyweight titles: the recent slumps in revenue-generating games like Call of Duty are so significant that the earnings of smaller studios barely register within the overall corporation. The smaller teams are now paying the price for the mistakes of the global brands.
When even established studios like Obsidian or Double Fine are up for sale, Microsoft is definitively abandoning its promise of creative diversity in Game Pass. Anyone hoping for exclusive content will be disappointed. Going forward, only the biggest franchises will matter to Xbox.
Obsidian too? 🤣
It's interesting that it's never mentioned here that we haven't received anything new for about 5 years, yet the studios still cost money.
That's how it is in the real world. If you don't bring anything to the table, you have to leave.
Welcome!