Microsoft shuts down Tango Gameworks, Arkane Austin and other Bethesda studios

Microsoft has closed several Bethesda-owned game studios to focus on its “priority games”, including Hi-Fi Rush developer Tango Gameworks and Raidfall creator Arkane Austin. Xbox parent Alpha Dog Games, maker of mobile game Mighty Doom, is also being shut down, while Roundhouse Studios, which also contributed to Raidfall development, will be absorbed by ZeniMax Online Studios. The development, initially reported by IGN, was confirmed by affected studios Tango Gameworks and Arkane in separate posts on X late Tuesday. The shutdown comes just months after Microsoft announced layoffs at Xbox and Activision Blizzard earlier this year, making 1,900 roles redundant.

ign reportCiting an internal email to employees sent by Xbox Game Studios head Matt Booty, it said the closures would result in “significant layoffs,” but Microsoft has not yet confirmed the number of roles affected.

Bethesda-owned Arkane Studios, consisting of the Arkane Lyon and Arkane Austin teams, confirmed at X that the latter would cease all development on its last game, Raidfall. The studio said that the vampire shooter will not receive any further updates, but that its servers will remain online for active players.

Raidfall was released in May 2023 to largely negative reviews, leading Microsoft Gaming CEO Phil Spencer to take “full responsibility” for the game’s disastrous launch. However, Spencer defended developer Arkane Austin at the time and promised that Xbox would continue to work on improving the game.

While Redfall fell short of expectations, Hi-Fi Rush was, in Microsoft’s own words, a “breakout hit” across “all key metrics and expectations”. Aaron Greenberg, Vice President of Xbox Games Marketing, Said Microsoft “couldn’t be happier” with Gameworks’ rhythm-based action title Tango last year. Still, the studio couldn’t survive the latest round of cuts. Tango Gameworks confirmed on Tuesday that the studio would be closing, thanking players and announcing that its previous games, including The Evil Within series and Ghostwire: Tokyo, would remain available and playable on all supported platforms.

Booty’s internal emails cited in the report said the shutdown would help it prioritize “high-impact titles” and allow Bethesda to continue investing in “blockbuster games.” Without giving any numbers on the resulting layoffs, the email said, “This reprioritization of titles and resources means some teams will be realigned with others and some of our colleagues will leave us.

“We are making these difficult decisions to create the capacity to increase investment in other parts of our portfolio and focus on our priority sports,” the email said.

Microsoft hasn’t made an official announcement on the cuts yet, but the company will be holding an Xbox Games Showcase event on June 9, where it will reveal its lineup of upcoming exclusive and third-party titles.

The latest round of shutdowns follows a string of layoffs this year at Riot Games, Eidos-Montreal, Sony, Electronic Arts, Embracer Group, Take-Two Interactive and other major studios. In January, Microsoft laid off 1,900 employees at newly acquired Activision Blizzard and Xbox—an eight percent reduction in its overall gaming division.