Xbox 'Won’t Survive' Without New IP, CEO Says

Microsoft is giving some mixed signals

Xbox CEO says company 'won't survive' without new IP despite axing key studios

As Xbox continues its major “reset,” which has led to at least 1,600 job cuts and divestment from several studios, Xbox CEO Asha Sharma recently said in internal company communications that the division will “not survive” without new IP. While this statement would be affirming on its own, it rings a bit hollow given how thoroughly Xbox has gutted many of the teams behind its most interesting fresh series.

Sharma made the statement in an Xbox town hall last week, and Windows Central obtained unauthorized transcripts of the talk.

“On content, I think this is probably the thing that you are all seeing the most about as we’re making a lot of changes,” Sharma reportedly said. “We’re backing our strongest franchises. I want our great games to become great global billion-dollar franchises.” As part of Xbox’s massive changes, the division is clearly doubling down on existing big hits. The company is moving development of the Halo series to Call of Duty publisher Activision, which has a track record of consistently delivering new releases (of vastly varying quality). Additionally, Obsidian Entertainment is being moved under Bethesda as it works on a new Fallout game.

However, Sharma's next point is a bit confusing given the company’s recent actions.

“I would also like to see us continue to create enduring new IP. We will not survive if we only revive the past. We have to find new ways, and courage, to have invention on new IP, that reaches new sets of audiences.” While she is certainly correct, and no publisher can live forever on past glories, it’s ironic to say that after cutting ties with teams like Double Fine, Ninja Theory, Compulsion Games, and Undead Labs, all of which created new IP for Microsoft. Microsoft stopped funding all four studios, three of which have pulled off management buyouts to avoid shutdowns (Ninja Theory is currently the odd one out).

What new IP did Microsoft’s studios make before getting cut?

Double Fine is known for out-there concepts, having released both Kiln, a multiplayer action game centered on pottery, and Keeper, where you play as a sentient lighthouse, over the last two years. Ninja Theory created the Hellblade series, and Undead Labs worked on State of Decay. Compulsion Games put out one of Microsoft’s most interesting recent titles, South of Midnight, a fantastical action-adventure set in the American South with an aesthetic inspired by stop-motion animation. Arkane Studios, which is currently in negotiations with Microsoft over its future, gave Xbox the brain-bending Deathloop and is currently working on Marvel’s Blade.

For the studios that weren’t cut, things don’t look much better. By moving studios like Obsidian under Bethesda, the implication is that Obsidian won’t be able to make unique games like Pentiment because it will be busy working on Fallout and Elder Scrolls sequels. Microsoft reportedly slashed id Software to half of its former size, making Doom follow-ups a tall order.

Essentially, Sharma’s words do not match the company’s actions. While it’s possible that when she says “new IP,” she means a new live-service or multiplayer game that hits millions of players, her comments read as hypocritical given Microsoft’s recent actions.