Microsoft’s Decision to Close Multiple Bethesda Studios, Leads to Devastating Cuts and Layoffs; Future of Alpha Dog Studios and Roundhouse Games Altered as well

In an email to employees delivered this morning, head of Xbox gaming Studios Matt Booty confirmed the shutdown of many gaming studios. According to the email, initially reported by IGN, Booty stated that the closures were due to a “reprioritization of titles and resources.”

Some employees at the impacted studios would be transferred, while others will be totally shut down. “These changes are not a reflection of the creativity and skill of the talented individuals at these teams or the risks they took to try new things,” said Booty in the email.

“I acknowledge that these changes are also disruptive to the various support teams across ZeniMax and Bethesda that bring our games to market. We are making these tough decisions to create capacity to increase investment in other parts of our portfolio and focus on our priority games.”

Arkane Austin will close, and Redfall’s most recent update will be the game’s final one, once development concludes. Booty stated that the servers would remain operational, and Arkane Austin confirmed that anyone who purchased premium editions of the game would be entitled to credit.

Arkane Austin has remained relatively silent since the release of Redfall. Last week marked the first anniversary of Redfall’s launch, and fans observed that the promised DLC characters had yet to be delivered.

Redfall, the catastrophic vampire co-op game, will no longer receive promised updates because Microsoft has discontinued all development on the game. Microsoft stated that Redfall will remain available for play, and it will present a “make-good” offer to anyone who purchased the Hero DLC.

Tango Gameworks is closing as well, and it does not appear that any of its employees will join other Bethesda businesses. “Hi-Fi Rush will continue to be available to players on the platforms it is today,” claims Booty. Hi-Fi Rush only recently arrived on PS5 after getting numerous honors, award nominations, and critical acclaim. Aaron Greenberg, vice president of Xbox games marketing, stated on X that Hi Fi Rush was “a break out hit for us in all key measurements and expectations.”

Alpha Dog Studios, the creator of the mobile game Mighty Doom, will be closed too and ZeniMax Online Studios, the developer of The Elder Scrolls Online, will take over Roundhouse Games.

Finally, Roundhouse Games, which was founded following the demise of Human Head Studios, will be shut down as well, and the crew will join ZeniMax Online Studios.

Booty acknowledges that these changes will be “disruptive” for Bethesda as a whole.

“These changes are not a reflection of the creativity and skill of the talented individuals at these teams or the risks they took to try new things. I acknowledge that these changes are also disruptive to the various support teams across ZeniMax and Bethesda that bring our games to market. We are making these tough decisions to create capacity to increase investment in other parts of our portfolio and focus on our priority games.”

In addition to the expected layoffs at Arkane Austin, Tango Gameworks, and Alpha Dog, Booty informed employees that “a small number of roles across select Bethesda publishing and corporate teams will also be eliminated”.

Earlier this year, Microsoft laid off 1,900 employees from Xbox Game Studios and the freshly acquired Activision Blizzard. It is unclear how many employees will be affected by today’s closures, which follow an almost continual cycle of layoffs and closures in the video game business over the last 18 months.