The Santa Monica studio, with its estimated 200 employees, will be shuttered as Microsoft focuses on strengthening its core videogame business. The move is part of Microsoft’s company-wide restructuring announced on Thursday morning, which will see the elimination of up to 18,000 jobs in the next 12 months.
Chief Executive Satya Nadella signaled the change in a lengthy memo to Microsoft staff that expressed support for the Xbox and its importance to the company — but omitted any reference to original television programming.
“The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming,” Nadella wrote a week ago. “We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation. Microsoft will continue to vigorously innovate and delight gamers with Xbox.”
Absent was any mention of Xbox Entertainment Studios, a division it created when it hired longtime CBS entertainment president Nancy Tellem in September 2012. Her mandate at the time was to make entertainment content that could only be found on the Xbox Live online platform.
Xbox Entertainment Studios fit with Microsoft’s plan to dominate the living room through its game console. But the unit has struggled to deliver on its promise.
Sources paint a picture of a disorganized studio that struggled to close deals and lacked a fully fleshed-out business model
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