There's no one size fits all to it for us." Xbox President Sarah Bond quizzed on why Hi-Fi Rush developer was closed

GraniteStateColin

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Pure speculation on my part (zero inside knowledge, and welcome corrections if anyone knows anything), but perhaps there were some personnel dynamics with the team after completing Hi-Fi Rush. Obviously, MS only made cuts that it thought were financially wise (whether we agree with their conclusions or not, that was their internal logic). If it believed Tango would put out a strong-selling sequel, in a reasonable timeframe and at a reasonable cost, they wouldn't shudder that studio. Had anyone recently quit that team or moved to another team that MS might have thought would cripple them going forward, or did anyone there make some demands that MS might have thought were bad for the long-term?

Or, maybe between Redfall and the limited success for Starfield (compared with expectations), MS told Bethesda it had to make cuts of a certain amount. For its own internal reasons that we may never know, Bethesda kept who it wanted most and cut the rest.

My take is that MS has a mindset that is not capable of giving proper weight to market perception and loyalty, that they don't properly factor the relatively low cost of keeping a customer for repeat business vs. the much higher cost of gaining a new customer. That does not necessarily mean that MS is wrong overall, just they have a very specific way of looking at problems in terms of productivity and growth. Anything that doesn't fit with their growth model, they tend to cut. I think this hurts them in the long-run as they alienate groups of customers who would otherwise throw money at them and spread positive word of mouth to evangelize the brand. But I could be miscalculating. Maybe MS is right that if a team or product can't deliver an X% internal rate of return over the next 5 years, it should be cut.

While I think they're wrong, business history is full of companies who had a very simple strategy, often criticized at the time for their lack of nuance, who nevertheless did very, very well over the long-term. Those companies frequently credit their success to the simplicity of their decision-making logic -- that simplicity kept them fast and decisive, meaning that even if some individual decisions were bad, the aggregate effect was still a big net win. Maybe that's the case here. Certainly, MS overall success is indisputable. Maybe we're right that they should have stuck it out with Windows Phone or kept the Hi-Fi Rush team as individual decisions (those seem obviously bad to most of us strategists as outsiders), but if they second-guessed their over-arching decision drivers, and allowed themselves to make those exceptions, they would be worse off overall because that means they would have also probably kept a bunch of other stinkers and really hurt their growth.

It's possible. I still think they have a strategy problem, but it's possible that they know their own business better than I do.
 
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fjtorres5591

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May 16, 2023
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Pure speculation on my part (zero inside knowledge, and welcome corrections if anyone knows anything), but perhaps there were some personnel dynamics with the team after completing Hi-Fi Rush. Obviously, MS only made cuts that it thought were financially wise (whether we agree with their conclusions or not, that was their internal logic). If it believed Tango would put out a strong-selling sequel, in a reasonable timeframe and at a reasonable cost, they wouldn't shudder that studio. Had anyone recently quit that team or moved to another team that MS might have thought would cripple them going forward, or did anyone there make some demands that MS might have thought were bad for the long-term?

Or, maybe between Redfall and the limited success for Starfield (compared with expectations), MS told Bethesda it had to make cuts of a certain amount. For its own internal reasons that we may never know, Bethesda kept who it wanted most and cut the rest.

My take is that MS has a mindset that is not capable of giving proper weight to market perception and loyalty, that they don't properly factor the relatively low cost of keeping a customer for repeat business vs. the much higher cost of gaining a new customer. That does not necessarily mean that MS is wrong overall, just they have a very specific way of looking at problems in terms of productivity and growth. Anything that doesn't fit with their growth model, they tend to cut. I think this hurts them in the long-run as they alienate groups of customers who would otherwise throw money at them and spread positive word of mouth to evangelize the brand. But I could be miscalculating. Maybe MS is right that if a team or product can't deliver an X% internal rate of return over the next 5 years, it should be cut.

While I think they're wrong, business history is full of companies who had a very simple strategy, often criticized at the time for their lack of nuance, who nevertheless did very, very well over the long-term. Those companies frequently credit their success to the simplicity of their decision-making logic -- that simplicity kept them fast and decisive, meaning that even if some individual decisions were bad, the aggregate effect was still a big net win. Maybe that's the case here. Certainly, MS overall success is indisputable. Maybe we're right that they should have stuck it out with Windows Phone or kept the Hi-Fi Rush team as individual decisions (those seem obviously bad to most of us strategists as outsiders), but if they second-guessed their over-arching decision drivers, and allowed themselves to make those exceptions, they would be worse off overall because that means they would have also probably kept a bunch of other stinkers and really hurt their growth.

It's possible. I still think they have a strategy problem, but it's possible that they know their own business better than I do.
Interesting look.
Not much to disagree with.

FWIW, I saw the Bond interview video.
And it was clear she was uncomfortable, sticking to canned answers, and holding something back. MS is taking a lot of flack rather than offer up an excuse so all we can do is speculate.

Your final point is key.
They know their business, from the inside, better than anybody outside it.
They know things like burn rates for all their studios, staffing levels, organizational structure, overhead costs, and *how they compare*.

Microsoft, like most well run tech companies, routinely ranks employee performance annually and the bottom ranked are the first to go come times of change. Under Ballmer it was annually. Under Nadella, less often but not zero.

XBOX until recently wasn't big enough to do without a full studio,no matter its "issues". Lionhead being the most notable exception. That is no longer true.

Of note, none of the closed studios are known to have a new, high visibiity/near completion ongoing project. In other words, whatever might lie in those studios' pipeline, it wasn't coming until 2029 at best. Five years times their burn rate, likely over $100M each. Even for MS, $100M is not spare change.

The data leaking via Bloomberg says TANGO and ARKANE Austin were *preparing* to propose new projects. Hifi Rush came out 15 months ago. And in that time they were doing what? Ditto for Auxtin.

In the other thread I pointed out that XBOX had anywhere from 42 to 60+ development teams and even after excluding the live service games and the inminent (2024-26) releases, even Game Pass can't absorb all that output in *today's* economy. It could, in the world of 2021 when they *oportunistically* took advantage of ABK drama to pick it up on the cheap. (And make no mistake, it was a bargain.) In the interview, Bond pointed out that in 2023's historically great games lineup, the industry as a whole did *not* grow. More games going to the same number of gamers, while the development costs go up?

Something had to give.
And it did. And is.

It may be a cliche, but "It's just business." A business where each studio is soaking up tens of millions each year with no guarantee of a profit after five ydars or more.

Until the industry starts growing again, times will be tough on everybody.
But especially for any group without a tech specialty (ID, BETHESDA SOFTWORKS, the COD studios, Blizzard, King) or a deep pipeline of games in process (ARCANE LYON, Obsidian, InXile, etc) is at risk. An even those will see their "duplicate" support personnel at risk.

If that's not enough, remember "AI" will allow less people to do more work in '23 than in '21.

Also remember that for consumers, gaming is *not* life or death; eating and housing is. If the economy goes on as is much longer, people won't be pining for 2021 but for 2024.

So, why is MS quietly taking the flack?
"The buck stops here." No point in blaming underperforming games. (Great reviews are no guarantee of sales, you know.)
They don't want to spook investors in the midst of the AI hype.
They expect Hellblade hype to paper over the outrage.
The coming drama at other publishers will take over the news cyc!e.
FALLOUT fever will boost their numbers.
The june dog and pony show.
The XBOX mobile store will launch in july.
ABK games coming to Game Pass.
Some COD on game pass. Maybe all.
AVOWED.
New COD.
All of the above?

Think of it as triage ahead of the summer hype season.
Getting the bad news out of the way early.

Just don't forget these may soon be "the good old days".
(gulp)
 
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