If you’d have asked us what was one of the most promising things to come out of Microsoft’s Xbox Media Briefing in 2013 we’d have probably told you it was Xbox Entertainment Studios, the part of the company that former CBS Executive Nancy Tellem had been tasked with building. We’re excited no more; not because that comedy based on Nas’ life doesn’t sound interesting, but because Microsoft is canning the entire project.
An email sent to Xbox One employees and reprinted on Re/Code tell the story. In that email, Xbox head Phil Spencer talks more about the 18,000 jobs Microsoft expects to shed company-wide over the next fiscal year. He doesn’t go into much detail about the direct departments that are being affected except for one: Xbox Entertainment Studios.
Effective immediately, Microsoft is cancelling most of the new content that the entertainment studio was working on. That Halo television series and Signal to Noise documentary will still happen but none of the other projects will. 200 of the employees Xbox Entertainment Studios had working on new content for Xbox Live are being let go. Meanwhile Nancy Tellum will stick around to complete Halo and Signal to Noise.
Clearly, new CEO Satya Nadella wanted to streamline the company’s operations. That being said, many of 12,000 of the employees laid off from Microsoft were actually from Microsoft Mobile, the devices and services business that Microsoft purchased from Nokia earlier this year. Many more were casualties of a new way Microsoft is thinking about testing software that it makes.
It’s hard not to see the shuttering of Xbox Entertainment Studios as a pretty reckless idea. By Microsoft’s own admission, video streaming accounts for a large portion of Xbox Live usage. Without any video content of its own, Microsoft is leaving the Xbox One, Xbox 360 and Xbox Live at the mercy of Netflix and Hulu Plus. Should one of these services disappear from Xbox Live, Microsoft would have a big problem on their hands. In recent years many users have flocked to streaming video services. Without a streaming video service or original content of its own, it seems Microsoft is perfectly fine letting Xbox Video, the on-demand video streaming service it already has, wither and die on the vine as users purchase less and less video content.
We still have absolutely no idea when Halo will début.