The dust is still settling on Xbox’s “big reset” cuts and will continue to settle for a few more weeks.
Amy Hood, Microsoft’s CFO, led a major effort within the company, almost 5,000 employees are set to lose their roles next financial year. Of these, 3,200 will be exclusive to Xbox, and some will be discontinued. Despite the success stories of Grounded 2 and DOOM: The Dark Ages, the rest of the studios were “suffocated” by some accounts, with massive cuts at Obsidian and id Software.
The silver lining for some is that Xbox executives have spent the past few weeks trying to find buyers for studios that Microsoft’s CFO would otherwise have lined up to shut down. One of these is Undead Labs, the creators of State of Decay. those who have gone through hell and come back to reach where they are today.
Undead Labs was founded in 2009 and acquired in 2018 as Xbox sought to strengthen its exclusive content distribution for Xbox. The integration ran into immediate problems.
Undead Labs leader, co-founder and World of Warcraft alumnus Jeff Strain left the studio in 2019 not long after the acquisition, and then the firm was immediately hit by lockdowns heading into the Covid-19 pandemic. The confusion was palpable.
Undead Labs, unable to properly incubate State of Decay 3, was working on free updates for State of Decay 2 as Microsoft struggled to properly integrate the studio and teams. Despite State of Decay 3 being announced for 2020, it won’t actually enter full development until much later.
These should be mitigating factors as Microsoft’s bean counters look for ways to cut costs. But, in typical Microsoft disappointingly short-sighted fashion, Microsoft seems strangely unaware of the potential at hand.
Indeed, as of this writing, the state of Decay 3 is currently 28th most wanted game on Steam and outranks Halo Campaign Evolved and Gears of War: E-Day. When it comes to Xbox games, State of Decay 3 is second only to the big budget blockbuster Fairy tale.
State of Decay 3 was my most anticipated Xbox game this side of Clockwork Revolution. The first alpha previews we’ve gotten look incredible, and as a multiplayer game in development, it has painfully obvious potential alongside the likes of Grounded and Sea of Thieves.
It’s completely absurd and disappointing that Microsoft can’t just give them an offer for whatever reason. a little more time and they subsidize their mistakes. Microsoft banks billions of dollars every year, and there’s really no excuse for the disruption and havoc he inflicts on his teams.
I am not naive. I’m well aware that you have to have a business that makes money to get paid – at least eventually. But at the same time, Microsoft is among the following hyperscalers AI infrastructure spending based on theoretical growth, using models of companies funded entirely by theoretical money.
Of all the cuts and dumb choices Microsoft made this week, for me, above all, State of Decay 3 justifies how Microsoft’s fiscal management policies often lead to self-defeating mistakes in haste.
There are certainly projects at Xbox that shouldn’t have been greenlit, and strategic decisions that are decidedly questionable — but Microsoft is making a lot of confusing choices to compensate for those mistakes. To me, the fact that Xbox had to abandon State of Decay 3 really represents the height of Microsoft’s generalized ignorance.
In the future, I look forward to writing about how studios like Undead Labs have expanded and become Microsoft-free success stories. But there are hundreds of developers who are not so lucky.
Perhaps the thousands of Xbox employees who remain will benefit from a more focused Xbox management structure that doesn’t spread itself so thinly, but that remains to be seen. And maybe I’m being really naive here.
Microsoft has created an environment where every fiscal year ends in July, we write articles like this. Missed opportunities and the human cost of Microsoft’s legendary visionary impatience are recalled.
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