Microsoft's Phil Spencer in a memo to employees announced that the Xbox Entertainment Studio will be shutting down. Though he did not say how many of the 200 employees will be laid off.
Many sources have told Re/code that the studio was disorganized and lacked a cohesive plan. This turned off many potential partners. This in turn hurt its chances of securing premium content.
"As part of the planned reduction to our overall workforce announced today and in light of our organization's mission, we plan to streamline a handful of portfolio and engineering development efforts across Xbox. One such plan is that, in the coming months, we expect to close Xbox Entertainment Studios," Spencer said in a memo to the Xbox team.
"I am pleased that Nancy [Tellem], Jordan [Levin] and members of the XES team remain committed to new, original programming already in production like the upcoming documentary series 'Signal to Noise' whose first installment takes on the rise and fall of gaming icon Atari and of course, the upcoming game franchise series 'Halo: Nightfall,' and the 'Halo' Television series which will continue as planned with 343 Industries."
"Xbox will continue to support and deliver interactive sports content like 'NFL on Xbox,' and we will continue to enhance our entertainment offering on console by innovating the TV experience through the monthly console updates."
Despite the closure the studio will remain to work on the Halo: Nightfall television series, the Atari documentary, and the Quantum Break live action show.