Xbox President Sarah Bond Responds to Bethesda Studio Cuts, Points to Lack of Industry Growth and Need to Manage the Business ‘Through This Moment of Transition’

Xbox president Sarah Bond responded to questions about Microsoft’s decision to close a number of popular studios this week, insisting it was to ensure the Xbox business remains healthy for the long term. term during what she called “this moment of transition.”

Microsoft shocked the gaming world by announcing the closure of Redfall and Prey developer Arkane Austin, Hi-Fi Rush and The Evil Within developer Tango Gameworks, and more with devastating cuts targeted at the gaming world. Bethesda owner ZeniMax.

Microsoft purchased ZeniMax Media, the parent company of developers like Bethesda, Arkane, id Software, and more, in 2021 for $7.5 billion. Since then, it has purchased Call of Duty maker Activision Blizzard for $69 billion.

In an email to staff from Xbox Game Studios head Matt Booty, Microsoft blamed the cuts on a “re-prioritization of titles and resources.” In the email, first reported by IGN, Booty said: “We are making these difficult decisions to create the capacity to increase investments in other parts of our portfolio and focus on our priority games.” »

Microsoft faced widespread criticism from the developer community and Xbox fans following the decision, with many pointing out that Hi-Fi Rush was a critically acclaimed release and, according to one Xbox executive, extremely successful.

Speaking in an interview with Bloomberg’s Dina Bass at Bloomberg Tech in San Francisco, Xbox President Sarah Bond was asked for the first time about the video game industry’s current lack of growth – a troubling factor which Xbox boss Phil Spencer highlighted recently when asked for an explanation of Microsoft’s decision. to cut 1,900 employees in its gaming business.

“You know, for the last year or so, in video games, the industry has been largely stagnant,” Bond responded. “And even in 2023, we’ve seen some great releases, extremely revolutionary games. But growth has not kept pace with all this. A lot of this has to do with our need to attract new players and make the game more accessible. But all of this has happened at the same time as the cost associated with creating these magnificent triple-A blockbuster games is increasing, as is the time it takes to make them.

“And so, as Xbox, a lot of our focus is on how we do things to help the industry grow, while also ensuring that our brand, everything we do, is here during this moment of transition.”

“It’s always extremely difficult to have to make decisions like this.

Bond was then asked directly about this week’s decision to close ZeniMax Studios. In response, she highlighted the industry’s current inability to significantly grow its audience and the desire to ensure Xbox survives this “transition.”

“You know, it’s always extremely difficult to have to make decisions like that,” Bond said. “I come back to what I was saying about the industry. And when we look at these fundamental trends, we feel a deep responsibility to ensure that the games we create, the devices we build, the services we offer are there at all times, even when the industry isn’t growing and you are growing. through a period of transition. And the news we announced earlier this week is the result of that and our commitment to ensuring the long-term health of the business.

“But that said, our commitment to having our own studios and working with partners to have games big and small, we are a platform where you can play GTA, but you can also play Palworld, where you can play to Call of Duty and you can also play Pentiment, that doesn’t change And frankly, our commitment to Bethesda and the role it plays is part of Xbox and everything we do.

“It’s actually been pretty fantastic. I don’t know if you’ve had a chance to check it out. The Fallout TV show was on Amazon and it was great to see people fall in love with that universe, but also what it did for the games themselves and for people going back and exploring everything that it contains. There are some other good things coming out of our studios later this year. Indiana Jones and the Great Circle. I was a huge Indy fan growing up. Looks like there were two of you, so you should check that out.

“But right now, for us and our teams, we are focused on those affected and doing everything we can to help them through this difficult transition.”

Image credit: Bloomberg Live / YouTube.
Image credit: Bloomberg Live / YouTube.

Bond was then asked specifically about the closure of Tango Gameworks in the context of the success of Hi-Fi Rush, and how it is possible that a studio behind an award-winning and seemingly commercially successful title could be shut down further. a year after its release.

Here is Bond’s response:

“You know, one of the things I really love about the games industry is that it’s a creative art form. And that means that the situation and successes of each studio game are also truly unique. There is no one-size-fits-all solution for us. So we look at every studio, every game team, and we look at a whole variety of factors when we’re faced with decisions and trade-offs like this. But it all comes back to our long-term commitment to the games we make, the devices we build, the services, and ensuring that we prepare ourselves to be able to deliver on those promises.

“We look at every studio, every game team, and we look at a whole variety of factors when we’re faced with decisions and trade-offs like this.

Bond’s response here is already going viral for not properly addressing the issue at hand. As IGN reported, Xbox executives held a town hall meeting with ZeniMax staff on Wednesday, May 8, and attempted to answer key questions regarding the decision to close Bethesda Studios. IGN understands that Booty told staff that Arkane Austin’s closure was not linked to the failure of last year’s disastrous Redfall, but rather to the studio’s future prospects. Jason Schreier of Bloomberg reported that ZeniMax was under pressure to make significant cuts and chose Tango Gameworks and Arkane Austin because they were in the process of launching projects that would have required increased investment, rather than studios already working on greenlit games. One person at the meeting told IGN that the suggestion was that because these studios were currently introducing new games, they had the weaker legs to stand on when it came to choosing who to remove.

At the public meeting, Booty reiterated that Hi-Fi Rush was a success, but, according to one person present, staff was told that the factors behind that success had changed over the past year and that the outlook for the studio had therefore deteriorated. As has been reported, Tango Gameworks had introduced Hi-Fi Rush 2 as a follow-up project. IGN understands that the pitch for Hi-Fi Rush 2 was rejected in part because it was deemed too expensive.

Underlying all of this are concerns about the overall health of the Xbox business and the gaming industry as a whole. Microsoft, currently worth more than $3 trillion, faces declining year-over-year revenue for its gaming business when Activision is removed from the equation, as well as stagnant growth of the number of Game Pass subscribers. Xbox console sales have collapsed as development costs rise. Add to that the reported increased internal scrutiny of Microsoft’s gaming business following the Activision Blizzard acquisition, and you have a recipe for disaster.

Image credit: Bloomberg Live / YouTube.

Wesley is the UK news editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at or confidentially at

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