Microsoft's Phil Spencer has confirmed Xbox Entertainment Studios will close as part of the company's recently announced cost-cutting plan.
Re/code sources claim that the branch was "disorganized" and "lacked a fully fleshed-out business model." The Santa Monica-based studio housed around 200 employees.
"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 wrote 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."
Earlier today, Microsoft revealed plans to cut 18,000 jobs as part of a company-wide cost-cutting process – though Microsoft’s Devices group boss Stephen Elop has clarified there will be “limited change” for Xbox hardware.
“With a set of changes already implemented earlier this year in these teams, this means there will be limited change for the Surface, Xbox hardware, PPI/meetings or next generation teams,” he said.