Xbox Entertainment Studios, formed in 2012 to develop original programming for the Xbox, will be shutting its doors as a part of the massive restructuring currently underway at Microsoft. The division, run by former CBS Television Studios president Nancy Tellem, is being folded as Microsoft looks to narrow the Xbox's focus to video games. In a recent statement, Microsoft CEO Satya Nadella signalled this direction: “The single biggest digital life category, measured in both time and money spent, in a mobile-first world is gaming. We are fortunate to have Xbox in our family to go after this opportunity with unique and bold innovation. Microsoft will continue to vigorously innovate and delight gamers with Xbox.”
Xbox Entertainment Studios was originally created with the purpose of producing Xbox Live-exclusive video content. However, the division's execution has been lacking. The flagship program, based on the Halo series, has struggled to get off the ground since its initial announcement in May of 2013. The series, set to be produced by Steven Spielberg, will presumably continue forward with production, according to Xbox head Phil Spencer. However, concrete plans for its release and distribution remain unannounced.
Phil Spencer also announced that the company will remain committed to its "NFL on Xbox" programming, and confirmed the news of the Studio's closure. "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," said Spencer in a memo released today.
Microsoft has made a clear commitment to gaming with their recent price drop of the Xbox One, a move which inspired better sales numbers for the console in the month of June. With the closure of Xbox Entertainment Studios, it appears that the company is re-emphasizing the Xbox One's core functions, and moving away from the "all-in-one" entertainment system approach which they had previously marketed to consumers.