Another terrible day for the gaming industry.

Microsoft is shutting down four Bethesda studios, according to an email sent to staff on May 7. The subsidiaries that will shut down are the Redfall developer Arkane Austin, Hi-Fi Rush developer Tango Gameworks, Alpha Dog, and Roundhouse Games.

The email, first reported by IGN and reviewed by Bloomberg, was sent by Xbox Game Studios' head Matt Booty this morning. Booty said that the reason for shutting down the studios was due to a "reprioritization of titles and resources" and to prioritize investment in Bethesda's portfolio of "blockbuster games." Part of the staff will be relocated across other Bethesda projects, but layoffs are inevitable.

Out of the four studios, only Roundhouse Games will keep existing in some capacity as it will merge with ZeniMax Online Studios to work on The Elders Scrolls Online. The closure of Arkane Austin will also mean Microsoft will no longer update Redfall, though the servers will stay up.

The news comes as another shock to the gaming industry, which has been going through multiple layoffs and closures for the past one and a half years at least. Microsoft had already laid off 1,900 employees across Activision Blizzard and Xbox Game Studios earlier this year in January.

The gaming community on the closure of four Bethesda studios

Even making great games like Hi-Fi Rush doesn't seem enough nowadays (Image via Tango Gameworks)
Even making great games like Hi-Fi Rush doesn't seem enough nowadays (Image via Tango Gameworks)

The announcement of Tango Gameworks' closure was inevitably more highlighted than the others. After all, the studio released Hi-Fi Rush in January 2023, which went on to become a major hit. The innovating rhythm-based action game most notably won the award for Best Audio Design at The Game Awards 2023 and recently came out for PlayStation 5 in March.

As expected, many fans heavily criticized Microsoft for shutting down these four Bethesda Studios. One of the most vocal critics came from Dinga Bakaba, a co-creative director at Arkane Lyon.

"This is absolutely terrible," Bakaba said in a long thread on X. "To any executive reading this, friendly reminder that video games are an entertainment/cultural industry, and your business as a corporation is to take care of your artists/entertainers and help them create value for you."

While the news broke out today, we'll most likely know the exact number of staff affected at a later date, after Microsoft finishes realocating the workers from Arkane Austin, Tango Gameworks, Alpha Dog, and Roundhouse Games across other Bethesda projects.

That's all for now. Stay tuned to for more gaming news.

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