Microsoft Corp. (NASDAQ:MSFT) is shuttering several Bethesda studios and merging at least two — Roundhouse Games and ZeniMax Online Studios — sending shockwaves through the gaming industry.

What Happened: According to IGN, the closures affect Arkane Austin, Tango Gameworks, and Alpha Dog Studios and will likely cause the cancellation of promised updates for various games.

Alpha Dog makes Mighty Doom; Arkane Austin develops Redfall; and Tango Gameworks makes Evil Within.

See Also: 2024 Gaming Industry Shakeup – Over 2,700 Layoffs Revealed In Past 11 Days

It’s not yet clear how many jobs will be lost.

In an email to staff, Matt Booty, head of Xbox Game Studios, explained that the cuts were part of a “reprioritization of titles and resources” to focus on high-impact projects within Bethesda’s portfolio.

“To double down on these franchises and invest to build new ones requires us to look across the business to identify the opportunities that are best positioned for success,” Booty said. “This reprioritization of titles and resources means a few teams will be realigned to others and that some of our colleagues will be leaving us.”

The impact of these decisions extends beyond the affected studios, with roles in Bethesda publishing and corporate teams also being eliminated. Microsoft reportedly assured affected employees of support during their transitions, including severance benefits.

Response To Microsoft’s Bethesda Studio Closures

Dinga Bakaba, chief of Arkane Lyon, a studio that survived the cuts, expressed dismay over the cuts. He called them “absolutely terrible” and criticized the industry’s treatment of developers.

He urges executives to prioritize the well-being of their teams.

“Don’t throw us into gold fever gambits, don’t use us as strawmen for miscalculations/blind spots, don’t make our work environments darwinist jungles,” Bakaba wrote.

“You say we make you proud when we make a good game. Make us proud when times are tough. We know you can, we seen it before,” he added.

Moreover, Mat Piscatella, Director and Video Game Industry Analyst at Circana, also shared his thoughts on the announcement: “What a brutal, cutthroat industry this can be.”

The closures come amid a wave of layoffs sweeping the video game industry, with estimates suggesting over 10,000 workers were affected in the previous year. Three months ago, the tech giant also cut 1,900 staff from its gaming workforce.

A survey conducted by the Game Developers Conference (GDC) indicated that one-third of all developers had been impacted by layoffs or witnessed them within their companies.

Despite these developments, Microsoft remains committed to its gaming endeavors, highlighting upcoming releases such as Starfield: Shattered Space, Fallout 76: Skyline Valley, Indiana Jones and The Great Circle, and The Elder Scrolls Online’s Golden Road.

Microsoft finalized its $7.5-billion acquisition of Bethesda in 202.

Read Next: Game Industry Braces For ‘Year of Closures’ In 2024, Report Says

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