Tango Gameworks was preparing a sequel to Hi-Fi Rush

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As reported yesterday, Microsoft has shut down four studios, including Tokyo-based Tango Gameworks, which released the critically acclaimed action game. Hi Fi Rush. Sources said Tango was in the process of releasing a second part. Bloombergwho requested anonymity because they discussed non-public information.

The sudden closure of several studios in Microsoft’s Xbox division was the result of a widespread cost-cutting initiative that has not yet been completed. Xbox this week began offering voluntary severance agreements to producers, QA testers and other employees at ZeniMax, which was acquired in 2020 for $7.5 billion. Other members of the Xbox organization have been informed that more cuts are on the way.

During a meeting with the ZeniMax team on Wednesday morning, Xbox head Matt Botti praised the device Hi Fi RushBut it did not specify why the company closed the development studio behind it, according to three people present.

Speaking about the broader closures, Botti said the company’s studios were too spread out — like “peanut butter on bread” — and that leaders across the department felt understaffed. He said they decided to close those studios to free up resources elsewhere.

Botti added that the closure of its subsidiary, Arkane Austin, which had long been developing games such as… victimhad nothing to do with the performance of their new multiplayer game, Redfallwhich was a commercial and critical failure.

Before its closure, Arkane was looking to return to its roots by launching a new single-player “immersive simulation” game, as a new InsultedAccording to those familiar with it.

Both Tango and Arkane released games last year and were looking to hire additional staff while introducing new projects, which Booty and Braff suggested was the main factor behind their closure. Shinji Mikami, founder and president of Tango Studio, left last year.