Among the 18,000 layoffs by Microsoft this week is the closure of Xbox Entertainment Studios. Microsoft is trying to close the gap between the Xbox One and the PlayStation 4. In doing so, it has shifted its focus from being a total entertainment machine back to being a video game console. Xbox Entertainment projects were barely mentioned during E3 2014, and a new version of Xbox One without Kinect is selling better. Nancy Tellem, former CBS Entertainment president, will stay on. The much touted Steven Spielberg-produced Halo series is still coming, as is the documentary Signal to Noise. Xbox Entertainment employed about 200 people.
Gamers have responded positively to these policy changes, as the Microsoft from previous E3s was desperately trying to be all things to all people. The customers weren’t the only ones confused. Recode reports that potential partners for original content didn’t feel confident in the studio. That made it hard to secure the kind of projects Xbox Entertainment needed to be successful.
These lessons have been costly for Microsoft. Sony opted to make its PlayStation 4 camera feature optional, allowing it to sell the console for $100 less. Kinect’s biggest selling point for developers was that every Xbox One owner would have one. The peripheral is all but dead now. Its efforts to branch out into providing content earned mostly scorn and derision from the audience it was courting. There’s plenty of time for Microsoft to play catchup, however. Neither the PS4 or Xbox One has been flush with games that justify spending $400 on a new console. Many of the titles that would encourage that purchase have been delayed to 2015.