Xbox CEO Asha Sharma has reportedly stated that the company "will not survive" if it relies solely on existing franchises, emphasizing the need for new intellectual property (IP). This assertion comes in the wake of significant layoffs impacting approximately 3,200 employees and the cancellation of multiple projects, including those at Obsidian and potentially affecting studios like Compulsion Games and Ninja Theory.
In an internal town hall, Sharma articulated a vision for Xbox that balances the support of strong, established franchises with the creation of "enduring new IP." She stressed the necessity of finding "new ways, and courage, to have invention on new IP, that reaches new sets of audiences," warning that a continued reliance on past successes is unsustainable. This statement, detailed by Windows Central, contrasts sharply with recent organizational changes.
Xbox's restructuring has seen several studios either reassigned or reorganized. Obsidian Entertainment, after having multiple projects canceled, has reportedly been tasked with developing a Fallout title. Compulsion Games, the studio behind "South of Midnight," and Double Fine have been shifted to independent operations. Arkane Lyon was also reportedly considered for cuts. Compulsion Games has since been confirmed to be looking for work.
This strategic pivot towards new IP appears contradictory to the actions taken. Many of the studios affected were known for their work on original or inventive titles. The move to focus on established franchises, while understandable from a financial perspective, has generated confusion and concern among developers, particularly given the scale of the recent workforce reductions.
One notable new IP initiative for Xbox is its publishing deal with Hideo Kojima for his upcoming game, "Physint." While not developed internally from its inception, it represents a new franchise under the Xbox publishing umbrella, developed by a renowned creator.
Despite these efforts, the discrepancy between Sharma's call for innovation in new IPs and the recent wave of layoffs and project cancellations has led to a sense of bewilderment within the industry. Developers who have recently experienced or are facing potential cuts feel a disconnect between leadership's pronouncements and the company's actions.