Advertising Agencies Are Not So Happy With Microsoft’s Decision To Shutdown Xbox Entertainment Studios

As part of the massive layoffs announced at Microsoft, Microsoft announced that they are going to shut down the recently formed Xbox Entertainment Studios which was responsible for creating original programming for Xbox platform. CBS entertainment president Nancy Tellem was hired by Microsoft back in 2012 to lead these efforts and their recent production was “Every Street United” which was premiered on Xbox One during the world cup.

Following was the announcement from Xbox head Phil Spencer,

As part of the planned reduction to our overall workforce announced today and in light of our organization’s mission, we plan to streamline a handful of portfolio and engineering development efforts across Xbox. One such plan is that, in the coming months, we expect to close Xbox Entertainment Studios. I would like to take this opportunity to recognize the accomplishments from the entire team in XES. They have built an impressive slate of original programming and pioneered interactive entertainment on Xbox, such as the innovative reality series ‘Every Street United’ that succeeded in uniting audiences around the globe during the recent World Cup. I am pleased that Nancy, Jordan and members of the XES team remain committed to new, original programming already in production like the upcoming documentary series ‘Signal to Noise’ whose first installment takes on the rise and fall of gaming icon Atari and of course, the upcoming game franchise series ‘Halo: Nightfall,’ and the ‘Halo’ Television series which will continue as planned with 343 Industries.  Xbox will continue to support and deliver interactive sports content like ‘NFL on Xbox,’ and we will continue to enhance our entertainment offering on console by innovating the TV experience through the monthly console updates. Additionally, our app partnerships with world-class content providers bringing entertainment, sports and TV content to Xbox customers around the world are not impacted by this organizational change in any way and remain an important component of our Xbox strategy.

Even though gamers may feel happy about Microsoft renewed focus on games, advertisers are not happy. In the recent report from WSJ, Microsoft decision to shit down XES has shocked and angered several top ad buyers and they are questioning Microsoft’s commitment to advertising.

……..the abandonment of the original content strategy makes top ad buyers feel like the rug has been pulled out from under them.

“Unfortunately it does feel like that,” said Steve Carbone, managing director and head of digital and analytics at MediaCom. “It puts us in a difficult space because we have been pushing Xbox’s program. It really makes us wonder if the commitment is there.”

Vik Kathuria, Global Chief Media Officer at Razorfish, said the move felt short sighted, given Xbox’s potential. ”It’s insane given that’s where the media business is headed…with one end focusing on programmatic and the other on original high-end content. Confidence will be hard to earn back after this.”

Even though XES is getting shutdown, Microsoft is showing renewed commitments towards advertising in Bing, MSN and Xbox. Read the whole story from the link below.

Source: WSJ

  • frankgrimes78

    MS just continues to disappoint me. I would gladly get the PS4 but have used it extensively and it has far more problems than the Xbone. I could care less about a few graphical improvements. That system has no upcoming exclusives and MS has a way better library already.
    That said they have no idea what they are doing, they spent 20 million in advertising in Spain I think it was. Where Sony has held firm for years, that would be 20 million they didn’t have to try and shave off through firing people.
    Making a Halo series? I’ll watch it and probably enjoy it but we are over saturated with content as it is, with no time to watch it all.
    Make games, buy studios and make new innovative games that utilize the incredible power of the Kinect without making it stupid. The kinect has been around long enough that some clever designers must have some ideas as to make it more integrated and less of a hindrance.

    • Not_true

      PS4/Sony exclusives Jun-Dec: The Last of Us Remastered, Driveclub, LittleBigPlanet 3, Infamous: First Light, Samurai Warriors 4, Natural Doctrine, Guilty Gear Xrd, Singstar, Resogun DLC, and lots of indies.

      PS4/Sony exclusives 2015 (announced): Bloodborne, The Order, Ratchet & Clank Remastered, Uncharted 4, Let It Die, Deep Down, and lots of indies.

      Well reviewed PS4 games not on XB1: Final Fantasy XIV, Resogun, Transistor, MLB 14, Injustice, Trine 2: Complete Story, TowerFall Ascension, Infamous 2nd Son, Don’t Starve, flower, War Thunder, DC Universe Online, Dead Nation, KZ Shadowfall, Dynasty Warriors 8, MotoGP 14, Yakuza Isshin and other Japanese games, etc.

  • troyrig

    Shift* down XES… You might want to fix that, though the typo might be more accurate.

    • LPHeadstrong

      I would have assumed shut* would be the intended word. Although I agree with you on the accuracy of it!

  • pdouglas

    I also strongly believe that MS shouldn’t have shut down Xbox Entertainment Studios. If MS wants to be a dominant, innovative player in the consumer market, getting rid of this organization which was doing great innovation in entertainment, significantly beyond MS’ competitors, puts the company at a disadvantage. Refocusing Xbox on games is fine; but MS really needs to go beyond that, if it wants to have considerable leverage in the living room, and not be upended by its competitors.

    All MS needed to do to address lagging Xbox One sales, was cut the price of the console, and make a significant effort to pump out more games. Beyond that, I believe MS should have groups concentrating on creating a set top box like Roku (optionally supported by Kinect), and creating apps on Windows and Windows Phone, which funnel content from XES and partners, to all these devices, supported by a subscription network.

    Maybe MS could spin off Xbox Entertainment Studios, and financially support it until it can stand on its own, while retaining part ownership of the company? I just think it is a bad idea to throw out an organization that is on the verge of bringing highly differentiated, innovative entertainment experiences to Xbox, in a way that puts MS significantly above its competitors.