For Variety VIP+ subscribers: Layoffs expose Xbox’s flawed first-party strategy as it struggles to keep up with PlayStation on exclusive games
With a headcount of more than 200K employees, it was inevitable that Microsoft would be a participant in the wave of layoffs sweeping the tech world.
But next to Mojang and its command of “Minecraft,” 343 and Bethesda represent some of the most important strategic first-party development at the console brand. 343 is the studio that has overseen Xbox’s landmark “Halo” franchise since Bungie parted ways with Microsoft in 2007, while Bethesda Game Studios is the premier team under publisher Bethesda Softworks spearheading the highly anticipated open-world space game “Starfield,” which will be a console exclusive for Xbox.
While the end of 2021 saw 343’s “Halo Infinite” release to strong sales, the 13% revenue decline a year later was “driven by declines in first-party content and a lower rate of monetization in third-party content,” per Microsoft’s filings. This shows how crucial exclusives can be in countering periods of overall sales decline throughout the industry.
Throughout the timeline of PlayStation Studios under Sony Interactive Entertainment, the norm has been to acquire first-party developers after successful launches for exclusives developed in a second-party capacity.
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