There are two reasons why all those Bethesda studios were closed, and neither of them have anything to do with Bethesda (directly)…
Game Pass and Activision.
The biggest paradox of Game Pass is that basically every game released on the service fails to meet its sales targets. However, this makes sense, as many subscribers think there is no point in paying full price for a game when you can play it “for free” as part of your subscription. This is partially remedied by attributing some of the profit to Game Pass games that perform well monthly, but there are factors working against the games. Namely, the fact that most games don’t stay at the top of the charts for more than a month or two, and also that Game Pass’s growth has stagnated. So games like Hi-Fi Rush, which is amazing, mind you, get a small bump in revenue from being the most popular game on Game Pass for a month, and then fall off a cliff as subscriber interest moves on to the next one. game. Poor Redfall was even worse because it was released in such a negative light that it never had a chance to stand out.
This system worked well for a while when Game Pass was growing massively, but now that growth has slowed and the amount of revenue it allocates to games isn’t keeping up with the budgets to produce them.
But all of this wouldn’t have mattered 3 or 4 years ago, because at that time the Xbox was basically a rounding error on Microsoft’s books. The split made some money, but most importantly it didn’t cost that much and other parts of the business easily covered the gap. Then Xbox went on a buying spree and spent a lot of money on Bethesda, but a lot more on Activision. Now, the “Eye of Sauron” has woken up and it is expected that Xbox will begin to recover this US$70 billion, or at least cut expenses violently to try to reverse the situation.
This brings us back to Game Pass. So far, the big bets to attract new subscribers (Redfall, Starfield) haven’t stimulated enough growth, and there’s not much on the horizon that could reignite consumer interest. The best bet is Call of Duty, but would you really risk the guaranteed sales revenue the franchise brings in by putting it on Game Pass on day one and potentially missing out on massive sales? I don’t know what the plans are, but either you put it on Game Pass and lose money, or you don’t and subscribers revolt because they think that’s why they signed up for the service.
Call of Duty will be fine, as will other mega-studios with huge intellectual properties, but you’re seeing the impact; all those smaller studios that make really interesting games will disappear, simply because, no matter how good games like Hi-Fi Rush are, they will never make enough money to make up for that $70 billion hole that Xbox now needs to plug.
