Tango Gameworks was in the process of pitching a Hi-Fi Rush sequel and wanted to hire additional staff before its sudden closure, according to a new Bloomberg report.
The report, which sheds additional light on the closures of Tango Gameworks and Redfall developer Arkane Austin, claims that Xbox leadership felt that the overall studio system was "spread too thin," with president Matt Booty reportedly likening it to "peanut butter on bread."
IGN first broke the news of the closures on Tuesday along with a report that Arkane Austin was working on DLC for Redfall before it was closed.
While little was revealed about the proposed sequel, Tango Gameworks was reportedly seeking to hire additional staff despite the departure of founder Shinji Mikami in 2023. Xbox previously called Hi-Fi Rush a "breakout hit for us and our players in all key measurements and expectations."
Tango Gameworks wasn't the only studio considering a new game. Arkane Austin apparently wanted to return to its roots with a new single-player immersive sim, according to the report. Arkane Austin is famous for its work on Prey, which became a cult favorite after a difficult launch in 2017.
In a follow-up tweet, reporter Jason Schreier clarified that both projects were still in the pitching phase and thus considered to be years away. Both studios were ultimately shut down alongside Mighty Doom developer Alpha Dog Games, while Roundhouse Studios was absorbed by ZeniMax Online Studios. Xbox reportedly isn't finished cutting costs as it offers severance to ZeniMax employees who opt to accept a voluntary buyout.
ZeniMax studios head Jill Braff, as well as Matt Booty, both attributed the closures to desire to consolidate and pure more focus on fewer projects.
"It’s hard to support nine studios all across the world with a lean central team with an ever-growing plate of things to do," Braff reportedly said in a town hall meeting. "I think we were about to topple over."
Xbox has been heavily cutting back its studios for much of the year, including heavy reductions to Activision Blizzard in January. The cutbacks have sparked shock and anger throughout the games industry, which has been rattled by layoffs throughout 2023 and 2024. Arkane Lyon head Dinga Bakaba was among those to criticize Xbox for Tuesday's closures, asking executives not to throw artists and entertainers into their "gold fever gambits.
I just want to say that I love all the people at Arkane Austin so much. Great times, hard times, we went through so much, together. Of course, today's news is terrible, for all of us. Your talent will lift you up, and I will do anything I can to help.
— Harvey Smith (@Harvey1966) May 7, 2024
According to a report by The Verge, there is uncertainty over what the future holds down for Xbox as Game Pass slows and Xbox sales drop. Senua's Saga: Hellblade II, which is slated to release on May 21, was briefly promoted in a tweet on Wednesday, but otherwise has received little marketing. Xbox is also reportedly considering raising the price of Xbox Game Pass Ultimate again as it weighs putting Call of Duty on the service.
In the meantime, developers are struggling to pick up the pieces, with former Arkane Austin developer Harvey Smith among those paying tribute to the shuttered studios. "I just want to say that I love all the people at Arkane Austin so much. Great times, hard times, we went through so much, together," he wrote. "Of course, today's news is terrible, for all of us. Your talent will lift you up, and I will do anything I can to help."
Kat Bailey is IGN's News Director as well as co-host of Nintendo Voice Chat. Have a tip? Send her a DM at @the_katbot.
