Microsoft closes Bethesda's Arkane Austin, Alpha Dog Games, and Tango Gameworks, kills off one of its best new franchises in years in the process

What you need to know

• Microsoft Gaming is shutting down three studios under ZeniMax Media.

• Microsoft is closing Arkane Austin, Alpha Dog Games, and Tango Gameworks.

• Roundhouse Studios is being folded into ZeniMax Online Studios.

• Some members of Arkane Austin are being assigned to other studios.

A year of devastating cuts in the gaming industry is getting even worse.

Microsoft is shuttering multiple studios under ZeniMax Media, heavily affecting the Bethesda Softworks publishing wing of the Xbox first-party group. Arkane Austin (half of Arkane Studios based out of Austin, Texas in the U.S.) is being closed, as is Japanese developer Tango Gameworks and Canadian studio Alpha Dog Games.

Roundhouse Studios is moving to become part of ZeniMax Online Studios, the team that works on The Elder Scrolls Online and is also developing a new IP. Some members of Arkane Austin are being reassigned to other ZeniMax studios, though it's not clear which studios or how many staff are being relocated at this time.

You can read the full email from Microsoft Gaming president of Game Content and Studios Matt Booty below, which was passed to Windows Central by an anonymous source:

Today I’m sharing changes we are making to our Bethesda and ZeniMax teams. These changes are grounded in prioritizing high-impact titles and further investing in Bethesda’s portfolio of blockbuster games and beloved worlds which you have nurtured over many decades. 

 To double down on these franchises and invest to build new ones requires us to look across the business to identify the opportunities that are best positioned for success. This reprioritization of titles and resources means a few teams will be realigned to others and that some of our colleagues will be leaving us.

Here are the changes going into effect: 

 Arkane Austin – This studio will close with some members of the team joining other studios to work on projects across Bethesda. Arkane Austin has a history of making impactful and innovative games and it is a pedigree that everyone should be proud of. Redfall’s previous update will be its last as we end all development on the game. The game and its servers will remain online for players to enjoy and we will provide make-good offers to players who purchased the Hero DLC. 

Alpha Dog Studios – This studio will also close. We appreciate the team’s creativity in bringing Doom to new players. Mighty Doom will be sunset on August 7 and we will be turning off the ability for players to make any purchases in the game.

Tango Gameworks – Tango Gameworks will also close. We are thankful for their contributions to Bethesda and players around the world. Hi-Fi Rush will continue to be available to players on the platforms it is today.

Roundhouse Games – The team at Roundhouse Games will be joining ZeniMax Online Studios (ZOS). Roundhouse has played a key role in many of our recent game launches and bringing them into ZOS to work on The Elder Scrolls Online will mean we can do even more to grow the world that millions of players call home.

With this consolidation of our Bethesda studio teams, so that we can invest more deeply in our portfolio of games and new IP, a small number of roles across select Bethesda publishing and corporate teams will also be eliminated. 

Those whose roles will be impacted will be notified today, and we ask that you please treat your departing colleagues with respect and compassion. We will provide our full support to those who are impacted in today’s notifications and through their transitions, including severance benefits informed by local laws.

 These changes are not a reflection of the creativity and skill of the talented individuals at these teams or the risks they took to try new things. I acknowledge that these changes are also disruptive to the various support teams across ZeniMax and Bethesda that bring our games to market. We are making these tough decisions to create capacity to increase investment in other parts of our portfolio and focus on our priority games. 

 Bethesda remains one of the key pillars of Xbox with a strong portfolio of amazing games and thriving communities. As we look to the future, there is an impressive line-up of games on the horizon. In 2024 alone we have Starfield Shattered Space, Fallout 76 Skyline Valley, Indiana Jones and The Great Circle, and The Elder Scrolls Online’s Golden Road. As we align our plans and resources to best set ourselves up for success in this complex and changing industry, our teams across Arkane Lyon, Bethesda Game Studios, id Software, MachineGames, ZeniMax Online Studios and the Bethesda publishing and corporate teams will be well-positioned to build new IP, [sic] explore new game concepts.

A history of gaming culture being obliterated

Arkane Austin was one of many teams at Bethesda Softworks, being acquired alongside Arkane Lyon back in 2010. The studio helped co-develop the original Dishonored, which was critically acclaimed and both halves of Arkane Studios have helped carry on the legacy of immersive sims that is rare in big-budget gaming. Arkane Austin then went on to release Prey in 2017, as well as Redfall in 2023.

Tango Gameworks was founded in 2014, and the studio developed The Evil Within and The Evil Within 2. In 2023, the team released Hi-Fi Rush to critical acclaim, with the game receiving honors at the Game Awards and the BAFTAs.

Alpha Dog Games was acquired by ZeniMax Media in 2019. The team launched a mobile title, Mighty Doom, in 2023.

Second wave of layoffs at Microsoft Gaming

This comes as the second big wave of layoffs at Microsoft Gaming in under a few months. Earlier in the year, 1900 people were let go across Activision Blizzard, Xbox Game Studios, and ZeniMax Media. The vast majority of the employees who were let go were from the Activision Blizzard wing.

This is compounded by thousands of others who have been laid off in the past few months, including several hundred at Riot Games, over 500 at Take-Two Interactive, and 900 employees at Sony-owned PlayStation.

Analysis: A really bad move

There aren't words to describe how idiotic, short-sighted, and downright grim this move is, but I'll try.

Closing these teams signifies a death of creativity. It comes at a time when Microsoft has control of massive, major gaming franchises that are doing well. Fallout has seen a huge resurgence on the back of the Prime TV series, so why is ZeniMax seeing layoffs?

If any Xbox/ZeniMax employees would like to chat, I can be reached at the Signal number in my Twitter bio.