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Lionhead shutdown shines a light on Microsoft Studios

By Rob Fahey

Lionhead shutdown shines a light on Microsoft Studios

Tue 08 Mar 2016 8:29am GMT / 3:29am EST / 12:29am PST

First-party development for Xbox One has slowed to a trickle; does Microsoft's third-party focus see Xbox as part of the Windows 10 ecosystem?

Lionhead Studios

In 1987 Peter Molyneux founded Bullfrog Productions, along with his then partner Les Edgar in Guildford,...

lionhead.com

Microsoft's decision to shut down Lionhead is sad news for the studio's staff, and a blow both to British development in general and to the vibrant game development scene around the southern town of Guildford in particular. As one of several studios created by key figures from the legendary Bullfrog Entertainment, Lionhead has been a pillar of the UK games industry for almost 20 years - and its fate, sadly, has mirrored that of its predecessor to an unfortunate degree. Bullfrog was acquired by EA, saw its staff, resources and franchises mismanaged and was ultimately shut down; Lionhead's experience since being acquired by Microsoft has been grimly similar. With the end of the studio comes the effective end of the Fable franchise, which in recent years had been reduced to an ill-considered Kinect game and the now-cancelled free-to-play co-op RPG Fable Legends.

A clue to the thinking at Microsoft Studios comes from the fact that Lionhead isn't the only studio facing the end of the line this week. Danish team Press Play Studios is also being shuttered, and just like Lionhead, it's a studio shutdown accompanied by the outright cancellation of the project it was working on, a third-person survival title codenamed Project Knoxville. The shutting of Lionhead and Press Play represents a huge loss to Microsoft Studios' European development capacity; what remains is British studio Rare, which is working on Xbox One and Windows title Sea of Thieves, Minecraft creators Mojang in Sweden, and Lift London, which is thought to be working on tablet and mobile titles (its website hints at Hololens concepts as well).

"Fable Legends made it all the way through years of development to a fairly fully-featured beta before being cancelled, which suggests a failure of management on Microsoft's part"

The closures also remove two major titles from the Xbox One's release schedule - Fable Legends and Project Knoxville - though it's fair to assume that the closures themselves wouldn't have come about if Microsoft Studios management still had confidence in those titles. Projects being cancelled for not being up to scratch isn't anything new or noteworthy in the games business; it's a natural part of the creative process that some things are attempted that don't work out. What is noteworthy is that Microsoft Studios seemingly failed to address those problems earlier in development - Fable Legends made it all the way through years of development to a fairly fully-featured beta before being cancelled, which suggests a failure of management on Microsoft's part - and that the company's approach to the cancellations has been to shutter both of the studios involved, instead of moving them on to new projects. If it were one studio, you could argue that there were specific problems which had caused Microsoft Studios to lose faith in it overall; shuttering two studios in one week feels more like a policy decision.

As a consequence, the closure of Lionhead and Press Play casts a bright light on the broader status of Microsoft Studios' current policies and line-up. On the European side, the company has one confirmed Xbox One game in development at a first-party studio - Rare's Sea of Thieves. On the other side of the Atlantic, Microsoft Studios' efforts primarily focus around 343 Industries, which has inherited the Halo franchise from Bungie, Forza studio Turn 10, and The Coalition (formerly Black Tusk), which has been handed the Gears of War IP that Microsoft bought from Epic Games.

Of course these aren't the only Xbox One exclusives in development - Microsoft also has relationships with third-parties ranging from European teams Remedy (Quantum Break), Reagent Games (Crackdown 3) and Creative Assembly (Halo Wars 2) to Japan's Platinum Games (Scalebound) and Comcept (ReCore). Some of those relationships will yield Xbox One exclusive titles in 2016 while others are more long-term and unlikely to produce launches until 2017, but nonetheless, the point I'm making isn't that Xbox One is going to be bereft of exclusive games; rather, it's that Microsoft feels like it's fairly rapidly abandoning the first-party studio model as its means of securing those games.

"with Project Knoxville canned, the only original IP the company is putting its first-party weight behind is Rare's Sea of Thieves"

Just look at what's being developed in-house at Microsoft right now; with Project Knoxville canned, the only original IP the company is putting its first-party weight behind is Rare's Sea of Thieves. Turn 10, of course, are the originators of the Forza franchise and continue to work on it - but Microsoft's other studios are both in-house teams who have taken over work on a major Xbox franchise created by a different developer that has gone on to work on something else (Bungie in the case of Halo, Epic in the case of Gears of War). The Coalition's work on Gears of War has yet to take a public bow (with the exception of their somewhat bland reworking of the original game into HD last year) and may yet turn out to be excellent, but 343 Industries' most recent outing, Halo 5 Guardians, seems to have done little to halt the decline in the Halo series' popularity. It's a peculiarly anaemic and backwards-looking haul of games for a company in desperate need of big-hitting titles to turn attention back to Xbox One from the still-dominant PS4.

Instead, Microsoft is turning to third-party studios for those big hitters - either handing its IP to them (as in the case of Halo Wars 2 and Crackdown 3), or funding the development of original IP (Quantum Break, Scalebound, ReCore). This model is a core part of the approach of any platform holder - Sony also relies on third-party developers for many of its big titles, and even Nintendo cultivates relationships like this on a regular basis - but it's generally balanced against extremely active first-party in-house development for a variety of reasons, ranging from control (both creative and otherwise) and reliability to the value of keeping significant game development know-how in-house for the purposes of future hardware and software development. Nintendo is particularly noted for involving its in-house game developers in the process of designing new consoles, while the ease of development for Sony's PS4 is often attributed to greater consultation with the firm's in-house software teams than had occurred on the notoriously difficult PS3. The point is, other platform holders find significant value in keeping some high-profile development in-house, and often deliver their platform's biggest and most impressive exclusive titles through that route; Microsoft, though, is clearly moving towards a different path.

"a vision in which the Xbox brand and services are a games and media adjunct to Windows 10's ecosystem, and the Xbox hardware itself is a regularly updated low-cost Windows 10 platform designed as a games and media box for the living room"

This may well fit with the firm's new vision for Xbox' role in its product family, as hinted at by Phil Spencer a couple of weeks ago - a vision in which the Xbox brand and services are a games and media adjunct to Windows 10's ecosystem, and the Xbox hardware itself is a regularly updated low-cost Windows 10 platform designed as a games and media box for the living room. Platform, platform, platform; that's what Microsoft is all about, and where Xbox appears to be headed. Continuing to function as a publisher of high-profile system-selling software (for Windows 10 and Xbox, for as long as those continue to be separate things) might make sense; the ongoing cost and overhead of maintaining fully-funded in-house teams fits rather less comfortably with the model.

I maintain that this year will see Microsoft execute, or at least begin to execute, one of the most dramatic pivots the games industry has ever seen - shifting the Xbox division from what was essentially a copy of Sony's PlayStation business model to something entirely new and more aligned with the strengths and requirements of the Windows 10 business. Regardless of the success or failure of that pivot, I believe it to be a worthy and necessary effort, for the simple reason that I can't see Microsoft's senior management continuing to back Xbox if it doesn't mesh with the company's other businesses. What's clear from this week's studio closures, though, is that the pivot is going to be extremely painful for some parts of the business - particularly (and desperately unfairly to the staff impacted) those which are still executing on bad planning and management dating back to the Xbox One's original abortive vision. Lionhead in particular found itself a chew-toy for Microsoft Studios in recent years, wasted on a Kinect vanity title and then a poor-fitting F2P effort; now the studio and its staff are paying the price for that bungling, as the new, far more competent management of Xbox judges them unnecessary for the pivot to come. In a year or two's time, the Xbox / Windows 10 platform that emerges from these changes may well be a stronger, better environment for developers and consumers alike; that will be cold comfort for those in England and Denmark facing a job-hunt this week.

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8 Comments

Alan Blighe Research Associate

28 77 2.8
Best of luck to everyone affected - never a good time to be out of work.

Posted:2 months ago

#1

Nick McCrea Gentleman, Pocket Starship

275 708 2.6
What are the strengths and requirements of aligning the Xbox division with Windows? How does this happen and what does it mean for the respective audiences?

I can see there's an attempt to unify the underlying APIs of both platforms, so ports become easier (though, from experience, even ports when you're on cross-platform middleware are rarely trouble free).

But what's the end game? How does this transform the fortunes of either business? Making Xbox development more open to PC devs will mean more indie and niche games. Great for me, but is it going to transform the Xbox business? Being able to play Xbox One games on PC is cool, but is it transformative?

Can anyone paint me a vision of how this is meant to work? Or is this the usual Microsoft case of working backwards from the desired revenues and retrofitting the rest of the strategy in some kind of hopeful arrangement, closing your eyes and crossing your fingers?

Posted:2 months ago

#2

Morville O'Driscoll Blogger & Critic

1,977 2,268 1.1
Popular Comment
MS's actions are... I think they're they're the very definition of confused.

We know that UWP (and thus the Win10 Store strategy) has been on the agenda for at least 18 months, because of what Tim Sweeney has said. That being the case, why has everything collapsed in on itself now? 2 studios closing, a game that's part of a long franchise killed after a long beta test, sudden announcements of Win10 versions of previous Xbox One exclusives, leaks regarding future Win10 releases. These are very obvious signs of something being wrong, and not just a change of policy.

You can see by the stealth release of Gears Ultimate Edition on PC that MS are now running around like a chicken with its head cut off - no marketing, apparently untested on AMD graphics cards, released on a store which has download problems, with Phil Spencer saying that fixes will come for both game and store. And that is not the behaviour of a company trying to rally around a new policy, but the behaviour of a company rushing product out the door. As I say, confused.
Regardless of the success or failure of that pivot, I believe it to be a worthy and necessary effort, for the simple reason that I can't see Microsoft's senior management continuing to back Xbox if it doesn't mesh with the company's other businesses.
And I think this is it in a nutshell. MS wants to leave the games business, and this is their last-ditch effort to make some quick bucks on it, leveraging their OS share to do so. I wonder if they realise that they projecting such a weak image and position, one-foot-out-the-door, and all. And I wonder if things would be better all-round if they just left the industry entirely? It's all-well-and-good saying this is policy, but if the policy is so confused, what benefit is there, for anyone? Aside from the corporate entity known as Microsoft.

Edited 5 times. Last edit by Morville O'Driscoll on 8th March 2016 11:14am

Posted:2 months ago

#3

Richard Browne Partner & Head of Interactive, Many Rivers Productions

200 280 1.4
I don't think they want to leave the games business, but it all may be a tacit admission that a dedicated gaming console is not necessarily the future.

Posted:2 months ago

#4

Morville O'Driscoll Blogger & Critic

1,977 2,268 1.1
but it all may be a tacit admission that a dedicated gaming console is not necessarily the future.
Which is an entirely fair-enough business strategy (and not so tacit when you read some remarks by Phil Spencer :D ).

But what isn't a fair-enough business strategy is, for example, locking down the games you're publishing to a store that, whilst it's embedded in your own OS, has less features than others on the market, less immediate customers than others on the market, and has worse publicity than others on the market, even though it's been an internal project for 2 years.

If we assume that everything MS is currently doing is part of a plan, and we look at the state of its games developing and publishing businesses, its games hardware business, and its attempts at pulling in core gamers to the Win10 Store, what can we extrapolate as the end result of its plan? Especially given what we know of MS as a company.

Posted:2 months ago

#5

Sandy Lobban , Noise Me Up

375 312 0.8
I don't think it's anything to do leaving the games business. It's more about how can we operate effectively and efficiently in the business of games. Big studios previously got attention from their ability to turn out game engine technology that no one else had, resulting in investment in those businesses. That has changed and exclusive deals can be made in other ways that don't require such long terms commitments. As with anything its adapt or die, and I think this is microsoft adapting before they start subsidising an area of their business. First party studios will exist as part of a core team that can launch the technology, but a platform holder doesn't have to have the same deep ties for content these days. The game creation tools are in the hands of many. You just need to look at how apple operate and you see that it works.

Posted:2 months ago

#6

Nick McCrea Gentleman, Pocket Starship

275 708 2.6
Sony seem to have a completely different view on owning and operating a stable of prime first-party studios, so I don't think this is all that self-evident.

Posted:2 months ago

#7

Michael Vandendriessche Studying Computer Science, K.U. Leuven

90 13 0.1
I believe Sony as a company has games much closer to it's core than Microsoft. Xbox (since the 360 or since the first one?) has always been a media device in the first place that happens to be good at playing games.

Posted:2 months ago

#8

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