James Lee 11:34 (BST)
10/09/2008

Alex St John, CEO of WildTangent, has said that Sony and Microsoft will continue to close internal studios as both companies strive to become profitable.

Speaking to GamesIndustry.biz, St John commented that Microsoft was "ramping down" it's investment in the Xbox 360 and was entering a "recovery phase". He said that console makers were keen to become profitable and would no longer take on the risk of developing their own titles.

"You will clearly see Sony and Microsoft ramping down their investment in those platforms... What's interesting to note is that Microsoft [Game] Studios: the number of titles they're producing is in decline. So they're investing a lot less in the Xbox, and Sony is doing the same, because they're in a cost recovery phase," he said.

The comments came as Microsoft revealed plans to close Ensemble Studios, as soon as the developer has finished work on Halo Wars. In a leaked email, Phil Spencer, head of Microsoft Game Studios, said: "It became clear to us that closing the studio and redeploying those resources to other more scalable ventures is the right thing for our business at this time."

St John explained: "They've spent billions trying to be profitable, and the consoles have enough developers making games for them that they do not have to take the risk on investing in games for their own platform in order to drive the market for them."