Microsoft has had an interesting week. After announcing that close to 18,000 employees would be receiving the cut, as well as the cancelation of Nokia's Android project, the company also shut down Xbox Entertainment Studios. This division was set up back in 2012 with the aim of creating original video content for the Xbox platform.
Microsoft had promised that the Xbox platform would become a carrier of original content, in an attempt to further convince gamers and entertainment-seekers that Microsoft's platform is better than the Sony PS4. Microsoft even pitched the original programming to advertisers and had planned to showcase what the Xbox is capable of to various advertisers, brands, and agencies over the next sixty days.
But, plans changed, and Microsoft announced earlier this week that Xbox Entertainment Studios was shutting down. This move has shocked and angered top advertisers who were committed to Microsoft's platform and were looking forward to the original content's money-making attirbutes.
"Unfortunately it does feel like that. It puts us in a difficult space because we have been pushing Xbox’s program. It really makes us wonder if the commitment is there," said Steve Carbone, managing director and head of digital and analytics at MediaCom. "It’s insane given that’s where the media business is headed…with one end focusing on programmatic and the other on original high-end content. Confidence will be hard to earn back after this," said Vik Kathuria, Global Chief Media Officer at Razorfish.
The Xbox still offers movies and TV shows, the original content Microsoft wanted to offer was quite appealing to advertisers. As the WSJ states, "While Xbox will still offer movies and TV shows, ad buyers saw original content as appealing, partly because much of the video entertainment offered on Xbox isn’t ad supported, instead being offered for sale or rental. As a result, the abandonment of the original content strategy makes top ad buyers feel like the rug has been pulled out from under them."
Some original programming will live on despite the Studios' shutdown. Halo Nightfall, te Halo Television seriesm, and Quantum Break (a live action TV show-video game hybrid) will still see the light of day.