Microsoft Shuts Down Xbox Entertainment [Update]

Update: Nancy Tellem and Jordan Levin, two executives who headed up Xbox Entertainment Studios, have been let go as the corporation winds down the division.

In a statement released to GamesIndustry.biz, Microsoft wrote:

“Yes, we can confirm that Xbox Entertainment Studios has closed as part of the companywide restructuring announced by Microsoft last July.”

“Xbox Entertainment Studios has officially closed. Nancy and Jordan were key members and visionaries for the XES team, and we thank them for their leadership and many contributions.”

Original story follows: Following this morning's announcement that Microsoft will lay off up to 18,000 of its employees, the company has revealed it will shut down Xbox Entertainment Studios, the division responsible for original Xbox programming.

In a statement issued to GameSpot, Microsoft outlined its plans to "streamline a handful of portfolio and engineering development efforts across Xbox" This includes the shutdown of XES "in the coming month." Prior to this, it was unclear how the Xbox business would be affected by the layoffs; a report earlier this week suggested Xbox marketing employees would be let go, but that remains unconfirmed.

Some of XES' employees--including president Nancy Tellem and executive vice president Jordan Levin--will "stay on and remain committed to original programming already in production." This includes Signal to Noise--the documentary series that will cover, among other subjects, the Atari E.T. dig--as well as Halo: Nightfall and Steven Spielberg's Halo TV series. The Halo projects will both "continue as planned with 343 Industries," and things like entertainment apps and the ability to watch TV through the Xbox One will not be impacted by this move.

A week ago, Microsoft CEO Satya Nadella offered a show of support for the Xbox division, which the company has reportedly considered selling off. But his statement made no mention of Microsoft's attempts to develop original video programming in recent years. This programming was to include interactive content, but would not affect the "gamer-first" approach Microsoft was taking with the Xbox One.

Plans for a wide variety of content in addition to the shows mentioned above had already been announced. This includes a program from JASH (the comedy group comprised of Tim and Eric, Michael Cera, Sarah Silverman, and Reggie Watts) and a soccer reality series called Every Street United that already debuted on Xbox Live to coincide with the World Cup.

XES has reportedly had difficulties in the past securing deals for new content. It was always unclear how, exactly, the original programming XES was pursuing would be released, like whether it would only be available through Xbox platforms and, if so, if it would be for Xbox Live Gold members. We also never got any hard details on how the programming would be interactive, which is what Microsoft said would make this "a unique experience."

Tellem, a former CBS executive, joined Microsoft in 2012 to lead its efforts into the original programming business. XES was founded shortly thereafter and has been pursuing content ever since. In April, Tellem said the studio's work was still "in the early stages."

This strikes me as an unsurprising move, as the expansion into original programming never felt like a natural move for Xbox. And, as noted above, there was so much uncertainty about how it would all work, even after more than a year and a half, that it might be for the best that Microsoft moves on from this venture. If nothing else, combined with the company's showing at E3, it's hard to question that Xbox's focus has indeed been the games since Phil Spencer was promoted in March.

What do you make of the closure of XES? Let us know in the comments below.