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Microsoft bails out of Netflix fight with Xbox Entertainment Studios shutdown

The bad news keeps coming out of Redmond
Fri Jul 18 2014, 11:08

Xbox Entertainment Studios logoMICROSOFT HAS ANNOUNCED PLANS to shutter its Xbox Entertainment Studios less than two months after it debuted in June.

Just a day after Microsoft CEO Satya Nadella announced plans to slash 18,000 jobs at the company, Phil Spencer, head of the firm's Xbox division announced the shutdown of Xbox Entertainment Studios (XES) in a memo sent to employees.

This news comes less than two months after the the launch of the service that Microsoft had hoped could challenge Netflix and Amazon with its focus on original TV content.

Spencer said in the letter seen by The Verge, "We plan to streamline a handful of portfolio and engineering development efforts across Xbox. One such plan is that, in the coming months, we expect to close Xbox Entertainment Studios. I would like to take this opportunity to recognise the accomplishments from the entire team in XES."

Spencer confirmed that the upcoming Halo TV series directed by Steven Spielberg will still go ahead, as will its upcoming documentary series Signal to Noise. Beyond that, however, Microsoft will not produce any further original TV shows.

"Xbox will continue to support and deliver interactive sports content like NFL on Xbox, and we will continue to enhance our entertainment offering on console by innovating the TV experience through the monthly console updates," Spencer added, underlining that the firm will no longer produce its own shows.

"Additionally, our app partnerships with world-class content providers bringing entertainment, sports and TV content to Xbox customers around the world are not impacted by this organisational change in any way and remain an important component of our Xbox strategy."

Spencer's announcement came just hours after Nadella announced plans to slash 14 percent of Microsoft's workforce, with 18,000 staff facing the chop - 12,500 of which will be from the firm's recently acquired Nokia division.

While that sounds bad enough - Geekwire reports that Microsoft also plans to cut jobs across its "shadow workforce" - vendors and contractors who work on Microsoft projects and products but are employed through third-party firms - which reportedly takes the total number of job cuts way above the 18,000 mark. µ


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