Advertising Agencies Are Not So Happy With Microsoft’s Decision To Shutdown Xbox Entertainment Studios

As part of the massive layoffs announced at Microsoft, Microsoft announced that they are going to shut down the recently formed Xbox Entertainment Studios which was responsible for creating original programming for Xbox platform. CBS entertainment president Nancy Tellem was hired by Microsoft back in 2012 to lead these efforts and their recent production was “Every Street United” which was premiered on Xbox One during the world cup.

Following was the announcement from Xbox head Phil Spencer,

As part of the planned reduction to our overall workforce announced today and in light of our organization’s mission, 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 recognize the accomplishments from the entire team in XES. They have built an impressive slate of original programming and pioneered interactive entertainment on Xbox, such as the innovative reality series ‘Every Street United’ that succeeded in uniting audiences around the globe during the recent World Cup. I am pleased that Nancy, Jordan and members of the XES team remain committed to new, original programming already in production like the upcoming documentary series ‘Signal to Noise’ whose first installment takes on the rise and fall of gaming icon Atari and of course, the upcoming game franchise series ‘Halo: Nightfall,’ and the ‘Halo’ Television series which will continue as planned with 343 Industries.  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. 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 organizational change in any way and remain an important component of our Xbox strategy.

Even though gamers may feel happy about Microsoft renewed focus on games, advertisers are not happy. In the recent report from WSJ, Microsoft decision to shit down XES has shocked and angered several top ad buyers and they are questioning Microsoft’s commitment to advertising.

……..the abandonment of the original content strategy makes top ad buyers feel like the rug has been pulled out from under them.

“Unfortunately it does feel like that,” said Steve Carbone, managing director and head of digital and analytics at MediaCom. “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.”

Vik Kathuria, Global Chief Media Officer at Razorfish, said the move felt short sighted, given Xbox’s potential. ”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.”

Even though XES is getting shutdown, Microsoft is showing renewed commitments towards advertising in Bing, MSN and Xbox. Read the whole story from the link below.

Source: WSJ