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Microsoft abandons plans to take on Netflix with original Xbox TV shows

Microsoft abandons plans to take on Netflix with original Xbox TV shows

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Microsoft’s Xbox Originals, a series of original television projects, only debuted in June, but they’re already the casualty of CEO Satya Nadella’s new restructuring. Recode reports that Microsoft will shut down its Xbox Entertainment Studios, cutting positions as part of the 18,000 job eliminations planned over the next 12 months. Microsoft had big plans for its Xbox Entertainment Studios, including a much-anticipated Halo series that Steven Spielberg is executive producing. In an internal memo to Xbox employees, Xbox chief Phil Spencer notes that the Halo series will continue, alongside Signal to Noise, but Microsoft will not produce future projects.

Xbox Originals debuted last month with the reality series Every Street United, focusing on street soccer ahead of the World Cup. Microsoft’s original TV series was supposed to take on the likes of Amazon and Netflix, with a diverse array of programing designed for the new entertainment focus with the Xbox One. Microsoft CEO Satya Nadella recently called for a focus on productivity across cloud and mobile in an employee memo, areas that Xbox doesn’t serve currently. However, Nadella did note "Microsoft will continue to vigorously innovate and delight gamers with Xbox." A move away from an Xbox entertainment focus comes shortly after Microsoft revealed its console sales doubled last month thanks to a new $399 Kinect-free version of the Xbox One. Microsoft’s new Xbox leader, Phil Spencer, is also focused heavily on the gaming aspects of the Xbox.

Update, 1:47PM ET: We've received a copy of Phil Spencer's internal memo to Xbox employees. The article has been updated to reflect this, and the memo is available below.

I hope you have had a chance to read today’s mails from Satya. I wanted to take a moment to share a few thoughts on what this means for our team and some of the changes we are making as a result.

In last week’s mail outlining some of the steps towards creating the culture and organization to bring our ambitions to life, Satya called out the strategic importance of Xbox as a strong consumer brand, a creative center for gaming and a leader in bold innovation. Every member of Team Xbox should be incredibly proud of the impact and reach your work has within the walls of Microsoft, with our developer community and most importantly, with consumers.

Microsoft is the productivity and platform company for a mobile-first and cloud-first world, and games are the single biggest digital life category in a mobile-first world. Success in this category, by growing a robust Xbox business, brings additional value to Microsoft. I have stated this before, but for Xbox to be successful, we must remain committed to being a consumer-driven organization with the mission of meeting the high expectations of a passionate fan base, to create the best games and to drive technical innovation.

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.

Change is never easy, but I believe the changes announced today help us better align with our long-term goals. We have an incredible opportunity ahead of us to define what the next generation of gaming looks like for the growing Xbox community. I have a great deal of confidence in this team and know that with clarity of focus on our mission and our customers we can accomplish great things together. We already have.

Thank you again for all you do for Xbox.