Microsoft has made the decision to close four Bethesda Softworks studios, including Tango Gameworks, the developer behind Hi-Fi Rush, and Arkane Austin, the team working on Redfall.

Xbox Game Studios head Matt Booty revealed in an email to staff, obtained by IGN, that this move is part of a strategic shift to focus on high-impact titles and invest further in Bethesda’s portfolio of popular games and worlds. This restructuring involves reassigning some teams and unfortunately, letting go of some employees.

The email specified the changes, which include the closure of Tango Gameworks and Arkane Austin. Additionally, the support studio Roundhouse Games will merge with The Elder Scrolls Online developer ZeniMax Online Studios. Mobile game developer Alpha Dog Games, known for Mighty Doom, will also be shut down. The publishing arm of the company will see a reduction in roles as well.

Alongside these changes, development on Redfall has stopped. Players who purchased the premium Bite Back Edition will receive compensation equivalent to the value of the upgrade. The game servers will remain active for players to enjoy, according to a statement from the official Redfall X / Twitter account.

While the full extent of the layoffs is not yet clear, our thoughts are with those affected by these studio closures. TechRadar has reached out to both Microsoft and Bethesda for comment, but has not received a response at this time.

The decision to close Tango Gameworks is puzzling, especially considering the success of Hi-Fi Rush. The studio’s unique rhythm-based combat system and impressive art direction were well-received, making it a standout title on Xbox platforms. Older titles like Ghostwire: Tokyo and The Evil Within 2 showcased the studio’s potential.

While Arkane Austin’s closure may seem reasonable due to the negative reception of Redfall, it overlooks the innovation demonstrated in their previous game, Prey. This move raises concerns about Microsoft’s approach to niche titles and the future of the Xbox brand.