Microsoft said it planned to shut down two of its game development studios based in Europe, including the maker of the Fable fantasy series.
The company said it would abandon the development of a new version of the game, Fable Legends, and is talking to employees of Lionhead Studios, the development team in Britain behind the game, about its “proposed closure.”
Additionally, Microsoft said it planned to close Press Play Studios, based in Denmark, and cease development of a game called Project Knoxville.
In a blog post, Hanno Lemke, general manager of Microsoft Studios Europe, offered no explanation for the company’s decision to shutter the two studios, describing the moves as “tough decisions.”
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In a separate statement, Microsoft said the “changes were not made lightly, but were done as we continue to evaluate how all the games in our portfolio fit with our long-term vision to make Xbox and Windows 10 the best places to play.”
Microsoft has been looking for ways to cut costs and close unprofitable projects. Sales of the company’s latest games console, the Xbox One, have fallen behind that of Sony’s PlayStation 4.
Initially, Microsoft priced the Xbox One higher than the PlayStation 4 because it bundled its Kinect camera sensor with the console. It has since released a less expensive version of the Xbox without the Kinect.
With a smaller base of console owners to sell the latest games to, publishers have less opportunity to profit, which makes games with more narrow audiences tougher to justify.
Michael Pachter, an analyst at Wedbush Securities, said he had little doubt that Microsoft would continue to develop top-selling games like Halo and Gears of War for the Xbox, along with smaller projects.
But he said some games like Fable, with significant development budgets and middling sales, were no longer worth the investment for Microsoft. Mr. Pachter estimated that the Fable games, over more than a decade of history, have sold around seven million copies.
Date: March 8, 2016