Microsoft shuts down Xbox Entertainment Studios video team as part of layoffs

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One of the first casualties of Microsoft’s massive layoffs will be the company’s Xbox Entertainment Studios, the company said, although some of its flagship entertainment offerings will remain.

Microsoft said Thursday that it would lay off 18,000 employees over the coming months, most of them from the Nokia device unit it formally acquired just a short time ago. A week ago, chief executive Satya Nadella pledged to streamline the business; on Thursday, the company revealed that another victim would be its Android experiment, the Nokia X.

Now you can add Microsoft’s bid to become a video content provider. Although some of the key talent that Microsoft hired will remain—Nancy Tellem, the former head of CBS Television; plus Jordan Levin, fomer CEO of the WB Network— they will have to find new homes. 

In a statement, Microsoft explained that while the Xbox remains a crucial part of the Microsoft ecosystem, its content business was not.

“As Satya said last week, Xbox is important to Microsoft," a Microsoft spokeswoman said in a statement. "Games are the single biggest digital life category in a mobile-first world.  And Xbox is a strong consumer brand with an incredible fan base. 

"As part of the planned reduction to our overall workforce announced today and in light of the Xbox vision to focus more on games and gamers, we plan to streamline a handful of portfolio and engineering development efforts across Xbox," the statement added. "One such plan is that we will expect to close Xbox Entertainment Studios in the coming months."

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Just so we're clear: the Xbox One is a game console. Got that?

Tellem, Levin and some of the Xbox Entertainment Studios team will stay on, Microsoft said, to help continue original programming already in progress. That includes the "Signal to Noise" documentary focusing on Atari, as well as the anticipated series ‘Halo: Nightfall,’ and the ‘Halo” television Series with 343 Industries, the company said.

"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," the Microsoft spokeswoman said. "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.”

So far now, it's back to basics. While Microsoft originally positioned the Xbox as an all-in-one entertainment devices, its E3 presentation focused exclusively on games. So aside from promoting Microsoft's existing franchises, video is no longer part of Microsoft's business.

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