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Lionhead shutdown shines a light on Microsoft Studios

First-party development for Xbox One has slowed to a trickle; does Microsoft's third-party focus see Xbox as part of the Windows 10 ecosystem?

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gamesindustry.biz
Overload3715d ago (Edited 3715d ago )

This is a fantastic article.

"with Project Knoxville canned, the only original IP the company is putting its first-party weight behind is Rare's Sea of Thieves"

They have no real interest in investing in 1st party studios on Xbox, they never have, aside from Kinect at the time. As of right now, most of the developers they own are working on Hololens and the consumer version of Hololens has been delayed indefinitely. That says something.

https://en.m.wikipedia.org/...

gangsta_red3715d ago

I agree, they can just contract their IP's to 3rd parties without taking the financial risk themselves. Which is why QB, Recor, Ion, Scalebound and a few others are still being backed by MS.

I guess as long as the games are coming we shouldn't really worry about who is making them.

christocolus3715d ago

Agreed.That's definitely one way to go but i believe MS will have more to announce at E3. It seems they are doing some sort of restructuring and trimming down the fat. I'll miss pressplay though.

porkChop3715d ago

They do still take the financial risk, as they're the publishers of these games and fund the development. If the games fail, Microsoft loses a lot of money.

gangsta_red3715d ago

@porkchop

Definitely, but it's still less of a hit than paying for property, employee salary and benefits and any other type of expenses that comes along with employment.

Overload3715d ago (Edited 3715d ago )

Before anyone goes on a "you don't need 1st party" parade.

Phil Spencer said this.

http://www.polygon.com/2015...

There has been little to positive investment involving this, only cancellations and closures and like I said above most of their studios are working on Hololens, not Xbox.

DARKKENT3715d ago

Reading these comments Now fanboys are practically saying first party studios don't matter!!!

IN GAMING.. First party doesn't matter.. I am truly blown away... Fanboyism is a serious illness

Never thought I'd listen to Kylie minogue.. But time to go play 'im spinning around'

n4rc3715d ago

K.. I'll bite..

Explain to me how the owner of a studio matters to you, the gamer?

zeuanimals3715d ago (Edited 3715d ago )

@n4rc:

1st parties don't need to shop their game around hoping a publisher will pick them up like 3rd party studios do. They're set unless the studio closes.

It's entirely possible that a 3rd party studio that made an exclusive game won't get their next game funded by the 1st party publisher whereas 1st party studios are normally inclined to continue working. If the 1st party publisher owns the IP, the 3rd party studio has to drop that IP and make a new one. New IPs, even by prominent studios, don't always do well, even if they're practically the same game that put the studio on the map. Name recognition does a lot for a game.

DARKKENT3715d ago (Edited 3715d ago )

@zeuanimals

Don't take the bait.. If @n4rc doesn't understand the importance of first party studios leave him to argue with himself.

But just to top off what you said..@n4rc.. Gamers BUY GAMES.. Which fund further projects which in turn gives you confidence in a studio to innovate and put out further projects when ready just like naughty dog just like nintendo... So yeh as a gamer first party matters to me and many others... It's not rocket science

ShottyatLaw3714d ago

Pretty much . It greatly reduces liabilities and overhead. Cut a check for a product, or cut hundreds of checks for payroll, retirement, taxes, insurance, rent, HR, insurance claims, unemployment, law suits, etc. It's just business.

People have argued about MS's strategy regarding In-house vs. Contractual agreements for years. It's a slightly different approach then their competitors take, but different isn't necessarily better or worse.

I still think giving independent studios financial security through contracted exclusives, while allowing them to keep their autonomy, is a positive to MS's approach that gets overlooked.

Not to take away from Sony or Nintendo's more substantial in-house focus, though. I can't fault either approach.

In the end, both strategies mean more games keep getting made. I'm happy with that.

freshslicepizza3714d ago

the way i see it is less risk and less overhead for microsoft. instead of employing development teams they would rather use contractors. then if a game does succeed like gears of war did they can just buy that ip and maybe hire a studio to work on the franchise.

what it does highlight is microsoft is unwilling to invest within and take risks. it's a huge investment making aaa games so they can reduce that risk a bit by hiring studios like remedy instead of creating their own teams.

a lot of people are wondering if rare still has any talent left. or will they too go the way of lionhead studios? many of the original members of rare left long ago so we will see. sea of thieves so far looks very promising so we will have to wait and see.

i just don't like how it is really all treated as a business. look at music and how so much of it sounds the same. look at movies and how many sequels are out there. same thing with games, very few new ip's compared to the rest. which leads to stagnation and why everyone is excited to see how vr pans out or hololens. or even what nintendo has cooking up. there needs to be something that regenerates the industry because right now it's floating.

n4rc3714d ago (Edited 3714d ago )

Congrats to you both, neither one of you actually offered up anything that the consumer needs to worry about.. Shocker!

You seem to think I or anyone else needs to worry about a dev shopping their game to a publisher.. That's their business and problem.

If naughty dog was a 2nd party, you wouldn't of enjoyed the last of us or uncharted? Or maybe you think only Sony would put up money for those games? You're delusional

Patrick3714d ago

Whether or not you have first party studios really matters if your product is not competitive in sales compared to your competition. If your a third party developer and looking at which console to put your game on, your obviously going to be drawn to the console that has the highest sales, or your going to want a much larger check knowing you'll probably sale less games due to less consumers owning that console. With first party that doesn't matter. So the only reason Xbox gamers need to worry is if MS is being outsold like 2 to 1 or something like....oh wait. Never mind. First party studios matter when your making consoles. Period! Stop lying to yourself.
Unless they are going PC and dropping console, it matters.

n4rc3714d ago

So that's now 3 people that can't find a reason it matters to the gamer..

Stop worrying about their business decisions that don't affect you..

And BTW.. You made a case against 3rd party exclusive deals and NOTHING to do with first party benefitting you more then a 2nd party game

CartBlanche3714d ago

@n4rc it benefits gamers thusly...
1. 1st party matters because *good* exclusives shift console units. More console units means more players for you to play against at all hours and days of the year. Which means you can enjoy your console of choice *any* time you are free.

2. It matters to me that Sony owns a studio because I believe they truely understand gamers and gaming and the diversity and spectrum of games required. IPs like Journey or Uncharted, would have never been green lit by Microsoft, because it was too risky or not deemed as money making. Microsoft went with the tried and tested Tomb Raider over the years. Even though they are similar games, Sony's faith in its 1St party to "do its thing" means that Naughty Dog can execute 150% on their vision for that Franchise. Same with Last of Us. Just another zombie shooter, is what Microsoft would have seen and not the epic story behind it. That is why Xbox One's AAA title sheet is made up of dude Bro shooters and a racer, while Sony's portfolio is made up of a more diverse mix of titles.

3. If à studio is owned by the platform owner they should have access to the hardware long before 3Rd parties get their hands on it. This should mean that 1St party games are more performant and look better that those made by 3Rd parties because 1St parties have had more time to learn the tips and tricks of the hardware.
Last gen compare the quality of games from 3Rd parties to God of War, Uncharted or Last of Us. Which held their frame rate and looked better?? 1St party games did on both Xbox 360 or PS3 respectively were better than their 3Rd party counter parts.

So owners of studios matters massively!!!

343_Guilty_Spark3714d ago

How is it financially possible to contract something out and not take a financial risk? That makes no sense.

freshslicepizza3713d ago

@343_Guilty_Spark
"How is it financially possible to contract something out and not take a financial risk? That makes no sense."

there is always risks but when you hire well known developers that risk is a little less and it also means less overhead since you do not have to keep employing those people after the project is done.

+ Show (13) more repliesLast reply 3713d ago
3715d ago
gangsta_red3715d ago

He has focused on first party and exclusives games. What was the point of your link?

MS already has new 1st party games like Halo, Forza, Gears and Crackdown, plus new exclusives (PC) like scalebound, Recor, Ion and others. SO where is this decline in investment that you keep preaching coming from?

"...only cancellations and closures."

Really, interesting that you only focus on two studios through the last what 3 years and now all of a sudden you see no evidence of positive investment.

With the exception of Press Play, shouldn't you look at the fact that MS has gotten rid of studios that have not produced titles or sole purpose was Kinect focused games?

Or are you one of those concerned citizens that only cares that a game actually comes from a company owned studio for it to actually count?

3714d ago
jb2273714d ago

Just to play devil's advocate here, imagine the situation was flipped around, and Sony moved to solely third party development and scooped up every major talented third party dev that would typically be creating multiplat games...wouldn't that essentially leave gamers on the Xbox w/o any exclusives to play?

I personally like the idea of a first party studio because it is only additive to the medium of gaming...more studios simply means more games...partnering w/ third parties is a subtractive proposition, it only pulls potential games away from other platforms. I'd personally prefer it if third parties made games for all platforms & first parties worked on exclusive ip's that can showcase & highlight their consoles strengths.

Also, couldn't it potentially be a more costly proposition to get third party exclusive deals? MS would essentially be paying not only for the game in full, but also its full marketing costs, along w/ paying for the name of the studio. I'd assume getting a dev like Remedy on board becomes more costly w/ every game that releases to high sales & critical acclaim, which would potentially be a more costly endeavor than grabbing lesser known devs.

rainslacker3714d ago

@jb

The cost to contract out 3rd party deals is typically higher than making one in house(game budget wise), however, since companies don't have to worry about the running of the company, the long term costs of maintaining a studio and staff are lessened, so it tends to even out in the end.

There's also the fact that with contracted deals, the developer is expected to deliver with a set amount of funding, and if they can't do such a thing, they end up losing a lot of that profit, whereas in a 1st party studio, the parent company is still on the line for funding anything that is required(say for delays or whatnot). The only time these developers will get more funding is if the publisher decides that they should spend more, and if the developer can show they didn't misappropriate funds.

However, with a 3rd party deal, the chances they can't deliver are actually increased, since the publisher has no direct control over the management of the studio. This makes investment in contracted deals much more risky.

miyamoto3715d ago

Lol!
The purpose of having 1P studios is to show the power and capabilities of the console system by using propriety technology and tools.

Like Mario and Zelda games are to Nintendo, Sonic & Shenmue is to Sega , Uncharted & God of War is to PlayStation & Halo is to Xbox. But it's not just about technical prowess but also about great game design quality, innovation, and yes sales profitability.

1P studios and IPs are very very important to a console platform's success yet these clowns dismiss & despise that fact like morsels of bread falling down the ground. What a confusing bunch really.

1P studios and IPs are supposed to be the pillars of success. You break it down then a collapse is scale bound to happen.

maniacmayhem3715d ago

So tell me what games where you excited about from those 1P studios that closed?

Where they the ones that hadn't produced a game since 2012? You know the many Kinect studios MS had. Where you looking forward to Legends? Where you in the beta?

You are arguing non points and turning this into something it isn't.

Godmars2903715d ago

@maniacmayhem:

"So tell me what games where you excited about from those 1P studios that closed?"

Given that MS has never had a successful 1st party in-house IP, isn't that a trick question?

Maybe it could be said that Forza might qualify, but everything else was bought. With far too many examples of MS bringing in studios which had popular titles, doing little with them or have them put out something that isn't received well, then eventually shutting them down.

This is a problem especially considering how long MS have been in consoles.

AngelicIceDiamond3715d ago

@Overload we'll see at E3 Phil said hes still committed to new Ip and building franchises.

3714d ago
NotAFanboyyy3714d ago

"Before anyone goes on a "you don't need 1st party" parade.

Phil Spencer said this."

If you haven't noticed by now, Phil seems to say a lot of things and deflects a lot when giving unclear answers. I really wouldn't put much stock in that at all.

Magnes3714d ago

@n4rc K... I'll bite back the owning of first party studios shows me the gamer this company is serious about games which then prods me to plunk down $400-$500 of my hard earned money.

3714d ago
n4rc3714d ago

Talking 3rd party has its own downsides but that's a completely different game..

Take insomniac with so or remedy with qb.. How exactly are those games ANY different to you knowing ms doesn't own them?

And don't talk complete crap about ms not going for games like journey or uncharted, that's a complete load of crap.

Its also very naive to think sony gives free reign and total control to studios they own.. If ND doesn't want to do another tlou but Sony does, guess who gets their way? Employees of any company don't tell their bosses you'll take their money but do what you want, not what they want

+ Show (7) more repliesLast reply 3713d ago
SegaSaturn6693715d ago

Guys wait for Microsoft to announce the MSVita.

lastking953715d ago

At least we know it will get games ROFLMAO....get it? No? You know ms bringging xbox games to w10 devices and sony while doesn't support their peripherals. Kinda funny cause both get heat for it. Damned if you do damned if you don't.

BG115793715d ago

It doesn't matter wha bit is said. When first party studios close, it's a bad thing. First party studios are known for quality. To use a third party studio for a known licence is always a bad thing. The quality of a game when made by a third party is usually lessened.
Closing first party studios is a ba, specally when most games where delayed for next year, that there are few exclusive releases and that there are news that some exclusive games are no longer exclusive to the platform and are going to PC.
These are facts.

n4rc3715d ago

You apparently don't know what fact means.

Kiwi663715d ago

Did you know that the ps4 has exclusives that are also on pc yet they still do well

MRMagoo1233715d ago

If they are on pc they aren't exclusives making your stupid point void

Black0ut3715d ago

"Stupid point" huh Magoo? Nice personal attack there mate. When people resort to name calling their "point" is null and void.

ANYWAYS back on topic, it's still sad to see what's happening to Lionhead and I hope MS resettles them into other studios if it's closed indefinitely. If they're let go then I wish them best of luck.

Anyone trying to gain their agenda from this bad news needs to rethink themselves eh.

Kiwi663715d ago

#MRMagoo i know they aren't exclusives the point is that ps fanboys say they are when making their lists of ps only games

MRMagoo1233715d ago

@blackout

Hmmm name calling and personal attacks ....... maybe you need to reread my comment because none of that happened. Maybe reading isn't your best skill so it could just be that but it seems you got on your high horse faster than you can read a sentence efficiently.

3714d ago
Black0ut3714d ago

Magoo

You said his point was stupid...that's personally attacking, just like you're doing so again by saying my comprehension isn't up to scratch.

Trolling needs some work I think bud and so does your attitude towards others.

+ Show (3) more repliesLast reply 3714d ago
halfblackcanadian3715d ago

What if, heaven forbid, both studios weren't pulling their weight or meeting deadlines and milestones?

What if Fable Legends was in Beta so long because they weren't keeping players and the feedback was negative?

What if Project Knoxville exists because the "vote for our next project" only garnered a few thousand votes in the first place?

What if Lionhead WANTED to make a F2P and Kinect game?

tl;dr - Business decisions happen. Sucks for the studios and I sincerely hope that the employees land on their feet. There's as much reason to believe that MS had to make a decision they weren't psyched to make as there is that they are terrible at business and just wanted to can two competent development studios because reasons.

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70°

Microsoft Gaming Revenue Drops 7% Year-on-Year, Content and Services Down 5%, Xbox Hardware Down 33%

Microsoft announced its financial results for Q3 of fiscal year 2026, including an update on its gaming Xbox business and more.

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simulationdaily.com
Jin_Sakai11d ago (Edited 11d ago )

Not looking good. Hopefully Asha Sharma is able to turn Phil’s disaster around.

dveio11d ago

To me it's still quite remarkable how they can cash-in 5.3bn in revenue in a single quarter, since their hardware is basically dead.

Jingsing11d ago

The stock mark is what makes Microsoft remarkable, They have convinced every institutional and retail investor to just keep piling money into them. Like many big tech giants they are just a big growing pyramid scheme. As long as people keep dropping money into ETF's that cover the market Microsoft will always be liquid. At the same time it is completely stifling innovation and competition. People need to start being more discreet in how they invest their money as it's killing the system.

Tanktopmaster9211d ago

Once they re-evaluate exclusive all will be fine….

S2Killinit11d ago

Riiiiight because people will just flock back to them for one or two games per year.

Jingsing11d ago

15+ years of bad performance is what they call irreparable in business. It is time for them to sell off the assets and get out of entertainment.

Tanktopmaster9211d ago

These declines are on the back of extra revenue received from releasing games like Forza horizon 5 on PlayStation. So I’m being sarcastic here when I said they should go back to exclusives. Killing off a revenue stream from Ps5 sales will only make things worse

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50°

Spiders Studio, Developers of GreedFall: The Dying World, Announce Liquidation of the Company

Spiders: "We're going to cut straight to the chase so you're not left wondering: After a long period without clear answers, we have received confirmation that Spiders is being liquidated.

What does it mean? This means the company as a whole no longer exists. We'll cease our functions immediately. The planned DLC will release via Nacon, and then-- well, that's it.

We're sorry that it's come to this and would like to thank each and every one of you for your support over the years.

If you have any questions or run into issues with your games, please contact Nacon directly as we'll no longer be able to reply."

40°

Koei Tecmo Announces Record Financial Results After Releasing Many Big Games

Today, Koei Tecmo announced its financial results for the full fiscal year 2025, related to the period between April 2025 and March 2026.

Read Full Story >>
simulationdaily.com