This is just the beginning, and it won't just be from Microsoft, sadly. I am crushed by the Tango closure, as HiFi Rush was on of my games of the gen, but I am not totally surprised. As much as people talk budgets for games as a problem, the other bigger problem I think is time, which is connected. Arkane Austin's last big release was Prey, a game that didn't light the world on fire until it was too late, and Redfall, in development since before the purchase from MS, so what, five years? That is a long term bet, and when it failed, which it spectacularly did, it's a tough ask to wait another half decade to see if this studio can redeem itself. This just isn't sustainable. If MS knew Arkane Austin could get a new game out this gen, then maybe they would have had a shot, but that's not in the cards or even possible, apparently. Add that on top of them not producing a single hit in over a decade, and well... the writing was on the wall.
Tango is the one that hurts, but it's a similar situation. Hifi was amazing, Tokyo Ghost Wire, not so much apparently. And again, that game had a 5 year dev cycle, and had the misfortune (for Xbox) of being a PS5 exclusive for a year. It had its fans, and all, but it was not a bit hit. Neither of the Evil Within games struck gold either. Add on top of that the founder of the studio leaving, and it becomes clear. The shame of it was that Hifi was amazing, and sold well, at $29.99 but, not enough to keep making the same long term bets, apparently.
Unless studios can magically get to not needing half a decade to release a game, things are going to continue this way.
