As Microsoft Games and Microsoft Game Studios (2000–2011) Early in the
history of Microsoft the software company published video games like
Olympic Decathlon, but
Steve Ballmer reportedly persuaded
Bill Gates to deemphasize them to professionalize the company's image. By the early 1990s,
Microsoft published
subLOGIC's
Microsoft Flight Simulator and several
Microsoft Entertainment Pack compilations of
minigames, but was best known for
MS-DOS and
Microsoft Windows. In 1992, the company began increasing its focus on games. It announced
Microsoft Golf for Windows, based on
Access Software's
Links, and expanded the games division from two to six people with the intention of commissioning more products from other developers. Microsoft acquired
FASA Interactive in 1999 for its
MechWarrior game series, Access Software, and
Aces Game Studio, which worked on
Flight Simulator. The Games Group had also established long-term publishing deals with developers like
Ensemble Studios (
Age of Empires,
Age of Mythology), and
Digital Anvil (
Starlancer). Under Microsoft, FASA Interactive was renamed FASA Studio, and Access Software became Salt Lake Games Studio. Microsoft transitioned the Games Group into a wholly separate division named Microsoft Games around March 2000, along with other consolidation of games-related projects within Microsoft. This came alongside the public announcement of the first
Xbox console, with Microsoft Games to serve as a developer and publisher of titles for both Xbox and Windows.
Robbie Bach, who held executive positions in Microsoft's entertainment divisions, was named senior vice-president while
Ed Fries, a member of the former Games Group and instrumental for some of its acquisitions, was named as vice-president of the new division. Shane Kim served as the division's general manager. In 2001, the division was renamed Microsoft Game Studios (MGS). FASA Studio and Salt Lake Games Studio remained with Microsoft Game Studios. With the acquisition,
Halo, which had been planned for release on personal computers, became a Microsoft-published title as well as a launch title for the Xbox on its release in 2001.
Turn 10 Studios was established in 2001 for work on the
Forza series of racing games. In September 2002, Microsoft Game Studios acquired
Rare, who had previously extensively developed for
Nintendo platforms. In 2003, Microsoft recognized that the
EA Sports label was in a far stronger position to develop sports games for the Xbox console, and among realignment steps, laid off about 78 employees within Microsoft Game Studios that were developing sports games in-house, and sold Salt Lake Games Studio, now named Indie Games to
Take-Two Interactive in 2004, where it became Indie Built.
Peter Moore was named in 2003 as vice-president of Microsoft's Home and Entertainment Division, which included MGS, the Xbox division, and Microsoft's home hardware market, reporting to Bach. In addition to pulling big publishers like
Electronic Arts to the Xbox platform, Moore tried to push the Xbox in Japan by courting Japanese developers with support from MGS publishing. Such games included
Phantom Dust and
Blinx: The Time Sweeper. Around 2004, MGS established
Carbonated Games as an internal studio for the development of
casual games for Microsoft's web games portal
MSN Games, on the chat client
MSN Messenger, and on the
Xbox Live platform. Kim and Fries were instrumental for securing MGS' publishing deal with
Lionhead Studios for its 2004 game
Fable, which would serve as the first major role-playing game on the Xbox platform. Subsequently, in 2006, MGS acquired Lionhead Studios along with the
Fable properties, as it sought to secure a
Fable sequel for the upcoming
Xbox 360. MGS folded the staff of Digital Anvil into the larger studio in 2005, following the release of 2003's
Brute Force, and closed down the studio entirely in 2006. Moore opted to leave Microsoft in July 2007, so to move back to the San Francisco Bay area with his family and to rejoin Electronic Arts.
Don Mattrick was named as his replacement as the new vice-president of the Xbox and Games Business, which included MGS. Later in 2007, Bungie amicably split from MGS to become a privately held independent company, with MGS retaining the rights to the
Halo property. Bungie continued to develop two additional
Halo games for MGS,
Halo 3: ODST (2009) and
Halo: Reach (2010). Simultaneously, MGS founded
343 Industries as an internal studio to develop future
Halo games without Bungie. In 2008, MGS disbanded Carbonated Games and announced the formation of internal studio
Xbox Live Productions to develop "high-quality digital content" for
Xbox Live Arcade. Microsoft as a whole announced layoffs of up to 5,000 jobs across all divisions in January 2009 due to slowing sales of personal computers as a result of the
Great Recession. Within MGS, the studio had already planned to disband Ensemble Studios after the completion of
Halo Wars in early 2009, while the new layoffs led MGS to also disband Aces Game Studio. Later in 2009, Phil Spencer was promoted to corporate vice-president of MGS, in order to replace the retiring Shane Kim. In 2010, MGS formed a mobile gaming studio,
MGS Mobile Gaming, focused on developing gaming and entertainment multimedia for
Windows Phone devices. It also expanded Rare with a second studio in Digbeth, Birmingham.
As Microsoft Studios (2011–2019) '' is an
Xbox Live Arcade game that was developed by a third-party studio and published by Microsoft Studios in 2012. By the
Electronic Entertainment Expo 2011 in June 2011, Microsoft Game Studios was quietly renamed to Microsoft Studios. Later in 2011, Microsoft Studios acquired
Twisted Pixel Games. In early December 2011, Microsoft Studios created
Microsoft Casual Games, a division to revamp its past casual games for Windows (like
Windows Solitaire and
MSN Games) using more up-to-date software delivery platforms. In 2012,
Phil Harrison, the former Sony worldwide studios head, joined Microsoft as head of Microsoft Studios Europe and IEB. Microsoft Studios acquired developer
Press Play, known for developing
Tentacles and
Max & the Magic Marker. They also announced a new development studio in London, England. Later in 2012, Microsoft downsized Microsoft Game Studios Vancouver due to the cancellation of the Kinect family title
Project Columbia and announced that the ongoing development of free-to-play title
Microsoft Flight had been ceased due to
portfolio evaluation. The reduced Vancouver studios were renamed to
Black Tusk Studios and tasked with making similar franchise-building title as
Halo. In 2013, Microsoft established European studio
Lift London, a studio that would create cloud-based games for tablets, mobiles and TVs. Later, it created a new "Deep Tech" team inside its Developer and Platform Evangelism (DPE) unit; the new team is charged with working with top developers outside the company to build next-generation applications on top of Microsoft platforms. While Mattrick had overseen much of the development of Microsoft's next console, the
Xbox One, he left in July 2013, prior to its release, to take over as CEO of
Zynga. Mattrick was succeeded by
Julie Larson-Green, who was named the president of the Devices and Studios Engineering Group, following a realignment of Microsoft's divisions, overseeing both the Xbox hardware divisions and Microsoft Studios.
Shifting priorities under Microsoft CEO Satya Nadella Satya Nadella became CEO of Microsoft in February 2014. At this time, Microsoft was facing strong competition in the consumer market, and within the gaming sector, the Xbox One (released in 2013) was more expensive than competitors and had too much focus on non-gaming functions. Under Nadella's direction, Phil Spencer was named the new head of Microsoft Studios to replace Jason Holtman, who had only been its lead for the prior six months. Spencer began looking for ways to expand Microsoft Studios to make it a profitable division for Microsoft, and began negotiations for the acquititions of
Mojang, the developers behind
Minecraft, in late 2014. Microsoft spent to acquire the studio, and upon the deal's completion in November, the studio's key founding personnel,
Markus Persson, Jakob Porsér and Carl Manneh, departed Mojang. Microsoft Studios committed to keeping
Minecraft available across multiple platforms, including rival PlayStation consoles. Additional
intellectual property (IP) acquisitions by Microsoft Studios in 2014 included a publishing contract with
Undead Labs for its game
State of Decay, the rights to the
Gears of War series from
Epic Games, and the
Rise of IP (
Rise of Nations and
Rise of Nations: Rise of Legends) from
Big Huge Games. Microsoft Studios assigned
Gears of War to Black Tusk Studios, which was later rebranded in 2015 as The Coalition. In July 2014, it was announced that
Xbox Entertainment Studios would be closed in the following months; the closure was completed by October 29. On March 4, 2015, Microsoft announced that it was merging UK-based studios, Lift London and Soho Productions for further games development, with the amalgam continuing to operate under the Lift London name. On March 7, Microsoft announced at the
Game Developers Conference that
HoloLens games were coming to Xbox One. Twisted Pixel and Microsoft Studios agreed to split in September 2015. Kudo Tsunoda left the Xbox division in November 2015 for the development of HoloLens and
Microsoft Edge, and other projects that could improve means of human interaction, including voice and gesture. Tsunoda's role was filled by Hanno Lemke and Shannon Loftis. In 2016, Microsoft was perceived as "unifying PC and Xbox One" platforms. In March 2016, Microsoft canceled development of two major projects: Lionhead's
Fable Legends and Press Play's
Project Knoxville, shuttering both studios in the following months. Around the same time, changes to Microsoft Studios' website indicated that further studios—BigPark,
Good Science Studio, Leap Experience Pioneers (LXP), Function Studios and State of the Art (SOTA)—had been closed, Microsoft Studios clarified that all of them had been consolidated into other Microsoft Studios teams over the past several years. In September 2017, Spencer was promoted to the senior leadership team, gaining the title of "executive vice-president of gaming". At this point, Microsoft Studios directly reported to Nadella. On June 10, 2018, during the
Electronic Entertainment Expo 2018, Microsoft announced the acquisitions of
Ninja Theory,
Playground Games,
Undead Labs and
Compulsion Games, as well as the opening of a new studio in
Santa Monica, California, entitled
The Initiative, which would be led by the former
Crystal Dynamics studio head Darrell Gallagher. In November, Microsoft Studios announced further acquisitions with
Obsidian Entertainment and
inXile Entertainment.
Rebranding as Xbox Game Studios (2019–2021) The studio rebranded itself on February 5, 2019, as Xbox Game Studios, as to reflect Microsoft's intent to use the Xbox brand to support gaming across all the devices it supports. At
E3 2019, Xbox Game Studios announced it had acquired
Double Fine, and established a new internal studio dedicated to
Age of Empires headed by Shannon Loftis, bringing its total studio count to fifteen. This studio, later named World's Edge, does not directly develop any games, but oversees efforts from external studios, such as
Relic Entertainment,
Forgotten Empires and
Tantalus Media, to assure the series is being developed in the right direction, according to creative director Adam Isgreen. Booty has stated that with studios like Obsidian, Ninja Theory, and Double Fine, which have traditionally supported multiplatform games, it will determine if it makes sense for its future products to be treated as Microsoft-exclusive content for Xbox and Windows computers, or to allow these to be published across multiple platforms. That decision will be based on a "network effect", whether having these games on other platforms will better support the franchise and thus worthwhile for Microsoft to help dedicate resources towards it, such as it had with
Minecraft. Xbox Game Studios has allowed some of the content developed by its studios or that was previously published exclusively for the Xbox and Windows systems to be released on
Nintendo systems, notably the
Nintendo Switch versions of
Cuphead from Studio MDHR and
Ori and the Blind Forest from Moon Studios, and allowing for the
titular characters from Rare's
Banjo-Kazooie into
Super Smash Bros. Ultimate. However, the division stated that these releases were generally "existing commitments to other platforms" that it allowed studios to honor, but it otherwise has "no plans to further expand our exclusive first party games to other consoles." Near the end of 2019, with the combined fifteen studios now under Xbox Game Studios, Booty stated that it now had more games than ever to handle, and were likely not going to acquire any additional studios in the near future, stating "we've been shifting our focus inside Xbox Game Studios from acquisition and growth, to a phase of execution and delivery". Additionally, as Microsoft started promotion of its fourth-generation of Xbox, including the
Xbox Series X, Booty stated that titles developed by Xbox Game Studios in year or two following its release will not be exclusively for the new generation of consoles, but instead will support both Xbox One and the new console, with some games receiving enhanced performance when played on the new console lineup. Booty said that with the large number of studios it had recently acquired, as well as ongoing external partnerships and its
Xbox Game Pass service, the Studios are able to support a "breadth of offerings in the portfolio" designed to attract a large number of players. Further, in an interview in November 2020, Phil Spencer said during an interview regarding the future of the Xbox brand that he intends to put more focus on outputting
RPGs, which had to that point been underserved. Microsoft and
ZeniMax Media announced on September 21, 2020, that Microsoft planned to acquire ZeniMax and its family of studios, which include
Bethesda Game Studios,
Arkane Studios,
id Software,
MachineGames,
Tango Gameworks, and
ZeniMax Online Studios, for over in cash. According to Spencer, the ZeniMax acquisition was intended to give Microsoft a large library of games known around the world, and to expand the library of Xbox Game Pass and
XCloud. However, during 2023 hearings regarding the
Federal Trade Commission's concern over the
proposed acquisition of Activision Blizzard by Microsoft, Spencer said that
Sony Interactive Entertainment had made sways at Bethesda to keep
Starfield as a PlayStation-exclusive, further prompting Microsoft to purchase Zenimax. Both U.S. and European Union regulatory agencies approved the acquisition by early March 2021, and the acquisition was formally completed by March 9, 2021. The total price of the deal was $8.1 billion Bethesda Softworks, the primarily publisher for all of ZeniMax's games, remained as an operational unit under Microsoft with the acquisition and retained all its current leadership. With the acquisition, future games from the studios will be exclusive to Xbox consoles, but existing commitments to other platforms (such as Arkane Studios'
Deathloop and Tango Gameworks'
Ghostwire: Tokyo, which are contractually exclusive to
PlayStation 5 for a period of 12 months before their release on
Xbox Series X and
Xbox Series S) will still be honored. Spencer stated that Game Pass was also fundamental driver for the acquisition. A preliminary injunction to block the acquisition had been sought in an ongoing class-action lawsuit that ZeniMax faced over
Fallout 4, with the plaintiffs in the case arguing that Microsoft could shield ZeniMax's assets from damages should it be found liable after the acquisition. The ZeniMax Board of Directors was dissolved following the Microsoft purchase.
Acquisition of Activision Blizzard and multiplatform initiatives (2022–present) On January 18, 2022, Microsoft announced its intent to acquire
Activision Blizzard in an all-cash deal valued at $68.7 billion. Microsoft stated that this acquisition would make it the third-largest gaming company by revenue, following
Tencent and
Sony. With the announcement, Microsoft also announced a major change to its corporate structure, with Phil Spencer becoming CEO of the new division
Microsoft Gaming, with Matt Booty leading Xbox Game Studios under it. Once approved, Activision Blizzard would then become a subdivision of Microsoft Gaming. The deal was cleared by various national regulators by October 13, 2023, with Microsoft closing the deal the same day. During litigation on the merger with the United States
Federal Trade Commission, internal documents from Microsoft show strong interest in re-acquiring Bungie, or acquiring
Sega's game development companies,
Supergiant Games,
Niantic, Inc.,
Thunderful Group,
Zynga,
IO Interactive,
Scopely, or
Playrix as part of Xbox Game Studios, as well as publisher
Square Enix to help bolster its Asian presence and mobile market share. In January 2023, Microsoft laid off 10,000 employees, which represented about 5% of its global workforce. Included in those layoffs were many employees from 343 Industries, The Coalition, and Bethesda Game Studios. On October 26, 2023, Microsoft announced the promotion of several employees in the company, including
Sarah Bond being promoted to president of Xbox, overseeing all Xbox platform, business, and hardware work, and Matt Booty promoted from president of Xbox to president of Game Content and Studios, including the new responsibility of overseeing ZeniMax and Bethesda, with Jamie Leder still running Zenimax as a limited integration entity, but now reporting to Matt. In the wake of Matt Booty's promotion, Alan Hartman, then the head of
Turn 10, was subsequently promoted to head of Xbox Game Studios. On October 6, 2024, 343 Industries officially announced its rebranding as Halo Studios, additionally confirming that multiple
Halo games were in development and that said projects would now use
Unreal Engine 5 as opposed to the proprietary Slipspace Engine that powered
Halo Infinite. On October 14, Rare creative lead Craig Duncan was announced to be succeeding Alan Hartman as head of Xbox Game Studios beginning in November 2024, with Hartman retiring after a three-decade tenure at Microsoft. In July 2025, Microsoft Gaming performed a business restructuring ahead of the new financial year, which resulted in layoffs at Xbox Game Studios
Rare,
Compulsion Games,
Undead Labs and
Turn 10 Studios. The latter, who conceived and developed the
Forza Motorsport series, was reported to have lost almost half of its workforce and was anticipated to be restructured as a support studio for
Motorsports sister series
Forza Horizon and developments for the
ForzaTech engine, according to former content coordinator Fred Russell. In addition, Rare's action-adventure game
Everwild ceased production, while Microsoft also canceled the
Perfect Dark reboot and closed its developer
The Initiative simultaneously. Alongside
Everwilds cancelation, Rare veteran and designer
Gregg Mayles also departed the company after 35 years, alongside producer Louise O'Connor. Over 2024 and 2025, a series of video games published by Microsoft Gaming divisions, most notably Xbox Game Studios' titles, were released on
PlayStation and Nintendo consoles under an initiative to pivot focus from the Xbox series of consoles and eventually cease to produce exclusive titles for the consoles like Sega. Xbox Game Studios had also released
Nintendo Entertainment System,
Super Nintendo Entertainment System and
Nintendo 64 video games on the
Nintendo Switch Online service in 2024, all of whom were developed by Rare and in some cases, formerly published by Nintendo. == Studios ==