This aint exactly unusual for Microsoft. They aint as bad as EA, but... them closing up studios like that, yeah, it's not exactly abnormal behavior. I can think of certain studios they shut down LONG ago that, frankly, still sting even all these years later.
There's a couple of interesting things to look at in this case:
This bit isnt surprising to me, I already knew about the player count and retention bits with this... an average of 2300 players online in its first month (stats coming from SteamCharts) is not exactly great. It would be nice for an indie dev, a small team, but for a big team backed by bigger groups? Not at all.
And I know some might say "but that's on Steam, that's not Xbox", but believe me, Steam is REALLY important here (as it is for any publisher/developer whose games arent completely exclusive to just a console)
Ghostwire did better, but not like "breakout hit" sort of good. And neither of these games are continuously monetizable. So that's another hit.
Also look at this:
Click on the image there (within that reddit post) to read the rest of that.
All the points about Gamepass are important here, too. People think that when something is popular on Gamepass (which Hi-Fi was), it must be doing good, but that aint the case, as Gamepass success doesnt = game SALES. Instead it can be a bit of a problem for publishers whose games end up in there, for various reasons. It's not ALWAYS a bad thing, mind you, it absolutely has its uses from a business standpoint, but it can be problematic. Heck, Hi-Fi doing really well on Gamepass even hurts its sales on Steam, despite that Steam isnt Xbox. Because it means that players who have Gamepass already, or those who signed up for it specifically because Hi-Fi pushed them to do it, arent actually buying copies to keep. And with that game being primarily a traditional structure game, once they've played through and beaten it, there's no reason to buy a copy to keep, as that's the end of it.
The internet may have thought that Hi-Fi was this perfect little golden egg that should have fueled this studio for years, but if they dont bloody well BUY the thing, it doesnt matter.
There's other elements to consider, including a failed mobile game from Tango that shut down in only 5 months (ouch).
I could go on and on about this (I pay way too much attention to this stupid industry, PARTICULARLY to nasty corpo behavior) but yeah, that's some of the basics.
Chances are, this is all going to be further analyzed (and argued about) over the next few weeks, so if you're interested, just keep an eye out.
One way or another though, as sad as it is this isnt exactly rare behavior for this industry. My favorite example is still Activision. "hey guys, we made RECORD PROFITS this year! Wow! 800 of you are now laid off! Wow!"
