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Is Microsoft's Future in Motion?

March 25, 2010

Is Microsoft's Future in Motion?
By Stefanie Fogel

Expanding its first-party portfolio, Microsoft is gearing up for big changes

2009 was a bittersweet year for the video game industry. Thought by many to be recession-proof, especially after a record-breaking 2008 holiday season, it recorded its best month ever in December and racked up $5.53 billion in sales. Historically, escapist forms of entertainment have done well in tougher economic times, as people seek ways to forget about their troubles. However, overall sales for the year fell eight percent. Thousands of people were laid off as companies such as EA, Sega and THQ looked for ways to cut back, and many game studios - like Swedish company GRIN - closed their doors for good.

Even corporate giant Microsoft was staggered by the economic sucker punch. In January 2009, the company announced it was cutting 5,000 jobs over 18 months throughout a variety of departments, including R&D, marketing, finance, HR, legal, sales, and IT. It shuttered two of its studios: ACES Game Studio (Microsoft Flight Simulator) and Ensemble Studios (Halo Wars, Age of Empires series) as its shares fell to an 11-year low.

However, although the giant might be down, it's certainly not out. Microsoft-owned Rare announced last month that it will open a new facility in April inside Fazeley Studios that will be home to about 90 staff members. Located in Digbeth, Birmingham, the new studio will be a production, test and usability site that Rare hopes will help change the current model of games development working practices.

Instead of the old boom-and-bust model, the developer wants to adopt a film production model, believing it to be a far better and more efficient way of creating AAA titles. "The old way of making games just doesn’t work anymore," says studio head Mark Betteridge. "We need to be much more flexible in how we staff a team and setting up the new facility in Digbeth will help us to do this."

Lucan Gray, Fazeley Studios founder, adds, "I am delighted that Rare has chosen Fazeley Studios for its second base. The fact that a Microsoft Games Studio is coming to Digbeth shows how things have moved on in the area in the last couple of years, in spite of the challenging economic background."

Rare isn't the only Microsoft developer showing signs of life, and the reason behind much of the recent activity among the company's game studios can be summed up in two words: Project Natal.

Lionhead Studios boss Peter Molyneux has been championing the motion-control technology for the last year, saying that it has the potential to be as revolutionary as the PC mouse.

"The mouse was the real revolution of the PC — not the Intel processor," Molyneux said in an interview with Gamereactor International, "and who's to say Natal couldn't end up creating something you and I can't even imagine now. It forces us to approach technology in a completely different way. Before the mouse, we only had the keyboard."

Lionhead has experimented with Natal support for Fable III and is hard at work on Milo and Kate, as well as a third, currently unannounced game,  and it isn't the only Microsoft studio working on Natal projects.

Forza Motorsport developer Turn 10 is also interested in adding Natal support to its future games, leading many to speculate on whether or not the studio has a motion-controlled racing game in the works. The mysterious SpawnPoint Studios is also hiring for a Project Natal launch title, while 343 Industries is hiring a number of positions to help create "a new experience in the Halo universe." Although Bungie has flatly denied the rumor that Natal will be integrated into their upcoming Halo: Reach title, saying it will be done only when it "makes sense," the idea that it could wind up in a future Halo game isn't so far-fetched.

With Sony's recent announcement of the Playstation Move, the motion-control arms race is on. The buzz surrounding this new technology is good, and with Microsoft promising to bring the full lineup of Natal titles to E3, we'll soon get a chance to see just how much of a game changer it really is. With games such as Rock Band and Wii Fit generating half the revenue they did last year, according to NPD, can motion-control technology revive interest in casual gaming, and sales along with it? We'll find out this holiday season.

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