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.
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In early December 2011, Microsoft Studios created Microsoft Casual Games, a division to revamp its past casual games for Windows using more up-to-date software delivery platforms.
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In 2013, Microsoft Studios established European studio Lift London, a studio that would create cloud-based games for tablets, mobiles and TVs Later, they created a new "Deep Tech" team inside its Developer and Platform Evangelism unit; the new team is charged with working with top developers outside the company to build next-generation applications on top of Microsoft Studios platforms.
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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.
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Microsoft Studios committed to keeping Minecraft available across multiple platforms, including rival PlayStation consoles.
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Matt Booty, the studio's corporate vice-president in 2020, said the acquisition of Mojang served as the template for later acquisitions, as Mojang was left to run as an "unplugged studio" with limited integration into the Microsoft Studios corporation, minimizing the disruption of Mojang's normal day-to-day business matters nor impeding on the studio's freedom.
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Microsoft Studios assigned Gears of War to Black Tusk Studios, which was later rebranded in 2015 as The Coalition.
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In July 2014, it was announced that Xbox Entertainment Microsoft Studios would be closed in the following months; the closure was completed by October 29.
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In 2016, Microsoft Studios was perceived as "unifying PC and Xbox One" platforms.
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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.
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At E3 2019, Xbox Game Microsoft Studios announced it had acquired Double Fine, and established a new internal studio dedicated to Age of Empires headed by Shannon Loftis, bringing their total studio count to fifteen.
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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 Studios to help dedicate resources towards it, such as they had with Minecraft.
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Xbox Game Microsoft 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 Microsoft Studios, and allowing for the titular characters from Rare's Banjo-Kazooie into Super Smash Bros.
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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.
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Booty said that with the large number of studios they had recently acquired, as well as ongoing external partnerships and their Xbox Game Pass service, the Microsoft Studios are able to support a "breadth of offerings in the portfolio" designed to attract a large number of players.
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