E3 2018 – Microsoft to double size of first-party development with acquisitions, new studio

Phil Spencer, Head of Xbox, announces original Xbox Backward Compatibility at the Xbox E3 2017 Briefing on Sunday, June 11, 2017 in Los Angeles. (Photo by Matt Sayles/Invision for Microsoft/AP Images)

Microsoft is to double the size of its first-party development ecosystem, by acquiring four studios and creating an entirely new studio.

At its press conference at the 2018 E3 Show, Microsoft revealed that it has bought Forza Horizon developer Playground Games and has letters of intent to acquire Ninja Theory, Undead Labs and Compulsion Games. It will also establish a new developer called The Initiative, based in Santa Monica.

Perhaps the most striking announcement is Microsoft’s move to buy Ninja Theory. The veteran Cambridge-based developer once had an exclusive publishing deal with Sony, culminating in the 2007 PlayStation 3-exclusive Heavenly Sword. And Hellblade: Senua’s Sacrifice, its most recent success, was a PlayStation 4 timed console exclusive, although it eventually came out on Xbox One earlier this year.

However, Microsoft has had a relationship with Ninja Theory more or less since the studio’s inception: Microsoft published the debut game from Ninja Theory’s first incarnation, Just Add Monsters, entitled Kung Fu Chaos. Microsoft also announced that it is in the process of acquiring another British developer, Leamington Spa-based Playground Games, which is best known for developing the Forza Horizon series and working on many core Forza Motorsport games.

Plus, the Seattle platform holder will acquire Undead Labs, the developer behind State of Decay 2, and Compulsion Games from Montreal, which is preparing to release We Happy Few on August 10. And it will set up a new developer called The Initiative, based in Santa Monica, headed by industry veteran Darrell Gallagher, an ex-studio head of Tomb Raider developer Crystal Dynamics. Microsoft said that The Initiative: “Is working to create groundbreaking new worlds, characters and game experiences.”

Matt Booty, corporate vice president of Microsoft Studios, said: “The original games we create at Microsoft Studios are some of our biggest assets. Our growth strategy is to continue to expand the worlds that players love, while developing all-new exclusive games that deepen their engagement with our platform. We are thrilled to welcome five new studios into the Microsoft family. We believe these teams have the collective creative power and operational excellence to deliver the next industry game changers.”

In recent years, Microsoft has suffered from the perception that it has lagged behind Sony as far as having a vibrant first-party development organisation delivering exclusive games for its console is concerned. The Seattle giant clearly hopes that this developer acquisition spree will redress that balance. As soon as any news emerges regarding what its new studios are working on, we’ll bring it to you right here.

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