Xbox Game Studios chief, Matt Booty, emphasized Microsoft's need to concentrate on crafting smaller, award-worthy games, just one day after the closure of Tango Gameworks studio was announced.

Following an announcement on May 7 regarding Microsoft's decision to disband four Bethesda Softworks subsidiaries, which included Tango Gameworks and Arkane Austin, an assembly was conducted. In this town hall meeting addressed by Booty and ZeniMax studios' leader Jill Braff, discussions unfolded about the strategic direction for ZeniMax.

During this meeting on May 8, as per information obtained by The Verge, Booty expressed to the workforce the strategic shift towards developing more compact games that could bring the company prestige and recognition. This directive seemed unexpected to various insiders, especially because of the recent closure of Tango Gameworks, creators of the highly-lauded rhythm-action game Hi-Fi Rush.

In his address, Booty recognized the merits of Hi-Fi Rush, yet did not elaborate on the rationale behind the closure of its developer studio.

Aaron Greenberg, Vice President of Xbox games marketing, previously extolled Hi-Fi Rush on X (the platform previously known as Twitter), hailing it as a significant success by all metrics and exceeding expectations, lauding the Tango Gameworks team for the game's surprise release and its reception.

During the town hall, reports emerged of Tango Gameworks having proposed a sequel to Hi-Fi Rush prior to its shutdown. Arkane Austin was also reported to be keen on revisiting its foundational style, having been in the stages of proposing a new single-player project, possibly another installment in the Dishonored series.

Booty subsequently pondered over the broad extent of Microsoft's studio activities, likening it to peanut butter spread too thin, suggesting that the shutdown of Tango and Arkane Austin was a tactical decision to redistribute resources across the company's portfolio.