Changes in corporate direction (biggest threat) or poor performance (which would be measured by low user engagement on the service) could put any of these studios at risk. Then again these studios obviously measured these risks against the risks of staying independent and decided to be bought so.

If Microsoft sees these studios as contributing to the whole platform/ecosystems vs. on their own (similar to Sony's model of first party software development) then these studios are much safer. Creating software for a service like this has the benefit of averaging winners and losers for the platform holder and also has the added benefit of turning that into a steady revenue stream.

I am still curious about how gamepass numbers might work out. Imagining a few years in Microsoft is hoping for something like this-

Revenue of $10 game pass per mo x12 months= $120 a year x5 mil subscribers= 600 million a year x5 years= 3 billion + microtransactions and expansions

Cost of developing 30 games (6 a year for 5 years) at 20 mill each (A-AA size stuff)= 600 million over 5 years= 125 million a year
Of course this is grossly oversimplified and the costs we don't know (the most important figures) are how much they pay publishers to make it worth their while. I think it's easy to see how they can fund their own games this way, but not sure how they can afford to attract new content from publishers. Will be interesting to see how it plays out..

Right, people seem to think shutting down studios is something MS (and Sony) has done for fun or something.

In reality, most studios get shut down after not achieving success or what was desired with multiple projects. Sometimes the company is going a different direction and doesn't feel a certain studio is necessary anymore, the reasons vary.

I think all the studios MS purchased have a solid history of releasing games with mixed success. Its also possible they all had interesting new projects MS wants. Any who, buying a team that's actively creating games seems less risky than building a new studio entirely.

But I can't help but be curious why is MS suddenly buying studios as opposed to working with 3rd parties? Either way I look forward to seeing what these studios do with MS money.

First I think they won't shut down a studio unless the studio massively under performs.

Secondly, I think MS has taken a huge risk with both Compulsion and Ninja Theory and therefor, these two are most likely to be shut down. This won't happen any time soon, it might be 3-10 years from now depending on what projects they have pitched along with the budget, as this will determine what money they will have to make.

With compulsion, I think the risk is smaller as I cannot see them inflating the budget more than what they need to make a game, therefore hopefully it will be easier to hit breakeven.

Ninja Theory on the other hand is a different beast. These guys love creating games with grand vision and design. They love hiring actors and Hollywood like talent. This is a studio that wants to be on the same level as ND, SSM, Kojima Productions, Bungie etc. This is a studio who tried several times to make a big successful game, but has always fallen short on sales. As much praise they get from the media and their fans, they always seem to miss out on the sales. Hellblade being the exception with its low budget obviously.

My fear is that neither of these two studios will live up to their expectations. Compulsion might not be able to make a game as good as Bioshock and live in its Shadow and Ninja Theory will pitch a big game that will have a big budget, big talent and when it comes to sales, will fall flat.

Why everybody is talking about Xbox only... You do realize MS is the leading install base company when you factor in PC gamers which for the most part run
There is no reason to. Lose any studio any time soon.

If any did get shut down, it'll be maybe a decade from now after they've released 2/3 games. I'm pretty sure MS didn't buy all these studios for them to be AAA either so maybe none of them. If I had to pick one I'd say Compulsion.

Undeadlabs and compulsion

If I had to guess I'd say Compulsion, followed by Undead Labs later on. I'm still not even sure what Microsoft was thinking buying Compulsion. Neither of their two games were good. Compared to acquisitions like Playground, Obsidian, and Ninja Theory them buying Compulsion really had me scratching my head. The only thing I can think of is that they threw out offers to a bunch of different studios trying to snag whoever they could at the time and Compulsion agreed. That or Compulsion heard they were in the market for new studios and approached them. Because I'm really having a hard time imagining anyone looking at their portfolio and thinking they'd be worth spending the money on if they weren't just trying to grab whoever they could. Maybe they have something up their sleeve that Microsoft thought would be great and perhaps they'll shock me but I really can't help but feel it was a purchase for the sake of having more studios.

Undead Labs isn't nearly as bad as Compulsion and considering their relationship with Microsoft it made a lot more sense. That being said, I don't find them to be a studio worthy of any real praise. Their first effort was good enough but their second game clearly didn't hit the mark. Now that's not to say they won't do better. After all, Sony bought Guerrilla Games after their first two games, Shellshock and Killzone. The first being really bad and the second being mediocre. They went on to make two great sequels and now are being lumped into Sony's top tier talent after Horizon. So it's very possible that a more structured environment with even more support and resource sharing could do for Undead Labs what it did for Guerrilla Games. I'm just wary of their history,

I suspect MS made all these purchases with projects we don't know about being worked on already.

I suspect Compulsion had another project in development while they completed We Happy Few. If MS wanted them maybe it was an action game? Who knows.

Not sure what the plan with Undead Labs is, but State of Decay is a surprisingly popular IP. So maybe the next game in the series is going to be far more ambitious and it seems like they have a pretty good grasp of UE4 compared to some other games using the same engine.

Anyhoo, I think this gen MS learned a lesson by trying to rely on 3rd parties that aren't particularly loyal to them. Also, MS should be more willing to pour money into them as well.

I don't trust Microsoft with anything anymore after shuttering Ensemble Studios and Lionhead.