Xbox Entertainment Studios Post-Mortem – History Repeats Itself; Newfronts Foreshadow Imminent Fold

/ Jul 18, 2014


Microsoft’s Xbox announces it will invest in producing original content. The company locks meaningful deals with content creators who pack the proven track record, the TV and studio clout to bring the brands, and the skill to make “original programming” meant for digital distribution matter.

PAUSE. Did you think I was talking about Xbox Entertainment Studios? Wrong.

REWIND. I’m actually referring to the Xbox Independent Video Channel, the deal with Felicia Day to syndicate season one of “The Guild” and fund season two, and the content produced by horror film bigwigs like James Wan (the “Saw” franchise), James Gunn (“Slither”), and David Slade (then “Hard Candy” and “30 Days of Night,” now “Twilight’s Saga Eclipse”).

I had the pleasure to work with the then-head of the initiative, Scott Nocas, in launching the program. It was the “early days,” pre-financial crisis, when the pulse of the online video space was much like now — studios, talent agencies, brands were pocket-heavy and digital video hungry.

“We saw great success with Felicia and ‘The Guild’ but Microsoft at the time was not ready to invest in original content. They saw financial benefit but wanted to be able to do that at scale and wanted to be able to build interactive programming,” Nocas told me over the phone as we reminisced.

But that wasn’t all so easy, even back then — “Microsoft has always been a technology-first company and always had a complicated relationship with Hollywood and entertainment.”


Xbox 360 announces a new “a new LA-based studio called Xbox Entertainment Studios, where the mission is to create true interactive content for Xbox and other devices that will change the way entertainment content is experienced and delivered” — with Nancy Tellem at the helm, in Feb. 2013.

Then the president of Microsoft’s Interactive Entertainment unit, Don Mattrick departs in summer 2013, followed by CEO Steve Ballmer in the fall. And so starts the inevitable demise of Xbox Entertainment Studios under the new leadership.

According to sources who worked closely with XES over the course of the past year, while the content strategy was being developed and deals were locked down, it quickly became a nightmare to work with them — not because the team was poor but because of constant changes in the strategy.

Changes that would become symptomatic of a larger internal disconnect at Microsoft. Like the younger sibling the big brother doesn’t want to hang out with, Xbox Entertainment Studios had to be reactionary, constantly shifting objectives from devices and services to mobile to the cloud — all XES’s big(money) brothers. Regardless, the video content business wasn’t ever a part of Microsoft’s core strategy under the new leadership.

And from the industry murmurs following the Newfronts, attendees of that presentation could already feel the inconsistency and lack of focus on video. While XES frontmen Nancy Tellem and Jordan Levin did showcase the full slate to media in advance of the 2014 Newfronts, brands and Newfronts attendees were given a watered down “here’s everything Microsoft has to offer” presentation that left many feeling that the content strategy was frivolous.

Another source familiar with the company reiterated Nocas’ point about Microsoft’s internal disconnect between the tech space and Hollywood.

And when you have 20 million paid subscribers tuning in primarily for gaming and access to Netflix, Hulu, and other OTT offerings, why should original content take precedent? Xbox, after all, is a platform, a highly interactive platform that supports itself through subscription and by granting users access to premium gaming, TV, and film titles. It’s not beholden to Madison Ave. and it’s clearly not in the “deficit financing” game.

“[Xbox Entertainment Studios] was taking a big swing in the space, and I think we were all rooting for them. When people try to take unique approaches to content and try to do interesting types of creative, it’s good for the industry,” added Nocas.

While yesterday’s news rippled across the online video industry, the most important takeaway is that Silicon Valley and Hollywood have still not learned how to effectively co-exist and as an influential platform with a connected community, I think this move is a loss for more than the 18,000 that will be laid off by Microsoft.

But hey! Xbox has “an incredible opportunity ahead of [it] to define what the next generation of gaming looks like for the growing Xbox community.” Hmmphh. Gaming! Who does that anyways? Touche.

So what will happen with the Slate of Originals? I tell you the answer over here.


Tags: , , , , ,


Pioneering Hip Hop Exec Lyor Cohen Joins YouTube as Global Head...


Legendary Digital Reveals Alpha Subscription Service Launch...


Time Inc. Teams with Digital Comedy Producers Jash for Branded Content

Amazon Logo

Amazon Greenlights Three Comedy Pilots as Series

Industry Tickets Selling Fast!
Click above to lock in your registration for VidCon 2015!

How the Cartoon Network Combined the Best of VOD and Linear TV...


Jukin Media Goes Viral for Brands with Ethos Division Launch

Streamy Awards

Streamy Awards Trade In VH1 for YouTube, Again


Matching Ads to Videos Not So Simple, According to Zefr’s...


Plug Pulled on Canadian SVOD Service Shomi


What’s Trending on the Twitter Sale

Machinima Logo

Machinima Teams with SiriusXM for Daily Esports Radio Show


AwesomenessTV, Vice, Complex to Power New HearstLive...


VIDEO: ‘Dirty 30’ Confessions with Stars Hart,...


Facebook Says It’s Sorry It Vastly Overestimated Video...


Pilgrim Media Group CEO Craig Piligian (‘The...


Heroes or Rats?: YouTube Unveils New Program for Creators Who...

Vessel says it's doing well in its first month

Why Verizon is Pursuing Vessel, the...


How Canvs Media is Harvesting Emotional Insights on YouTube,...


Marlon Wayans Getting ‘Naked’ for Netflix with Regina Hall


HuffPost RYOT Launching Virtual Reality Comedy Series and News...


YouTube Launches #voteIRL Campaign Targeting Digital-First Generation


How Top YouTubers (incl. Tyler Oakley & Meghan Rienks)...


Charlie Sheen to Star in Crackle Feature ‘Mad Families’


Gunpowder & Sky Buys Distributor FilmBuff As Vision for...


Toy Freaks Top Viewed YouTube Channel in August According to...


Emmy Wrap-Up 2016: Jeffrey Tambor (‘Transparent’)...


Twitter Scores 2.1 Million Viewers for Thursday Night Footall Kickoff


Vloggers Not Unique Snowflakes: 90 Million Flag YouTube Videos...

Mode Media

‘Billion Dollar Startup’ Mode Media Shuts Down


Who Is Winning The Marketing Revolution And Why?


Netflix Orders ‘She’s Gotta Have It’ Series...


What Is ‘Swedish Dicks’ and Who Is Selling It?


How GMC is Using the AOL Series ‘Seamlessly She’...


Liberty Global to Put Netflix on Set-Top Boxes in 30 Countries


Getting to the Spine of VR’s Monetization Challenges with...


Meredith Hosted Its Own “Front” Stacked with 20 New Series


Verizon and Hearst Move and Seriously.TV Under...


Twitter Launches Live Streaming Apps for Amazon Fire, Apple TV...

YouTube Community

YouTube Fights Back Against Social Media Rivals with Community Feature

Casual Hulu

Vimeo Opening Television Store with Lionsgate Content, Launching...