Microsoft Destroyed Arkane Austin but the Studio’s Soul Is Indestructible

15 minutes into Prey, the 2017 sci-fi thriller crafted by Arkane Austin, protagonist Morgan Yu shatters their apartment window with a wrench. As hundreds of glass shards fall away, a newly revealed truth changes Morgan’s life forever. This genuinely shocking, perspective-pivoting opening is one of the most incredible introductions to a game world ever made.

Seven days into May 2024, Microsoft took up its own metaphorical wrench and shattered Arkane Austin. A veteran of immersive sims – those first-person, highly interactive games where RPG, simulation, and action systems interlock – it was one of the casualties of Xbox’s brutal dismemberment of Bethesda Softworks.

This is a heartbreaking situation. Staff laid off from Arkane Austin have been thrown into the toughest conditions the games industry has ever seen. But, if you’ll permit me to search for the light in this darkness, the soul of the studio has already proven itself incredibly resilient. This is not the first time that financials and parent companies have dictated the course of the immersive sim in Austin, Texas. Despite multiple hardships, the genre always finds a way to survive in this city.

First, let’s reflect on what has been taken. The messy and misguided co-op shooter Redfall may be Arkane Austin’s most recent release, but the studio is built on a rich history of single-player innovation. It crafted two timeless classics: the eldritch stealth sim Dishonored (built cooperatively with Arkane’s surviving Lyon studio) and Prey, a modern day reinterpretation of the brilliant System Shock. And according to Bloomberg, before Microsoft’s guillotine fell, Arkane Austin was already drawing up the blueprints for a new single-player game that drew on the team’s proven skills.

It’s impossible to know what that game would be, but if Dishonored and Prey are evidence of anything, then we’ve lost something with incredible potential. Dishonored demonstrates Arkane Austin’s talent for deeply interactive game worlds that respect and reflect player experimentation. Prey’s sprawling space station, meanwhile, is testament to the team’s vision when it comes to environment and campaign structure. Its roguelike DLC Mooncrash, with its overlapping stories of five protagonists, allows for inspired use of a single space depending on both who you play as and the order that you play their stories in. Both games also showcase Arkane’s unrivalled art design and fierce, anti-injustice narrative prowess – strengths even Redfall benefits from.

Arkane Austin’s approach to game design was genuinely beautiful – an elegance matched by few other studios. And, in a drive for soulless corporate number counting, Microsoft has destroyed it.

In Microsoft’s own multi-part documentary Power On: The Story of Xbox, a segment discussing the company’s woeful mistreatment of Lionhead Studios saw Phil Spencer say “You acquire a studio for what they’re great at now, and your job is to help them accelerate how they do what they do, not them accelerate what you do.”

You’d assume, then, that Xbox would want to foster Arkane Austin. To help it overcome the failure of Redfall and resume – to quote Xbox’s own Matt Booty – “making impactful and innovative games”. But if a highly profitable corporation worth over $3 trillion has no interest in absorbing one mistake and finding a way to shepherd its artists to success, then one thing is clear: that promise to help studios “accelerate” what they’re good at is empty.

Arkane Austin may be gone, but the people still remain. And that brings me back to the studio’s soul. That soul is a community; a growing collective of immersive sim designers that have endured success and hardship in the city of Austin for close to three decades.

The city’s link to immersive sims began in 1995. Looking Glass Studios, the East coast-based creator of the genre’s formative trio – Ultima Underworld, System Shock, and Thief – tasked System Shock producer Warren Spector with opening a new office in Austin, Texas. But while Looking Glass’ games proved critical hits, financial difficulties eventually saw the company collapse in 2000. The design language it established proved indestructible, though, and had already fled the nest.

Spector had been coaxed away by John Romero, the rockstar designer of Doom. Recently fired by id Software, Romero had set up his own studio, Ion Storm, and he wanted Spector to take charge of the Austin office to make, well, pretty much whatever he wanted. That project was the landmark immersive sim Deus Ex. Hired to help Spector craft this conspiracy thriller were designers Harvey Smith, Steve Powers, Monte Martinez, and Ricardo Bare.

This new Austin studio didn’t just keep the immersive sim recipe alive. When Looking Glass collapsed, Ion Storm’s parent company, Eidos Interactive, secured the rights to Thief and helped Spector relocate many former Looking Glass staff to his Austin studio to continue work on the franchise. But this second home for the immersive sim wasn’t to last. In 2005, financial struggles at Eidos doomed Ion Storm to the same fate as its spiritual predecessor.

The demise of Ion Storm could have been the end of the road for the immersive sim community in Austin. Even worse, the genre was endangered. Few other studios were interested in making this style of game. One that was, however, was Arkane. A French studio founded by Raphaël Colantonio, its first title, Arx Fatalis, was a love letter to Ultima Underworld. And in 2006 Arkane expanded into the US. Austin was an obvious choice.

Arkane Austin became a rally point to reunite key members of the Ion Storm team. Colantonio hired Harvey Smith as co-creative director, and he was soon followed by Powers, Martinez, and Bare. Once again, the city of Austin had another studio in which to foster and grow the creativity and ingenuity that began at Looking Glass Studios.

Thanks to Arkane’s two-studio system, the immersive sim mindset that made its home in Austin now extends across continents. Over at the thankfully unscathed Arkane Lyon, visionaries such as Dinga Bakaba, Sébastien Mitton, and Dana Nightingale are keeping the genre’s values alive, despite many of them not having direct ties back to Ion Storm or Looking Glass. Meanwhile, Raphaël Colantonio’s new company, WolfEye Studios (set up in 2019 following his departure from Arkane after directing Prey) is staffed by a variety of immersive sim veterans, including Monte Martinez, as well as enthusiastic newcomers. And beyond these headline developers, a multitude of indie games inspired by Arkane’s lineage, such as Gloomwood and Ctrl Alt Ego, are adding new voices to the fold. The genre endures because good art transcends board room statistics.

Arkane Austin 2017 pic.twitter.com/zDCB2vUitI

— Raphael Colantonio (@rafcolantonio) May 19, 2024

But what of Austin and its long-surviving immersive sim community? Harvey Smith, Steve Powers, and Ricardo Bare, creatives who have seen the city’s studios live and die, were all at Arkane Austin the day that Microsoft’s destruction order came through. Things are, admittedly, different this time. Arkane Austin’s shuttering wasn’t because of the so-called “immersive sim curse” of the genre being doomed to commercial failure. When a $3 trillion corporation won’t even support a studio whose game is a success “in all key measurements and expectations”, then it’s not about money. It’s sadly just cultural vandalism by capitalism, which is something of a new hurdle for immersive sims to navigate.

But, as I said earlier, good art transcends board room statistics. And against all odds, the immersive sim has always found a way to bloom in Austin. In a thread of thoughts on X/Twitter, Harvey Smith wrote “part of me is also wondering about team size, the role of certain types of creative groups, the role of bigger companies, etc. Maybe there is a sweet spot for the types of games I am driven to make in terms of team size?” Finding that sweet spot might be the first step to whatever comes next.

We can’t ignore that 2024 is the worst time for video game creatives in history, and Arkane Austin’s former staff face an uphill battle that can’t be solved with simple faith in the genre’s resilience. Nonetheless, the soul of Arkane Austin has roots that have been proven to be seemingly indestructible. And history does have a knack of repeating itself.

Matt Purslow is IGN’s Senior Features Editor.
Header art: Fred Augis, Arkane Studios / Bethesda