Microsoft Corporation (NASDAQ:MSFT) will shutter-down its Xbox Entertainment Studios, original Xbox programming unit of the company. The news came on the heels of the announcement regarding the layoff up to 18,000 employees. The software giant conveyed to the GameSpot that it would “streamline a handful of portfolio and engineering development efforts across Xbox.”

Microsoft

“Xbox will continue to support and deliver interactive sports content like ‘NFL on Xbox,’ and we will continue to enhance our entertainment offering on console,” Xbox division head Phil Spencer wrote in an e-mail to employees Thursday.

President and EVP to stay

Under the plan, the company will shutdown XES, in the future month. The effect of layoff on the Xbox could not be magnified, as the according to an earlier report, the marketing staff of the unit was said to leave.

President Nancy Tellem and executive vice-president Jordan Levin would stay in the company and continue to develop original programming.

Halo Project will remain unaffected and will continue as per the plan with 343 industries. Also, the entertainment apps and watching TV through the Xbox One will not be affected by the decision.

Microsoft has already stated it’s plans about the content and the shows including a program from JASH (the comedy group comprised of Tim and Eric, Michael Cera, Sarah Silverman and Reggie Watts) and a soccer reality series known as Every Street United that was already streamed on the Xbox Live with the World Cup.

Content was always challenging for Microsoft

Winning deals for the new content was challenging for XES, and it was always unclear how the original programming will be utilized. Also, there was confusion over whether the content be available only for Xbox platforms or it would only be available for the Xbox Live Gold members. There was no detail over how the programming will be interactive to which Microsoft said will be a unique experience.

The primary aim of XES has been creating and developing content. Nancy Tellem, who was the former CBS executive and joined Microsoft in 2012, said in April that the work in the studio was still in its infant stage.

Digital World Research analyst P.J. McNealy said that closing down the studio is a rational decision. He added that it is a difficult call for the company, which does not have a core-competency in TV and movie-styled production, to make it strength.