Tango Gameworks had previously pitched a follow-up to Hi-Fi Rush, but the company felt that their studios were under too much pressure.

Tango Gameworks, a game development studio that was reportedly working on a sequel to the game Hi-Fi Rush prior to its closure, is now confirmed to be part of the recent announcement by Microsoft regarding the closure of four Bethesda Softworks studios. The announcement came earlier this week and included the closure of Tango Gameworks as well as Arkane Austin, the studio behind games such as Redfall, Dishonored, and Prey.

In an email sent to employees, Xbox Game Studios head Matt Booty explained that the decision to close these studios was based on the company’s commitment to producing high-quality games and investing in its existing portfolio of popular titles. He noted that this reorganization of resources and projects would see some teams reallocated to other areas within the company.According to a recent report by Bloomberg, Tango Gameworks is working on a sequel game. However, at a meeting with employees of ZeniMax on May 8, Booty expressed concerns about the studio’s workload, comparing it to spreading peanut butter on bread.

With leaders in the division feeling understaffed, Booty said they decided to close Tango and Arkane Austin in order to “free up resources elsewhere.” Booty later clarified that the closure of Arkane Austin is not related to the performance of their latest multiplayer game, Redfall, which underperformed after its release last year. The studio’s closure also occurs just before the expected release of a major update to the game.Tango Gameworks was not the only company seeking to develop a new game. According to reports, Arkane Studios in Austin, Texas, sought to return to its roots with a single-player immersive simulation game, such as a potential new installment in the Dishonored series. Both projects were in the early stages of development and several years away from completion at the time of the studio closures.

Following the announcement of the closures, The Verge reported that Microsoft was considering increasing the pricing of Xbox Game Pass, specifically its Ultimate tier, and that there had been internal discussion within the company about whether to include new Call of Duty titles in Xbox Game Pass subscriptions.