Microsoft is shutting down the bulk of its Hollywood unit as part of a broader restructuring at the software giant that will result in 14,000 jobs being cut.
Launched in 2012 with big expectations, Xbox Entertainment Studios will wind down operations in the coming months. Nancy Tellem, the former CBS President and Jordan Levin, a well-regarded programmer, will see through some current projects in development before exiting.
Tellem was brought in with great fanfare in 2012 to oversee XES, and Levin was hired just five months ago. While the hires got notice because both are well regarded, Microsoft's commitment to original content and the resources necessary to make it seemed to constantly be changing.
The cuts at Microsoft and the decision to step back from creating original programming are the first major moves since Microsoft bought Nokia in April. New Chief Executive Satya Nadella, who succeeded Steve Ballmer, has indicated that the company is shifting much of its focus to mobile and cloud-based technologies.
In an email to staffers last week, Nadella had he wanted Microsoft to be a "productivity and platform company for the mobile-first and cloud-first world."
The move took XES executives by surprise. In May, the unit presented its original programming development to advertisers and marketers in New York City.
The goal of XES was to create content for Microsoft's Xbox platform. Its biggest project is a series based on the popular video game "Halo," which is expected to continue production despite the pulling back from Hollywood by Microsoft.
XES was in advance talks to telecast "Halo" on the CBS-owned premium channel Showtime as well on the Xbox platform, and those negotiations likely will continue.
Besides "Halo," slated to begin production in 2015, other shows that will remain in the XES pipeline include the documentary series "Signal to Noise."
Microsoft is the latest tech company to struggle with how best to work with Hollywood. Yahoo has struggled to use its platform for original content.
Follow Joe Flint on Twitter @JBFlint.