Xbox Entertainment Studios may continue to operate with a new owner

Microsoft’s recently shuttered Xbox Entertainment Studios might not be as dead as we’d initially been led to believe. The tech company is reportedly seeking a buyer for its short-lived experiment in non-gaming entertainment, and Hollywood studio Warner Bros. is said to have participated in preliminary talks to that end, as unnamed sources revealed to The Hollywood Reporter.

Should a sale go through, XES would become its own production arm that WB would look to merge with Machinima, the video games/gamer culture-focused YouTube network that the studio owns a chunk of. It should be mentioned, however, that talks with WB are at their earliest stages, and that a sale to the studio is “unlikely.”

Both Machinima and XES refused to comment, but an official statement from a WB spokesperson echoes the murkiness of the situation: “[Warner Bros.] is constantly having preliminary discussions regarding business opportunities with numerous companies at any given time. A conversation is just that — a conversation.”

The important takeaway here is that Microsoft wants to do anything at all with XES, other than shut it down. The studio’s end is part of a larger restructuring initiative that’s underway at Microsoft, which CEO Satya Nadella revealed in a publicly shared, company-wide email sent in July 2014. The closure was addressed directly at around the same time in a statement from Xbox boss Phil Spencer.

Related: Why shutting down Xbox Entertainment Studios is the best thing Microsoft could have done

“Change is never easy, but I believe the changes announced today help us better align with our long-term goals,” Spencer’s statement read. “We have an incredible opportunity ahead of us to define what the next generation of gaming looks like for the growing Xbox community. I have a great deal of confidence in this team and know that with clarity of focus on our mission and our customers we can accomplish great things together. We already have.

The pace really picked up for Xbox Entertainment Studios in September 2012, when Microsoft hired former CBS executive Nancy Tellem to take charge of the fledgling entertainment division. This was some months before the company’s Xbox One reveal in May 2013, an announcement that focused just as much on the TV integration and original programming potential of the new game console as it did on the games themselves.

Ambitious plans were laid, for a Steven Spielberg-produced Halo series, for documentaries looking at everything from video game mythology to street soccer, for gamer-friendly sci-fi content, and for projects based on known game franchises. Much of this never came to be. Some of it is still in production as part of the last gasp for XES, but the more speculative projects were believed to have been dismissed with the announcement of the production studio’s closure.

There’s no telling what a purchase, by WB or any other party, would mean for those nascent, seemingly abandoned plans. This isn’t a studio that had much time to develop an infrastructure, so the key selling point for interested buyers is the brand itself. Microsoft would presumably remain partially invested and provide support in the form of licensing permissions and brand assets, but it’s important to remember that this is all pure speculation.

All we really know for sure right now is that unnamed sources have suggested Microsoft is seeking a buyer for XES. Who steps up with an open wallet — if anyone — and how the sale shakes out remains to be seen. But for the moment at least, it appears that XES isn’t dead quite yet.

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