July 17, 2014 / 7:19 PM / 5 years ago

Microsoft ends flirtation with Hollywood and original shows: source

An attendee uses her smartphone in front of a giant Microsoft Xbox sign at the 2014 Electronic Entertainment Expo, known as E3, in Los Angeles, California June 11, 2014. REUTERS/Kevork Djansezian

LOS ANGELES (Reuters) - Microsoft Corp intends to wind down Xbox Entertainment Studios, a source familiar with its plans said, becoming the first major tech company to give up on making original shows in a battle for the living room couch.

The production outfit’s impending closure is part of a sweeping restructuring announced by the software giant on Thursday, which includes the largest single round of layoffs in the company’s near-four-decade history.

The studio, set up in 2012 under then-Chief Executive Officer Steve Ballmer, said in April it had committed to several projects including “Humans,” a drama co-produced with UK broadcaster Channel 4, and “Halo,” a digital feature based on the best-selling Xbox game.

Hollywood director and producer Ridley Scott is making “Halo” and it will survive the cutback, according to the source familiar with Microsoft’s plans who was not authorized to speak on the record.

Microsoft was among several tech companies that raced to add original TV-like content after the release in February 2013 of Netflix Inc’s “House of Cards,” a political thriller that built buzz for streaming video and earned the first Emmy nominations for a show delivered exclusively online.

Many are soldiering on, vying to dominate living rooms as video-streaming becomes an increasingly popular option for household entertainment.

Amazon.com Inc is preparing to release a second season of the John Goodman comedy “Alpha House” and two other original series this year for Prime Instant Video.

Hulu is adding to its original productions, which already include supernatural comedy “Deadbeat” and upcoming reality satire “The Hotwives of Orlando.”

Yahoo and Sony Corp also remain in the game and pitched advertisers in the spring on longer-form shows. Yahoo recently picked up canceled NBC comedy “Community” for another season. And Sony features Jerry Seinfeld in “Comedians in Cars Getting Coffee” on its Crackle digital network.

Editing by Edwin Chan and Tom Brown

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