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It is being widely reported that Microsoft has once again chosen to shake up Xbox studios with a massive restructuring effort. Most prominently, 2023 acquisition Activision is taking over three key franchises: Halo, Sea of Thieves and Age of Empires.
There are expected to be 286 job losses as part of the changes, with Halo Studios being gutted - just a skeleton crew is expected to remain as it transitions into a support studio for Halo Infinite and Halo: Campaign Evolved. Meanwhile, a new "purpose-built team" will work on the next mainline Halo title.
World's Edge, the developers of Age of Empires, and Rare, which is currently supporting Sea of Thieves, are also joining Activision. Obsidian is set to join Bethesda amongst similar circumstances, conjoining the two most important Fallout studios. Over in Forza land, mainline Forza Motorsport developer Turn 10 is being subsumed by Forza Horizon developer Playground Games. Even Microsoft's casual games division is affected, moving from Bethesda to King.
Senua series developer Ninja Theory is also likely being shuttered, despite Microsoft announcing a 2027 Senua game just three months ago. The Game Business is reporting that two potential buyouts for the studio fell through.
Today's job losses bring the total tally to nearly 1900, meaning that Microsoft is expected to cull another 1300 workers in the next nine months to reach its promised 3200 role killcount. The company says it is 75 percent through its planned changes.
Here's the full internal memo from Xbox executive vice president Matt Booty describing Microsoft's take on the layoffs and restructuring, via The Verge:
Team,
I’m writing to share several updates as part of the XBOX reset outlined earlier this year.
First, we are eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer. The actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring. I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them.
Second, we are reorganizing our studios. The goal is to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise.
Activision will expand its remit to World’s Edge, as well as Rare. Activision will also be developing the next Halo title, led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty. A small team at Halo Studios will continue supporting the Halo community and games in-market.
Bethesda will expand its remit to include Obsidian, which will continue its current projects, including Grounded, as well as the new Fallout project made in collaboration with Bethesda Game Studios.
King will expand its remit to include Microsoft Casual Games, uniting our two global leaders in casual game design and live operations.
Playground and Turn 10 will come together as one studio focused on the Forza and Fable franchises. These two studios have been technological, creative, and franchise partners for over a decade, and today’s changes will formally move their work into one team.
Third, an update on our studio divestitures: In August, Compulsion and Double Fine returned to management with their IP, back catalogs, and runway funding. Undead Labs has now successfully transitioned on similar terms and, with a new publisher, will release State of Decay 3 day one on Game Pass. Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward. Consultation with Arkane remains underway and is expected to continue through the end of the year.
Today, our focus should be on supporting those affected and treating one another with care and respect. I will spend time with our studios over the next week. At our October 6 town hall, we will come together as an ALL-XBOX team to reflect on our progress and look ahead to one of the strongest game lineups in our history.
[source news.xbox.com, via thegamebusiness.com, theverge.com]
Comments 4
Since the start of the generation, Xbox has laid off somewhere between 6k-7k employees, and we know more are on the way. Most of that within the last few years, as their plans for this generation have not played out. Focusing on GP and multi-platform was an interesting gamble, but eroded the value of the brand and the studios. The worst part is, their choices for rebranding are all over the place, so I can't even decide if things feel like they might be able to turn around.
Buying Kojima's new IP, Physint, during these cuts is wildly hard to understand. I love both Death Stranding games, and his style of art and storytelling, but I also know its a niche opinion these days. Konami realized he spends too much money for the games he makes, Sony also realized he spends too much money for the games he makes, and now Xbox (who is making cuts all over the place), wants to invest in a game that is already signaled as being over budget and behind schedule. What is the logic here? Who is making these decisions?
Maintaining core customers requires maintaining the core business. Xbox has always been behind in terms of market share but you don't have to be the leader in your space to be strong company with a great reputation. Xbox feels like it wants to be on the level as its parent, Microsoft, who I'm sure shares some of the blame for that vibe. At some point, you have to accept where you are and what you are, make that solid, then you can start building outward again. Shutting down studios you bought, that people loved, because it turned out you couldn't actually afford them is not winning anyone over. It keeps people cold to your brand. Then making silly little heart felt posts about it is just unpleasant.
Working for Xbox has got to be a bipolar emotional ride. I'm sure the corporate perks are amazing, but wondering when you'll be next has also got to be horrendously stressful. I'm not naive, I understand that sometimes to keep the majority of people employed you might have to cut expenses. There are a lot of ways to do that. Sadly, sometimes cutting out redundant salaries is part of that. But almost 7k over a few years is just reaping terror because no one held you accountable for the expenditures along the way.
Gaming is in a crazy place right now, it's bigger than ever, but the oldest players are at odds of finding their place in the new landscape. Some of it isn't their fault, no one saw the AI boom coming on so fast, and raising prices so high so quickly. But the poor choices made prior to this shift are only highlighted by what has happened, not absolved by the "who could have guessed" situation the big players are in.
I'm so tired, boss.
@RealBrown22 Playing devil's advocate (and perhaps today isn't the day for that, but screw it) Xbox have taken on far more new employess than they have laid off in that time. i.e.
Around 10k from ABK deal, another 2,300 employees in the Zenimax deal, not to mention reportedly well over a thousand to existing studios like Playground games, Halo Studios, Obsidian, The Initiative etc. as they staffed up to make bigger games and become multi-team studios.
Now I am not here to defend 7k people getting laid off in X years, it's truly awful, it really is, but it is worth pointing out that it's only one side of that equation, gamers conveniently ignore the other side in their rush for pitchforks.
Some of these moves do make a lot of sense (Playground + Turn 10, Obsidian + Bethesda), but others don't really make much sense at all, namely the killing of Halo Studios. It seems that Asha thinks all FPS games are the same, so just lump Halo together with CoD, right? This is some of the completely tone deaf management that makes things worse by barely understanding the problem instead of being able to take a scalpel to the problem and making the small decisions necessary to righting the ship.
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