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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.
How much confidence do you have in Xbox as a brand? (448 votes)
- I'm confident these cuts will pave the way for new success
- I'm somewhat confident Xbox will remain a major player.
- I have little to no confidence in the future of Xbox.
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 15
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.
Please make the next halo title with the engine that Doom uses!
@themightyant I’m not sure I understand this argument. Of course the acquisition of ABK and Zenimax increased their employee count, that’s what happens when buying out a company. And yes, they have probably “bulked up” while developing the latest titles, that’s relatively common in the business. But that’s not an excuse; it’s not like they’ve only laid off the recently arrived employees or cut ties with companies they outsourced work at. They are laying off people, thousands of people, that were there before XBOX bought their companies. Hell, some of them probably were there before XBOX even existed.
Why would you buy a company and include the employees in the deal if you’re firing them and closing their offices a couple of years down the road? It’s extremely irresponsible and if you ask me, it should be illegal. They’re not even losing money; they just want greater margins.
AKevin15 wrote:
Because they wanted the presitigious IP, games and the income but don't want all the expenses. But from Microsoft's point of view the two came together.
It is normal during a merger or aquistion that there are job losses (BTW that isn't saying I support it, I don't, just saying it is normal) but usually this is around 30% over 5 years. Obviously this has been a lot larger than that now.
Honestly I don't think that was Xbox's intention but the state of the world has changed a lot since the ABK was announced, cost of living crisis, RAM-ageddon, etc. and we are seeing record job losses in gaming almsot everywhere trying to make the divisions books balance. Plus their Game Pass gamble hasn't worked as in ABK and Zenimax hasn't increased subscribers. Perhaps they shouldn't have bought ABK, but hindsight is 20:20.
The future of Xbox is PC so it can't fail. I very much dislike the move away from dedicated consoles but it makes sense now that there is only 2 CPUs and 2 GPUS. There's no IBM or Silicon Graphics to make this interesting anymore. PS5 verses Switch 2 is AMD vs Nvidia. Intel wants nothing to do with gaming on fixed spec devices and hasn't been part of the ecosystem since the first Xbox and the notes from those meetings show basically no-one that made decisions at Microsoft wanted to enter gaming as a console at that time. The same suits at Microsoft are killing it now. The brand will survive as a worthy competitor to Steam with a few fixed spec 'Xbox certified' systems but it's not a console and there won't be another 'console'. The next gen console wars will be Playstation portable and Nintendo portable because the only full sized options available will be some sort of PC running steam OS or Windows. I don't think I mind this but I do mourn for the nostalgia of the traditional console release cycle and the anticipation. I don't think there is anything being developed right now that has a distinction from a PC though sadly. No-one is making something unique and with their own silicon so what can we do? I have a currently absolute top 5090 64gb PC but it does make me think we're going to be scaling down the look and scale of our games for a decade to serve the portables coming from Sony and Nintendo and also due to the fact that if I didn't already have this system there is no hope in hell that I would afford it now. That's a huge barrier! Unless you got in there at DDR5 low prices and 5090 launch month, you're out.
@bemaniac You can make the argument that the future is PC, but I would argue that the future is actually Steam. Yes, Windows accounts for 93.95% of all current users on Steam, but the number of Linux machines running Steam will only go up from the 3.9% that it currently is. If Microsoft doesn't turn Xbox around, they are doomed to turn into Sega - just a whole lot larger than Sega.
@Spodlude would be difficult, as reportedly the idTech team was gutted in the last round of layoffs
@Someguyperson
I agree SteamOS is it I feel. Console competition remains dependent on how compelling Sony decides to make their next hardware. It's probably a PC though.
@Someguyperson I will be that guy, I really hope the future isn't just "Steam" for PC. They provide a solid store front, but their size and anti-competitive practices are red flags for what would be to come, if they continue their dominance. What they do to devs will eventually start happening to players, its just a matter of time. Even if Gabe stays a white night, he won't be there forever. I buy games on EGS when they are there, just because I want the devs to get a bigger cut vs Steams cut for a games's sales. Some games I buy from that dev's launcher so they get the whole cut. Steam is a monolith, and history tells us what happens, generally, when consumers become dependent on them.
@themightyant that’s fair but also, Microsoft is at least partially responsible for the current state of affairs. You can argue that Xbox is not exactly the same as Microsoft, but given the amount of scrutiny they went through during the ABK deal, I doubt MS was not fully aware of the expenses and risks involved with the strategy. They still went through with it, so “irresponsible” is the first word I can think of.
On the other hand, sure, they wanted the IPs. But almost any IP is worth next to nothing if you get rid of its creators. Moreover, some of the studios are going independent again retaining their IPs… it’s just stupid. It feels like they were only interested in COD and maybe TESO.
@AKevin15 To be clear I was against the ABK deal and more generally any mass industry consolidation. But the reality is ABK was going to get sold to someone regardless and we would likely be in a similar situation regardless considering the economic downturn and litany of other world events that had led us to this moment.
Sometimes, but I am not sure that is always true. Are the people that created COD for example still there? Are most of the people that created GTA still at Rockstar? The answer in both cases is no, but the IP still retains cachet. Ship of Theseus like situation at least mostly so, there may be a last few remnants of the old guard still there.
not too confident in either sony or xbox really
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