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It’s been a crazy few days for Xbox, a major publisher of PS5 games.
It announced several new titles for Sony’s system on Sunday, including State of Decay 3 and Senua.
But it also confirmed the return of console exclusives, something it’ll “try to do more” of if the health of its business improves.
On that note, Bloomberg (paywalled) reports a wave of layoffs are incoming, which could number in the 1,000s. The Verge says a studio closure may be among the cuts.
Journalist Jason Schreier reports the layoffs will be announced shortly after Microsoft’s financial results on 30th June, and budget cuts are also expected, specifically to departments like marketing.
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An internal memo – now shared publicly to consumers on the Xbox Wire – says Xbox has been operating at a 3% accountability margin, which basically reflects the percentage of revenue a division retains after taking into consideration a variety of costs.
Sharma paints a grim picture of the situation:
“Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue.”
This is an extraordinary statement, especially to see it published publicly on an official Xbox website. Spending over $20 billion only to see annual revenues decline by half a billion is staggering to say the least, and perhaps helps explain the sudden departure of ex-leaders Phil Spencer and Sarah Bond.
Bloomberg continues that Gears of War: E-Day was in development for the PS5, and retailers were expecting to take pre-orders this Sunday, after the Xbox Showcase. According to Schreier, many Xbox employees were surprised by the announcement that it will no longer release on PlayStation.
The report also claims that a Halo: Campaign Evolved trailer had been planned for Sony’s State of Play last week, before Microsoft pulled the plug, “potentially damaging the relationship between the two companies”.