'I Know This Is Painful': Xbox Confirms 3,200 Job Losses in Industry Bloodbath

The fact that none of those studios are closing is a big silver lining, I’m surprised at that.

We knew this was coming, but it stings all the same. Really feeling for all the people losing their jobs. At least some of the studios have been given an opportunity to continue on their own. Silver lining, I suppose.

Good news is that those four studios have dound a way to progress without Microsoft. The bad news, everything else.

That's just insane, I can now see why people are shifting from Xbox. For me this is the after effect of gamepass.

Letting all those studios continue to exist is a big win. Wonder what if any IP they take with them.

Wow. That's painful to wake up to. Hopefully this leads to better games for these studios now that they're no longer tied to M$.

I'm happy the studios managed to get free. But it's a really bad time to look for publisher investment. Some like Double Fine have a bad habit of overspending.
They'll need to work smarter and to the chagrin of many focus on IP like Psychonauts rather than silly side acts like Kiln

This is horrible news, but least the studios were allowed to survive, losing Double Fine would have exceptionally painful.

Rough to see. Heart goes out to those devs, hope the studios can stay afloat in this day where investment is flowing to AI instead.

Feel bad for the people that were let go, but on an optimistic viewpoint, none of the studios were flat out closed.

Activision deal was silly, COD was not worth what it did to Xbox

Hopefully everyone finds a job elsewhere

Gamepass tax

Glad this is finally out, hopefully people will leave Sony alone and go after the real villain in the video game industry.

It's the industry people I say the same when it's any other companies doing it!
This is where the industry is now oversaturation of the market too many studios too many devs too much for the industry to support.
It will continue on all sides!

@ThePlaystationStan Bowser??

Dark days in the gaming industry. When will things get better? Ever? I'm in no rush to move on to the next generation with all of this bad news.

Damn, 3200! Does that include the 4 studios or not? Seeing as some were sold and not layed off per se. I wonder who bought Ninja Theory and Undead Labs though, probably hear more soon.

Also thougt Arkane and Blade were safe, but apparently that’s still up in the air

So Sony really were using thousands of people losing their jobs as a shield to hide behind while gaslighting millions of people and moving to completely destroy the ownership of the things we buy. I'm actually shocked they've turned out to be quite this evil. I know they're a corporations and profit driven etc. but still, they've set a new standard for scum. Cowards.

@Bluemoon2008 they're all walking away with their IP/portfolio's intact. Which is good for them, I guess

Horrible news for the laid off but hopefully they land on their feet. It’s nice that MS isn’t outright closing any of the studios. Some won’t survive (times are tough) but at least they are being given a chance.

Bet Sony are happy.

Well done Phil this is your legacy and to think he wanted to buy more and Nintendo.

@ThePlaystationStan Herman?

@ThePlaystationStan Why do you want Sony to be left alone, are you a major shareholder? All big companies should have their feet held to the fire or they’d get away with anything.

Microsoft has failed these studios they’ve purchased over the years. Big promises, disappointing delivery, that’s even if they delivered at all. I can’t say I would understand why anyone would willingly work under the Xbox umbrella anymore. They have proven to be one of the riskiest employers in the business to work for.

“ CEO Asha Sharma wants Xbox to reach 1bn players a day (it currently hits 1bn a year).”
Says everything you need to know about the current regime, yes that’s bn as billion, 12% of the human population and they want to reach them daily?! They aren’t serious about this, they’re only serious about fire selling the company piece by piece, it’s why they do all this peacocking with crazy statements like that and pandering to twitter warirors.

@ThePlaystationStan Criticism can be levied at Sony and Microsoft simultaneously for different reasons. Just because one turd sandwich has a cherry on top, that doesn’t mean it’s not poop.

@get2sammyb that number is so staggering it sounds fake. Bungie laid off 290 people recently. What Xbox has done is equivalent to 11 Bungie lay offs.

When you see numbers so big you start to get desensitised but I genuinely feel for all the people getting laid off in a god awful job market.

@Mr-Cage

Who is the greatest video game villain?

Dr robotnik is pretty dark with his animal experiment's and enhancements.

The reapers also got to be up there

@Bluemoon2008 says the studios will retain ip and runway on their next projects over on purexbox

This was unfortunately entirely predictable.

I said Microsoft would end up shedding loads of people and studios when they were buying up Activision. Anti-trust agencies aren't bold enough.

And this is a long-term Microsoft pattern of changing strategies and shifting commitment to gaming.

Horrible horrible news. Surprised they’re returning to being independent studios which is a big silver lining but regardless this is devastating. Things are just awful out there, I was laid off right before Christmas last year and still there’s nothing. It’s beyond disheartening.

Never mind a crash, we're truly living in the depression era for gaming. Maybe, just maybe Microsoft shouldn't have been allowed to buy up half the games industry in one swoop.

@ThomasHL the FTC was bold but Microsoft are one the best lobbyists in the world. These guys have never lost and they enjoy broad support on both sidez of the aisle. Especially because of the defence contracts.

@Anthony_Daniels Actually a great question!
The ghosts from pac man must be up there aswell!

So what's the total figure of Xbox lay offs and studio's let go/closed since gamepass began?

@AdamNovice It’s not really usual, it only happened with Toys for Bob and Tango Gameworks was closed but revived by Krafton, honestly if anything they have more financial incentives to downright close the studio so it’s commendable they at least seeked alternatives rather than just closing all 5 studios, I’m honestly more concerned about the teams that remain at Microsoft with 50% of the announced layoffs still looming for the next few weeks.

@EvilBear not at all. Sony's only crime is to do the ecosystem a massive favour by eliminating plastic waste (which has been a long time coming). To put them on the same plane as Microsoft is disgraceful.

Layoffs suck and it’s still bad but at least no studio was shut down or games were cancelled

@NerdyPaul You could argue those two massive acquisitions were specifically bought to feed gamepass with content. They stated before they wanted to release a game onto gamepass every three months.

Take me back to the early 2000s and peak gaming please.

@UltimateOtaku91 Can you also see that prople are moving away from PlayStation? Unlike Microsoft, Sony closed studios. Finito!

@Grapeshot this is the world we live in now.

None of Elon Musks public companies have ever achieved the long-term targets they set, but they've got truly barmy stock prices because surely they're going to hit the next ridiculous overinflated target.

It's been 20 years and Tesla aren't even the best selling electric car company, never mind the best selling car company, never mind better than all the other car companies combined together - which is what their shares value them that.

Money goes to the companies that can spout the stupidest *****.

Or more cynically the shareholders know these figures are not credible, but they think they're the ones who will get out just before the crash

Microsoft didnt just close the studios like is normal in this kind of scenario.

the 4 studios will remain open and even have their IP which is incredibly rare thing to happen usually IP is kept by the owner

@Max_the_German Yes I can, I stated on another article that upset Playstation gamers will move away but will move to PC or Nintendo over Xbox for similar reasons.

@AdamNovice
Someone else may have already answered, but I suspect a big part is that if they offload they won't have redundancy payments, and any agreements they have made to pay others for future work won't need to be paid by them / won't incur cancellation fees.

@NerdyPaul Nice prejudices! Do you really think that all of these people in charge are without empathy? I know people who had to lay off in masses, and they still suffer from this pressure. And they knew: If I am not the one who signs the decision, another is doing it, but I will have a hard time finding a new job.

@Grapeshot is that right about 1bn a day. see that's the problem with Xbox they're too greedy. When you try & create a game to appeal to that many users you'll enviteably have to water-down your product so much that it's fit for everyone yet appeals to nobody.

@ThePlaystationStan “Disgraceful”. Yeah, okay. Anyway, they’re both doing things that are crappy to the industry. One evil does not equal the dismissal of another.

@anoyonmus yet? Some are going independent and may not come up with the necessary funds. Others may not find someone to buy them. It doesn't sound particularly optimistic to me.

Year long restructuring, might see more layoffs and studios impacted

Well overdue! The whole industry need tearing down and rebuilding

I hope the people that lost their jobs find work quickly because this sucks. The one silver lining is that the gaming studios aren't being closed but I do wonder who partners/buys the studios.

Double Fine and Ninja Theory make unique games but I wouldn't say they are big money earners, same with Compulsion.

Undead Labs I don't know enough about so I can't really make a comment about them.

I could see Sony looking at Ninja Theory for a partnership like back in the day or Double Fine. Would be a nice change to their catalog of games.

@LogicStrikesAgain
Sadly thats 3200, not including the 4 studios, according to Pushsquare.

Quoting from the article:
"The layoffs are calculated separately to the studios being spun off."

@Mr-Cage

Right they might be the most iconic for sure.in all of gaming, not the most evil though

Who knew spending 69 billion dollars would cause all this? At least we got CoD Day 1 on Gamepass for 2 years which the latter one was awful experience. Right guys? That acquisition was clearly for the good of industry. Yeaaay!!!

@Anthony_Daniels Well not to get to dark but technically hilter??
He's been in a lot of games an in reality was an evil micropenis man who did horrible things!
If we are talking straight up evil it's him or Satan he must be in a couple games?

@Max_the_German Did you really just pull a “Leave the rich executives alone!”

@Mr-Cage 🤣 you mean ganondorf?

@Old-Red Gaslighting lol. We're fully aware of what's going on. No wool being pulled over my eyes anyways.

@AdamNovice of course there is.
If they off load they sell it. Money comes in.
They close it then they have redundancy to pay for every single employee.

Always better to sell an asset than just write it off as a loss especially when you have to pay for that write off.

Well I guess it's safe for Sony to be active on it's social media accounts again. 😩

@8th_Observer No, I say that these people are no heartless monsters but humans, and some of them even with a conscience. But that shouldn’t stop anyone from living with an ‚them up there, us down here’s mentality.

"Today’s decisions do not reflect their talent or dedication. It does, however, reflect our lack thereof."

@nessisonett Sorry to hear that man, hope you find something soon 👍🏼

Ninja Theory are cooked. They will close if/when the new game releases.

I'm more in the "if" camp at the moment.

@NerdyPaul i mean she has been nothing but transparent she had a hard choice and yet still didnt close any studios

Well, thats completely horrific, and well beyond my anticipated worst-case scenario...

@Swandivetotheasphalt none of the studios have closed? surely that was the wors case scenario

@AdamNovice Potentially, in Arkane’s case French labour laws are quite stringent. If you can offload the studio for $1 all the liabilities go with it. As with most things the devils in the details.

It’s good to see the last five studios they let go of either get bought or go their own way instead of just firing everyone.

They’re now following the Sony model where they will only focus on about a dozen mostly low risk games that make money. Will be interesting to see how that plays out.

So happy the studios weren’t closed down. Compulsion in particular. I do hope a new game in the south of midnight world can be created. I would love to join Hazel on another adventure. Hoping all the people that lost their jobs land on their feet.

@AdamNovice Maybe they want the people to keep a job? 😹

im glad senua and state of decay 3 are still coming out

@Toot1st It’s as good as. Microsoft is laying off thousands and the rest at these studios rather than taking full severance will try to cling onto jobs if the management buy out can raise any funds. For those 5 studios it’s not far off worse case honestly.

@Toot1st yeah, the 3200 people losing their job is minor compared to that.

They're cutting those studios loose. Which means they are responsible for their own funding and will probably lose 50%+ of their employees. How many of Tango employees remained in a job? Im pretty sure it was a tiny number and Toys for Bob was like 20 people or something.

@themightyant I don't know, when they say not closing it could be a technicality in a few cases. We need to see exactly what the managed disposals or ‘divestment’ actually looks like. If most of the staff are laid off and management are buying a shell or assets and keep a skeleton crew on. A couple of the studios seem close to launching a game so may be able to raise financing. Fingers crossed.

Hey Sony, waves we still havent forgotten your discless future...dont think this'll hide what you're doing.

@Mr-Cage There's no oversaturation on the market. There isn't such thing as "too many studios". The game market grew 9% last year, people are spending on games more than ever before. The layoffs are due to braindead decisions of top executives: unsustainable acquisitions which will never pay off, gamepass cannibalising sales so Xbox might get bigger market share, and inability to put more money into innovation rather than into old tired remake of a remake of a game which was popular in the last century.

Gee, I wonder why Sony made their announcement when they did. Couldn't be to have the next big gaming story bury it in the online discourse shortly thereafter....

Whats painful is that MS took so long to "wake" up to what there devs were putting in games that tended not to be big sellers.

Perhaps to late.

@viktorcode The amount of layoffs all companies have made would suggest different also the shear amount of games released every single day with some peoples hopes of it turning a profit but ultimately not would also suggest different.
The growth isn't enough otherwise job security in the games industry would be considered safe rather than risky at best which it is right now.

@KundaliniRising333 But surely the Sony story would still effect playstation gamers more than people nobody knows getting sacked from a rival companies studios?

@get2sammyb

Can we get clarification for that 4,800 number? As far as I can read the statement, the 1,600 jobs eliminated today are part of the 3,200. This article seems to be adding them up as if they were two separate figures.

Edit: I think I see the error here: the anouncement clearly states of the 3,200 jobs cut, 1,600 are effective today and the other 1,600 will be phased out throughout the fiscal year. This article is misrepresenting the total number by a very large number. /endedit

Also about the "The layoffs are calculated separately to the studios being spun off." statement, would love to see a statement that clarifies that because so far I at least after asking Jez from Windows Central he sees to think they are included in the role elimination.

I bought South of Midnight and both Hellblade games. I'm fairly sure I'm in the minority.

Difficult times for this industry, that has become bigger than the film and the music industries and way too bloated after the pandemic. The good news is that none of the announced games have been cancelled and that these Xbox studios are not closed down but spinning off on their own or being acquired by another parent company, except Arkane that doesn't seem to have decided what to do yet.

Compulsion Games and Double Fine Productions will return to management and transition to independent studios with their IP, catalog, and runway for their next games. Ninja Theory and Undead Labs have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3. In France, Arkane’s management is beginning required consultation with its Works Council to review potential strategic options.

@SMJ

I bought South of Midnight and both Hellblade games. I'm fairly sure I'm in the minority.

Unfortunately, not many people bought their games despite being available on PS5 and even Switch 2.

@Banjo- Which shows why they aren't being kept by XBOX.

@SMJ True. There is another bit of today's statement that I found interesting and matches what many here have been saying for weeks.

The number of games created each month across the industry now outpaces the last ten years combined.

Basically, too many games.

@Swandivetotheasphalt never said it was but it would make sense that 3200 people losing thier jobs plus the stuidos being closed resulting in even more people losing jobs and ips lost forver would be the worst case if only one of those things happened then its not the worse case

@themightyant Thank you for that clarification. Still would love if anyone can point at the 3,200 actually being separate from the divested studio workforce.

@Banjo- Too many people making too many games costing too much to make and taking too long be made. A perfect storm.

@Toot1st I expected ~1000 people to get laid off so this is way beyond my own personal expectations. Others may differ.

@jruasap we had it so good 6th & 7th gen. it was magical

I bet Sharma and the other executives will keep their multimillion dollar salaries though.

After reading Asha's release, I wish my company made similar changes. Remove middle management. Empower team leaders and those direct contributors. Breakdown those barriers between those contributors and the leaders making the bigger strategic decisions and vice-versa.

Obviously I'm never happy for when people lose their jobs, but streamlining processes can lead to some better outcomes.

@pyrrhic_victory Oh, you know it. And they’ll probably get their bonuses still, too.

Very surprised to see a complete lack of Rare considering all that they've done recently is Sea of Thieves, which I guess makes enough cash for them to fly under the radar. Also, I can't help but notice all the studios let go were the ones that added a little spice to the usual identikit MS line ups. The last MS conference was like a paint by numbers from the last however many years just making the same games in the same series from the same studios with a couple of bright lights here and there which have now been snuffed.

Watch as MS actively doubles down on the same tired franchises to the extent that no one even bothers with conference bingo because it would be a waste of time. Halo, Gears, cars, Elder Scrolls online update, CoD, SoT update, disappointing Obsidian thing. I guess thats what the audience wants but MS have not made anything unique in years.

@charbtronic I agree. Today's statement is worth reading. It clears a lot of doubts about the Xbox reset. I'm shocked to read a CEO being so brutally honest and straightforward. We are not used to this.

https://news.xbox.com/en-us/2026/07/06/resetting-xbox/

@LemanRusk Asha should visit Rare soon and make them work on the most-requested IPs besides Sea of Thieves DLC and new artistic projects that do not "Ever" become games.

@AdamNovice I think it's a stroke of genius. There are so many people discussing and being happy that those studios haven't been shut down that it is distracting from the 3200 that have lost their job.
Xbox has played the public very well here.

@themightyant

UPDATE: Jason Schreier seems to have confirmed "1,600 jobs will be eliminated today, and then another 1,600 (including the studio divestments) in the next 12 months."

So... we take Jason Schreier as clarifying that it is indeed an inclusive count? The divestments are counted in the next 1,600 cuts?

edit:

There really are too many games releasing, the market can't support them all.

I would say the market can't support all AAA games releasing. The market can, IMO, support that volume of games IF the games:

1) Don't cost hundreads of millions to make
2) Don't try to monopolize consumer time (finite single player experiences)

There are enough players out there willing to spend their time and money for low-cost games that consume a few hours or days of their time. When so much of the publisher catalog demands millions of units sold at a minimum of 70/80 price tag, though, yea... that is saturated. Even more when we count the multiplayer games with hooks to keep players playing every single day of the week for months uppon months.

@Llamageddon There are also revealing bits about the layoffs:

We are operating at margins that are 3-10x lower than comparable platform and publishing businesses. [...] Today, in some parts of the company, work passes through as many as 14 layers of management. Our platform teams are 40% larger than they were at the start of this generation, even as our player base and playtime have declined. That complexity has slowed decisions, blurred accountability, and made it harder to deliver for players.

PlayStation can resume posting on social media now lol

@themightyant I might be biased, because I long for the days of shorter more frequent games, but I still think the current inflated dev cycles are a problem of publisher's own making.

It's a falacy that the more money they throw at a game, the more impressive it will be and the bigger the payout. I also have heavily critisized in the past how even sequels tend to get remade from the ground up instead of reusing assets.

And the thing is, Nintendo seems to be thriving precisely by avoiding that trap. Yea, many love to scream how "their games look like crap", but they are the only publisher not struggling with output OR unsunstainable dev cycles. And their games sell enough to cover the costs.

@MinervaX76 Yep, I think the problem is basically spending 8 years and $100m in games that eventually flop and not just on Game Pass but on Xbox, PS5 and Switch 2. That doesn't apply to Obsidian's Pentiment, because it was developed quickly as a passion project, but does apply to Compulsion's South of Midnight and others.

@Banjo- 100%. Pentiment and even Grounded could had sold less than a million total and likely be fine. Although I might agree that something akin to Pentiment feels "too indie" to devote resources for as a first party studio, it still was not a huge gamble.

But South of Midnight could had perhaps been half it's size, deliver earlier, and require way fewer players to break even. That in turn could even open them up for sequels.

Also not every game needs to be a gigantic open world!

@AdamNovice It costs more to do it that way, so no incentive other than maybe just trying to be "nice" to the teams.

3200 jobs lost. Just, wow. I feel so bad for these people.

We have seen this before and are seeing it again. What we thought was art combined with storytelling is laid bare to reveal what it really is: another avenue for investors to profit from an industry into which they themselves put very little (if any) of the work and creativity. It is another sacrifice to the god of capitalism that has been perverted into further wealth consolidation leading to bigger gaps in social inequality.

Microsoft clearly did everything they could to keep studio closures out of the headlines at least. Still a massive bloodbath though, but less gamers will be upset if the companies still exist. and MS knew that and acted accordingly.

Xbox and Playstation are racing to rock bottom.

At the very least, those studios are free from Xbox.

@Banjo- it really has been an eye opener to what a convoluted mess parts of the Xbox infrastructure had become.
I'm just hoping we see a bit more stability from all the platforms moving forward.

I like how they specified that none of the first part “public ally announced” games are being cancelled.

I wouldn’t be surprised if MS actually release their own streaming platform and clamp down hard on YouTube.

@AdamNovice i always called it a ceasar mercy technique. Pardon your enemies so they feel indebted to you. This studio would be grateful microsoft let them still exist and in turn will have a better relationship with xbox than with sony. Look at toyrbob for example

All the people coming on places like this and trying to incite Playstation fans, I bet you're all feeling pretty silly now huh? Really puts the digital games 'fiasco' into context when your favourite console manufacturer has just laid off thousands of people.

Days like this made me proud to be raised in a Playstation household. I wouldn't be seen dead with an Xbox or Nintendo.

These studios that they are getting rid of barely sold any games. How are they supposed to survive on their own?

"Shawarma" hits hard.
Usually doesn't make you slim, au contraire, but in this case she may make Xbox anorexic...

@NerdyPaul new boss hasn’t had time enough to right the ship. This is all Phil residuals. “Philsiduals”, if you will…

@darylb24 nah. Most gamers don’t care more about this than not being able to buy physical games. Trust!

A few points to note here;1) this has nothing to do with game saturation or market saturation, Microsoft demands an extremely high ROI period. 2) Microsoft never seemed to understand the game market and industry 3) game devs and creators get laid off when they are done with games ( it’s akin to gig economy) this is just on a bigger level and different timeframe. I say that to say this, these people tend to run in the same social/ work circles. This presents a HUGE opportunity to open up more independent developers and companies, without the restrictions and demands of a large Corporation. Ultimately this may prove to be a good thing. Little pain and grinding now might bring about another golden age in gaming.

@ThePlaystationStan brother that “PC master race” type elitism only hurts you. I have multiple consoles and I do prefer my ps5 but I also wouldn’t have had access to some great games if I just boxed myself into 1 ecosystem. I also would not have met a lot of great people if I adopted the “ I wouldn’t be seen dead with a (insert whatever console here) “ attitude.

Supposedly this isn’t even as bad as some people were expecting it to be…on another note I’m sure PlayStation is hoping this news is enough to shift the focus away from them dropping Physical…or will the gaming “collective conscious” not let it go that easily

@AdamNovice MSFT has to make money. Keeping people on indefinitely for studios that are not doesn't work. They’re not a charity.

I highly recommend Laura Fryer's video on the background of this situation. She touches on the issue of the 'freedom trap.' Her premise is that Xbox has given its acquired studios far too much creative freedom. My interpretation is that Xbox has been characterized by a kind of laissez-faire (ok, sure!)-leadership (widely considered the worst management style of all, even worse than destructive leadership). The result has been creative projects that appeal to few, if anyone. Large, drawn-out projects that cost a fortune but yield very little return on investment. There has been a bit of a 'daddy's money' mentality to it all.
In a clip featured in Fryer's video, then-Head of Xbox Game Studios Matt Booty can be heard saying that he wants to make as few changes as possible, and that the studios should remain exactly as they are. That message undeniably got through. The most recent output from Double Fine consisted of obscure niche games, such as a walking lighthouse in Keeper (great game though!) and the pottery game Kiln, titles that barely anyone has played.
Reportedly, Keeper needed to sell over 600,000 copies just to break even on development costs. It sold 19,000. The gap between financial necessity and actual results is striking. Almost shocking, even.
Sharma writes:
"Teams, studios, and functions often operate independently, and it became harder to work towards a shared goal, make the right tradeoffs, and get things done."

This is part of the core problem, and it explains how game projects like Everwild and Perfect Dark have been able to drag on for years without yielding any results. In other words, there is a need to clean house, streamline operations, establish clarity, and build a culture of accountability. What Sharma is doing now should have been done perhaps five years ago. She is clearly sharp.

I’m positive that the studios have been having tons of money, freedom (and a great time) and so on, but some studios obviously needed more direction and hands-on. And ultimately this is Microsoft’s fault. It didn’t go as planned, obviously. But at least they are transparent about it. Unlike some other mega corpos.

https://www.youtube.com/watch?v=2BZBoBAZGsc

It's a blessing that these studios are still able to stay open and operate away from Xbox.

I said it before and I'll say it again. Microsoft should've never bought Activision. All of these studios that they are shedding now are exactly what they needed, but after that purchase, the inevitable has happened and they have to get rid of most of them.

And once again the next PlayStation will completely crush the next Xbox.

@UnfishedPlate29 who is going to develop the games?

@RamboMike Absolutely that. Even I, who liked Phil Spencer and have even interacted with him, criticised that daddy attitude and the hands-off approach. I knew it was not going to work out with most of the studios.

@Bluemoon2008 I mean it’s great some studios are not getting shut down. But I don’t see how could be viewed as a win. A lot of people lost their jobs. But since we didn’t close these studios that’s a win?

@ThePlaystationStan I really don’t think Sony did anything wrong if talking about the physical thing. Here is the deal i think. Physical gaming is coming to an end I think Sony figured let’s go ahead and say no more physical starting in 2028. Xbox is gonna follow sooner or later. It’s gonna happen. I think Sony just wanted to get ahead so Xbox will look like they just try do what Sony does……except make great exclusives lol. I joke. Xbox did make great exclusives on OG and 360. Anyway Xbox will stop physical gaming as well. Only Nintendo will have type of physical gaming.

@Ninerguy1608 those studios were on the chopping block, the choices were a complete closure where they all lose their jobs, the company ceases to exist and all IP is archived and never touched again, or, this. Its a no brainer which is preferable. It's a win because the first option is arguably an easier and more cost efficient choice

My condolences to the 3200 people who got lay-off. I hope they stay strong and get a new job asap 🙏

The only thing that softens the blows is the fact 5 studios didn't get closed down with MS gave them freedom to go independent or sold to other publishers. For this, i must give kudos to MS 👍. They made a good decision, much better compare to what Sony did to straight killed Bluepoint, Pixelopus, Japan Studio, Firewalk, London Studio, Zipper, Evolution, etc.

@Banjo-

Yeah, I really liked/like Phil as well. I also think he got a lot of pressure from ”above” around certain things. Plus, he had to take over after the disaster that was the Xbox One launch.. But yeah, obviously ***** hasn’t worked out the way it should have. And they got too big, too fast.

I still hope they turn it around though. We need more competition. And I really think going the PC-route is the way forward for the living room. What Sony is doing is giving me more and more of a bad taste. PC is inherently more open source and open market. Several stores, much more freedom, cheaper games and a lot less locked down, and ”exclusive games” barely exist.

@Sunraku

What? You do realize Microsoft historically work towards enterprise right? A huge part of their business is enterprise. Your link shows nothing wrong, they have to to be able to compete with competitors. We/you may not like it, but AI isn’t going anywhere.

Is it bad though? No big dev is closed. No big and awaited project cancelled. Teams are being made smaller, but the division gets -20% .. and people behave like it was -50%.
I know it’s good to have some moment to stop talking about Sony doing their bad decisions, but when Sony will begin firing people at Bungie I am sure I will read lots of reasons that this is good here for obvious reasons

Sony ought to award Phil Spencer a medal for dismantling Microsoft's gaming business.

@Frmknst Halo?

Just saw a insane freaking stat
as of March 2026, Sony Interactive Entertainment Europe had 3100 employees

Xbox's layoffs are Equivalent to an sector of Playstation.

@ear__wig people were in denial about it. I’ve been saying it for years about subsidized gamepass.

This is the problem with propping up every studio with subsidized gamepass. Some of those studios being let go had games that would have not sold well at all in a normal setting. Not sustainable for Xbox to cripple itself.

@Sunraku Microsoft is one of the most important companies in the world. Xbox is their "little" gaming division, but it's not a charity. They evaluate the performance of Xbox separately, even separated from ABK. For instance, they explained that the profitability dropped to 3% (not counting ABK) because of these five studios bleeding the money made by the more successful studios and games. Not one year, but seven or more years, with Compulsion only releasing one game that flopped on Game Pass, Xbox, PS5 and Switch 2. Additionally, more details were shared yesterday:

Today, in some parts of the company, work passes through as many as 14 layers of management. Our platform teams are 40% larger than they were at the start of this generation, even as our player base and playtime have declined. That complexity has slowed decisions, blurred accountability, and made it harder to deliver for players.

Most of the layoffs are duplicated roles and, like, any other publisher, Xbox also got rid of studios that are not performing well. At least, they are not closing them but looking for buyers or letting them go with their IPs.

@Sunraku I post on all sites if I find the topic interesting.

Well at least they didnt take the easy way and just close the studios and be done with it. It at least saves jobs this way.

Some of it a result of AI?
Is this mean soulless games?
I would bet AI is the result of some of these and some of the previous layoffs.

I mean she was head of AI first.

What does she know about gaming.

@Titntin According to at least two sources now, it seems the staff of the 4 divested studios is already included in the 3,200 total. Likely why they are calling it "roles are being eliminated" and not just firings: they are roles that by the end of the fiscal year wont be part of the MS payroll.

@Titntin
Themightyant posted a quote from Jason Schreier earlier with one. I got to dig but the other was from Jez Corden in social media answering to the same question.

https://www.pushsquare.com/news/2026/07/i-know-this-is-painful-xbox-confirms-3200-job-losses-in-industry-bloodbath#comment9239083

Jason Schreier seems to have confirmed "1,600 jobs will be eliminated today, and then another 1,600 (including the studio divestments) in the next 12 months."

The industry has been heading for a crash in part for some time.

For the sake of the industry Microsoft and Sony need to come out with a statement that no new hardware for another 5 years. They need to slow things down focus on production costs reduction for themselves and game developers.

Sony had the chance again with PSVR 2 to open and stretch the market, it is a great piece of hardware. But their never was going to be enough take up to get interest from the big developers when the costs is simply beyond most folks reach. They should have absorbed the cost to get take up then developers would have had another source of income.

Anyway slowing everything down from the top helps consumers
In doing this it also takes some of the pressure off developers. Let them focus on maximizing the current ps5 and Xbox. Those developers who are pushing the envelope just keep making great games and using their skills to reduce development time.

Other than Rockstar and maybe one or two others no developers can release one game per hardware cycle. The development times are way too long which is cost, and they can not raise prices each year. We are so far into the current hardware cycles and it’s still taking years to develop a game. With knowledge of system thes development times should be plunging and the quality increasing. This does not appear to happening.

Game development running into millions and taking years…it killing the industry.

No other bussiness can run this way long term and stay in bussinesss unless bankrolled. The cash cow always needs its money back and it simply is not happening.

if i was id software, id buy myself out. I think they have the money to do it.

@Mr-Cage Current higher numbers are inevitable due to over-hiring in the COVID years. Look at Bungie head count: this is insanity! Aside from that, there would have been layoffs anyway, and anyone who worked on games knows that job security there is not and never was a thing. It is a hit-driven business, which is very unreliable.

But as I said: people spend more on games. Some companies get more money than ever before.