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As unfortunate as the latest round of Xbox layoffs were, we knew they were coming.
Microsoft may be, against all odds, riding a positive wave of PR – but it signalled its intent with its ongoing “reset” earlier in the year.
It started with the divestiture of several studios and 1,600 layoffs, but we were told there’d be a total of 3,200 redundancies by the end of the current fiscal year.
While my sympathies understandably go out to all those currently without work, the more interesting wrinkle for me is the restructuring, which has practically wiped out Xbox Game Studios as a publishing arm.
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As I understand it, the only studios that remain under this umbrella are The Coalition, inXile Entertainment, Halo Studios, Playground Games (which has merged with Turn 10), and Xbox Game Studios Publishing.
(The latter, as I understand, is more like Sony’s XDEV, so it’s more a business support unit as opposed to an actual development team.)
Rare and the depleted World’s Edge now exist under Activision; Obsidian has become part of Bethesda.
It’s worth adding that Halo Studios suffered many job losses, and development of Master Chief’s future forays will occur under Activision, so I’m not sure how long that team will continue to exist under Xbox Game Studios either.
So realistically, that leaves the division with three teams making games: The Coalition, inXile Entertainment, and Playground Games.
What do all three have in common? Well, they’ve all got imminent releases: Gears of War: E-Day is out in matter of days, on 6th October; Fable is coming on 23rd February; and Clockwork Revolution is launching at some point in 2027.
Two of those titles (Gears and Clockwork) are launching as Xbox console exclusives.
I can’t help but wonder whether these three remaining studios will also be folded into Bethesda, Activision, and/or Blizzard once their respective projects have shipped. I know The Coalition has already faced layoffs, despite its game not actually being out yet. (Although it has gone gold.)
I wonder what the seeming disbandment of Xbox Game Studios as a publishing arm means for Microsoft’s support of the PS5 moving forwards, because generally there’s been no change to Activision’s multiformat output since it was acquired – and Bethesda’s only really released the ill-fated Redfall and Starfield as console exclusives. (The latter of which is now available on the PS5.)
I don’t want to get too inside baseball on any of this stuff, but while they are both under the Microsoft umbrella, Activision and Bethesda continue to operate as independent publishers.
For example, we have different PR contacts for each company, similar to how it works with Ubisoft, SEGA, and all other multiformat publishers.
I know Xbox CEO Asha Sharma has spoken about the importance of exclusive games, and there’s nothing really stopping the company from releasing the next Elder Scrolls or Fallout as a console exclusive. (Although the bean counters may have questions about that.)
I just find it all intriguing organisationally; I’m fairly convinced Xbox Game Studios, as a publishing entity, won’t exist this time next year.
Does it really make a difference? Well, no – Activision and Bethesda are still ultimately Microsoft subsidiaries, so the money still funnels back to the same place.
But I do wonder why Microsoft has decided to structure things this way.
People have joked in the past that Activision actually acquired Xbox as part of that unprecedented $60 billion buyout, and optically it is starting to look that way.
Part of me wonders whether this is all corporate streamlining aimed at some kind of impending sale; the current Xbox management would never admit to that, of course, but there’s no doubt this reorganisation makes it a much leaner asset.
Ultimately, I’ll be fascinated to see where things go from here.
It’s a shame that so many have had to lose their jobs in the process, and I think those cheerleading for huge corporate acquisitions need to take a long, hard look in the mirror.
But it seems like the future of Microsoft’s first-party publishing will exist under the umbrella of the historically third-party Activision and Bethesda.
What will this all mean for the PS5? It’s all still a bit too early to say.