As we reported yesterday, Microsoft executed a new round of mass layoffs which has shaken a good number of departments from different regions. One of the most affected divisions has been Xbox. And among the 9,000 employees dismissed, we find important studies and cancellations in the company’s gaming division.
What happened. Phil Spencer, CEO of Microsoft Gaming, confirmed the cuts through An internal email where he explains that they seek to “position gaming for lasting success” and focus resources on “strategic growth areas.” The video game division had approximately 20,000 employees in January 2024, and these dismissals represent the fourth wave of mass cuts in the last 18 months.
The games that have been lost. Perfect Dark, the expected restart of the classic franchise that started in Nintendo 64, has been canceled after seven years of turbulent development. The Initiative, the study created specifically for this project in 2018 with veterans such as Darrell Gallagher, has definitely closed. The game had shown A promising trailer In the Xbox Games Showcase of 2024, although we did not know more about him again.
The enitiative closure marks a hard xbox stick, especially considering that they promised A new standard in industry with the development of its ‘quadruple to’. Perfect Dark thus remains without reboot, and is lost among the entire list of cancellations and studies closures of the firm.
Among other games is also Everwildthe ambitious Rare project announced in 2014, which has also been canceled after 11 years of development plagued with internal reset. This third-person game of the team responsible for Banjo-Kazooie and Sea of Thieves had disappeared from the radar after its presentation in 2019, and despite the fact that Phil Spencer himself highlighted him as the First Party of Xbox What’s most excited about everyonehe has not managed to survive the cuts.
Zenimax Online Studios has also canceled Project Blackbirdan unnoticed MMO that had been developing since 2018 and intended to be the successor of The Elder Scrolls Online. In addition, Blizzard has announced that Warcraft Rumble, his mobile game released in 2023, will stop receiving content new and will limit regular events and error corrections.
Affected studies and equipment. In addition to the definitive closure of The Initiative, other studies have suffered devastating cuts. Turn 10 StudiosForza Motorsport developer, has lost more than 70 employees, almost half of its template After the mixed criticisms received by his last game. King, head of Candy Crush, has eliminated 10% of its staff, about 200 people at their Stockholm headquarters.
The teams of Call of Duty haven’t fought either: Sledgehammer Games, Raven Software and High Moon Studios have suffered cuts. Halo Studios and Undead Labs, creators of State of Decay, have also seen their templates. Even the Xbox user research team, key to guaranteeing the quality of games and tools, has lost almost half of its staff.
As a consequence of the cancellations, Gregg Mayles, veteran director of Sea of Thieves and Banjo-Kazooie with more than 35 years in Rare, has abandoned the company. Matt Firor, Zenimax Chief online Studios, has also announced his march after the cancellation of Project Blackbird.
Between the lines. These cuts arrive after Microsoft spent $ 68.7 billion on Acquire Blizzard King Activision. The pressure to increase the profit margins is evident, especially when the company has eliminated more than 20,000 positions since it announced the acquisition. Matt Booty, Head of Xbox Game Studios, recognized in its internal statement that these decisions “reflect a broader effort to adjust priorities” in a “changing industrial panorama.”
The magnitude of layoffs is, at least, striking: while Microsoft reports record benefits, it has eliminated more than 15,000 employees only in 2025. Sources close to the environment Engadget They suggest that the company is trying to “replace as many positions as possible with AI agents”, adding a worrying dimension to these cuts. The tension between surviving teams is palpable, especially in studies such as Halo Studios where the work environment has been significantly deterioratedaccording to the same sources.
And now what. Microsoft maintains that it has More than 40 projects in development active and a “solid portfolio” by 2026. All games shown in the recent Xbox Showcase in June are “safe”, according to Fuentes del Medio Central Windowsincluding titles such as Clockwork Revolution and State of Decay 3. In addition, Phil Spencer will continue at the head of the division of Microsoft Gaming, denying rumors about its march. In addition, it should be noted that Xbox’s plans regarding next generation hardware also remain unchanged despite cuts.
Cover image | Xbox
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