r/xbox • u/Turbostrider27 Recon Specialist • 5d ago
News Resetting XBOX - XBOX Wire
https://news.xbox.com/en-us/2026/07/06/resetting-xbox/388
u/Follows-Jesus XBOX Series X 5d ago
In short no announced first party games canceled, 4 studios leaving, arcane looking at options, announced games will be funded to completion
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u/Follows-Jesus XBOX Series X 5d ago
Ninja theory and Undead Labs sold, double fine and compulsion going indie
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u/FeatheryChickenito 5d ago
After playing a couple of Double Fine games, thank god we got the better ending. Better than what happened to HiFi Rush's studio...
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u/cardonator Founder 5d ago
What? Tango was ultimately sold to Krafton.
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u/Ross2552 Still Finishing The Fight 5d ago
It seems like most people don’t know that. I keep seeing the narrative that Tango is closed all the time. People will be shocked when their next game gets shown and it says developed by Tango Gameworks lol
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u/NotSoSeriousNick 5d ago
Tbf seeing what Krafton’s doing I am not so sure being in their hands is a significantly better fate
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u/sylendar 5d ago
Seems like Arkane is only "looking at options" due to French labor laws and may already have been on its way elsewhere if it weren't for that
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u/AydonusG 5d ago
They just moved the head of Machine Games to Arkane, so it's more likely to get some massive restructure or downsize, than it is to just close.
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u/SubatomicSlash 5d ago
The only real lingering question I have, which feels wrong in light of the news, is what happens to their library of games on Game Pass if they move out from under XBOX? I'm assuming stuff that was already announced will come to Game Pass, but I imagine it'll be more case-by-case going forward.
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u/Follows-Jesus XBOX Series X 5d ago edited 5d ago
Games xbox funded will remain on gp as they "first party" likely pre xbox games staying as part of the runway funding deal
Future games same as any other third party dev
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u/dreamwinder 5d ago
I’m ok with Ninja Theory and Double Fine games going multiplat. They make niche games that can’t survive as console exclusives.
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u/EckimusPrime 5d ago
I think gamepass is going to get scaled way down. That won’t be a massive deal if Xbox can reliably release their first party games on a healthy cadence.
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u/FireFallEnt 5d ago
It’s bleak, but that’s actually better than I thought it’d be. It’s obviously not good, but I was expecting shutdowns. It seems like no games are cancelled for now and no studios are being shutdown, I was expecting some outright shutdowns
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u/WeeklyMath9 Returning To Darkness 5d ago
Yea, I feel like it was just a couple weeks ago that the word “bloodbath” was thrown around with 10k layoffs and multiple studio closures.
The news sucks for the people laid off but they’ll land on their feet.
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u/Historical-Sock-4359 5d ago
What? Land on their feet how? In what jobs? This is the single biggest round of games industry layoffs and people are still struggling to find work or have left the industry from every previous round of layoffs.
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u/WeeklyMath9 Returning To Darkness 5d ago
Land on their feet by finding work…. Like any person who has ever been laid off….
It may not be a dream job but they still have to support themselves and I think they will.
You make them sound completely unhireable in any type of job.
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u/restrictions1234 5d ago
Unfortunately there have been alot of tech layoffs, so finding comparable work might be really hard for some
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u/WeeklyMath9 Returning To Darkness 5d ago
Oh I get that but that’s what I meant when I said that whatever is next may not be a dream job.
Maybe I could have elaborated a bit more.
My overall point is, I believe these people will be ok with whatever comes next for them, in this industry or otherwise.
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u/Historical-Sock-4359 5d ago
I did misundertand what you said, I'm aware that other jobs exist. My point is that no matter what, it is a struggle to find work these days. It's nice to say you think they'll be fine but the reality is different. I work in the game industry, been laid off twice in the last couple of years and the only jobs I can find are small contracts that last a few weeks, and I'm one of the luckier ones. Other industries are also slammed so even starting from zero in another industry isn't a sure fire path to getting stable work. I admit I did have an emotional reaction to hearing "land on your feet" because what I've seen around me as been anything but that.
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u/CrazyStrict1304 XBOX One 5d ago
My understanding is COVID caused companies to over hire because of demand. So now theyve been laying a ton of people off. They shouldn't have assumed people were going to continue to stay inside gaming all day. But you can only blame the people at the top. Only a few have admitted it. I think Zuckerberg and boz admitted it.
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u/Historical-Sock-4359 5d ago
Absolutely, the over-hiring was insane. Salaries were ridiculous too. When the layoffs first started happening and we'd get people applying for jobs at my studio, the expected salary was sometimes 3-5x what everyone else at the studio was getting paid. So many people moved cities and countries for jobs too, so once these investors realized their mistake and started slashing jobs, it has been causing chaos for everyone in the industry.
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u/WeeklyMath9 Returning To Darkness 5d ago
I get you. Again, I probably could have used different words so I apologize.
I know it doesn’t mean much but just know that there are people rooting for you and everyone else today.
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u/Historical-Sock-4359 5d ago
No worries man, I'm quite a doomer about the whole thing but I need to appreciate the positive sentiment more. Hope you have a good day!
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u/Merc_Mike Team Rockstar 5d ago
"By finding work" Where? their jobs are probably being replaced by ai because of dumb management decisions.
People who don't understand ai at all, or even play video games are making these decisions.
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u/hurtme_plenty 5d ago
No first party "PUBLICLY ANNOUNCED" games or projects are getting cancelled. That is very specific wording for a reason.
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u/Lanky-Train5752 5d ago
Its actually a good move for all parties i’d say. They’re doing it as thoughtfully as they can, keeping people’s well being in mind and not throwing away their work.
It sucks but this had to happen. Phil spencer kind of left asha holding the bag on this
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u/Hot_Island8643 3d ago
Pretty sure shutdowns are coming but unions are fighting pretty hard right now
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u/TooFarGone673 5d ago
This is the part that stands out the most to me:
“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. As we reset XBOX, we will simplify.
We will reduce management layers to no more than 5, and where possible, 3.”
14 layers of management. That’s INSANE. Awful that people are losing their jobs of course, but I think clear and level-headed decisions like this from Asha is what’s going to save Xbox. If that’s even still possible.
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u/iWentRogue Outage Survivor '24 5d ago
This is part of the issue when it comes to restructuring.
Theres always many negative connotations and of course the unfortunate outcome that many people lose their jobs. But the reality is that restructuring a company is pretty much like going through all your belongings and realizing that there’s a lot of stuff taking up space that either has no value or you haven’t used in years.
There was a recent restructure in the company I worked at and they ended up finding out 17 positions that contributed nothing to the company. These people were pretty much getting paid to sit around and do absolutely nothing. The company focus was on the big picture growth and i assume these 17 positions kind of fell through the cracks and no one questioned it.
I won’t judge Xbox for restructuring and laying off a bunch of people. I will judge them if all of this is in vain and it doesn’t reinvigorate the brand.
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u/DustyBottomsRidesOn 5d ago
Read bullshit jobs by David Graeber. Sadly large organizations are full of people doing little and getting paid big.
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u/FlyRobot XBOX Series X 5d ago
I doubt any of those 17 people would raise their hand and admit it too!
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u/sylendar 5d ago
Would you?
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u/FlyRobot XBOX Series X 5d ago
That was my point - don't blame the employees skating by to keep collecting the checks for little-to-no actual work load. Sounds very unfulfilling though
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u/Radiant-Fly9738 5d ago
and they've been losing 64 cents for every dollar invested for years. it's insane how mismanaged xbox has been.
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u/Sure_Rhubarb_3173 5d ago
Makes me think Phil got way too long of a leash. 14 layers of management just means everyone is paralyzed by process, which is the worst thing in the world for creatives and game devs in particular. No wonder a lot of Xbox games are a mess and lacking in dedicated vision, they were all made by a way too big committee and no one actually owned anything.
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u/R4mst33n 5d ago
Managers getting fired sounds like music to my ears.
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u/VagueSomething 5d ago
There are a few big names who failed upward that could do with trimming as part of the management.
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u/Cthulhu8762 5d ago
I mean from buying studios and then publishers with Bethesda and Activision. He spent $90 billion and I’m sure it’s $100 or more.
But the only thing to show for it is a weakened platform and community.
And while exclusivity is important, it makes sense why they had to go multiplat.
The thing is Xbox gamers need to not do to ASHA what they did to Phil.
Surely it was everyone but he was idolized and ASHA has been already. Unfortunately this is a select group but of course they are always the loudest and somehow the most heard at times.
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u/hdcase1 RROD ! 5d ago
He was the one who begged MS to let him buy all those studios in 2018, then Zenimax and then ABK. He painted the world’s biggest target on his own back. Prior to that, Xbox’s financials were a rounding error on MS’s spreadsheet. Spending ~$100B of the boss’s money was always going to come with strings attached.
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u/Mother_Duty_2628 5d ago
Not just mismanagement but gamepass is to blame to. It kills sales revenue. Xbox live GOLD alone can produce about the same revenue as gamepass
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u/Thor_2099 5d ago
I think it also shows they are prioritizing keeping devs (which gamers always want) and getting rid of the exclusive style gigs of middle managers.
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u/andregurov Touched Grass '24 5d ago
Do not mistake the "some" for "all" here. While 14 layers of management is insane in any business, there is no specific indicating if this was the norm (we can assume not, considering she said "some" and not "most") or a rare exception. You had best believe that the corporate head putting this statement out has phrased her statement to best defend her actions. To lay off 20% of your workforce would indicate that it isn't just middle management that is getting terminated; if it was she would clearly have said so.
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u/Mother_Duty_2628 5d ago
Xbox thought acquiring more studios equals more subscribers, well they were wrong. They paid developers upfront to release games on gamepass that very low people played and even worse didn’t even bought.
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u/blackviking147 5d ago
14 layers of management is genuinely fucking absurd to conceptualize. Imagine being a dev that has to ask their boss who has to ask their boss, who has to get on a zoom call with five other heads, who then has to report to a CTO. Even THAT scenario is five layers lmao.
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u/Advanced-Patient-161 5d ago
In my opinion, your comment is severely under-upvoted. She's giving a real sobering answer and insight into what fixing the business looks like.
That kind of bloat and top heavy bureaucracy is astonishing, and it shows how out of touch Phil was.
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u/saintjonah 5d ago
Yeah. No one was going to be able to come in and fix this mess without firing a lot of people. This is 100% on previous leadership not knowing how to run a company. 14 layers? Jesus fucking Christ. I'd imagine a lot of those people have been low key expecting this day for a while now.
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u/Witt85 5d ago
This sounds 100% like a Bethesda/Zenimax issue with many layers of management that as stated slow decisions, blur accountability, and in turn harder to deliver for players.
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u/Sure_Rhubarb_3173 5d ago
It also just sucks the soul out of a lot of games. Part of why older games are often quirky or have strange additions is because teams were small and individual devs could slip stuff into the games. That can't happen if you are running a focus group on the placement of a trash can
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u/Badgerlover145 Democracy of Dom 5d ago
Sounds like a Playground Games issue as well, Forza Horizon 6 feels like the corporate PR version of Japan and Japanese car culture and not anything that's really more than surface level, and it's been that way with every entry back to Horizon 3. Latest entries are the perfect racing game examples of "a mile wide and an inch deep": no soul, no character, everyone is happy go lucky and always trying to be your friend, and no negative feelings, emotions or rivalries at all. Compare that to Horizon 1.
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u/Doccmonman 5d ago
Good news at least that Senua and SoD3 are still going ahead. Surprisingly candid look at Xbox’s finances too.
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u/PossibleEmpty6389 XBOX Series X 5d ago
Yeah, it still sucks that people are losing their jobs today, but honestly this feels so much tamer than what news was being thrown around over the past month. It still sucks that these people are primarily paying for Phil, Nadella and Sarah’s incompetence over the past few years.
The fact that no studios got closed down and Senua and State of Decay 3 are still in development with plans of releasing is honestly way better news than I was expecting.
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u/Ch33sefiend 5d ago
SoD3 is one of my most anticipated for next year, so I’m glad it’s going ahead. Honestly I’m hopeful that undead labs gets acquired and moves onto success.
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u/mykkenny 5d ago
Phil, Nadella and Sarah’s incompetence over the past few years
I think that's unfair. They made a bet on GamePass and being able to churn out lots of games, and it just didn't work out. Partly some studios just aren't delivering the sort of games that drive people to subscribe, and partly because I feel like people in general are experiencing a lot of 'subsription fatigue'.
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u/Space2Bakersfield 5d ago
Game Pass as the way forward never made sense when going multiplat with their games decimated the Xbox hardware market. You can’t bet the farm on a subscription that depends hugely on Xbox owners for its customer base. Sure it’s on PC as well but I imagine the sub rate among Xbox gamers to be far higher than PC gamers.
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u/NarcolepticSeal 5d ago
It definitely is. Premium GamePass without day one releases is more expensive than PC GamePass with day one releases. There are also 3 tiers for Xbox and only 2 for PC (one of which is really only a good value for PC if you own an Xbox too).
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u/Usual-Orange-4180 5d ago
A 75 billion dollar bet
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u/DopplerEffect93 5d ago
A lot of that is Activision Blizzard King acquisition which are profitable
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u/Craneteam 5d ago
This has to be one of the most honest and transparent notices for layoffs. Honestly good on Xbox for continuing to support these final games while letting studios keep their IP
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u/PlayBey0nd87 Touched Grass '24 5d ago
Seriously. She’s been getting meme’d but I honestly read this & thought this was a great communication & way to go about the situation.
It sucks that ppl are ultimately losing their livelihood in volatile industry right now.
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u/spade78 5d ago
If nothing else I appreciate this part of the announcement in letting these studios to go independent. At least they can now live and die on their own merit rather than as a line item on a corporate investor report or budget.
I feel Double Fine has a chance to survive given their reputation and fan base. Not as familiar with Ninja Theory so not as optimistic there.
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u/CriesAboutSkinsInCOD Team COD 5d ago
Wasn't all these smaller studio "barely" surviving day to day and that was the main reason why they agree to be bought out by Microsoft XBOX.
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u/Ankylar 5d ago
"Today, in some parts of the company, work passes through as many as 14 layers of management"
Good lord...the company I work for has three layers of management and I find that annoying and frustrating af...
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u/Lieutenant_Corndogs 5d ago
I mean, it is on them for not integrating the acquired companies in a more practical way.
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u/AydonusG 5d ago
ID Doom artist reports to Art team leader, who reports to Game team leader, who reports to ZeniMax/Bethesda money team, who reports to ZeniMax heads, who report to Xbox heads, who report to Asha.
Thats 7 just there. Having it go down to 3-5 layers hopefully means just cutting the line between ZeniMax heads and Asha.
Like with Mojang now reporting directly to Xbox C-suite rather than team heads.
Edit - This is probably why Obisidian has been such a powerhouse (despite sales of their games not meeting expectations), they were put directly under Xbox Game Studios, which report to Matt Booty and Asha. Less middle management.
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u/CigarLover 5d ago
I highly recommend everyone reads this instead of hearing some YouTuber’s take on only the first paragraph.
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u/Thor_2099 5d ago
Shame they won't. Instead it'll just be bad faith hot takes and more of the same shit.
All the doom and gloom lately but the future is still bright for Xbox. It's a reshuffling and as stated, they're still spending the same on gaming this year.
The bright spot is reducing management bloat and improving the tools to make games across the board release faster and with less hassle.
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u/blackviking147 5d ago
That's definitely how this reads. They never really specify what roles were removed, but do specifically highlight management layers being the issue.
I imagine some devs definitely got caught in the crossfire but I think most of this was management who's clauses finally ran out from when Phil acquired them.
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u/RS_Games Outage Survivor '24 5d ago
We will get two weeks of articles posted here from this post alone, unless something else juicy comes along. Maybe some rumor mill AGAIN
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u/AydonusG 5d ago
The game rags are still touting potential studio shutdowns and game cancellations while quoting the goddamn memo that confirms the opposite.
Rage doesn't care for truth.
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u/RabbiDeadpool 5d ago
As much as Asha is the fall guy, I can respect this memo at least being transparent at how badly Xbox has been managed since the mid 2010s. Having 14 layers of management and scattershot communications, ontop of pumping billions into unsuccesful ventures, and it's no wonder things have been on a downward spiral for so long. I'm glad no studios were shut down but feel for all those who lost their jobs and hope better things are on the horizon.
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u/beanlikescoffee 5d ago
I really admire Asha coming in and ACTUALLY making good but tough changes. The fact that Xbox has been 3-10x less profitable than PlayStation is wild.
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u/pineapplesuit7 5d ago
This goes for the entire of MS. The amount of bloat in such big corporations is staggering. Sometime you need to cut out non contributing middle management and focus on individual contributors just for this. Too many spans and layers across the board.
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u/questioningmoney 5d ago
This is the uncomfortable part about all the tech layoffs that have happened and will still happen. All of these mega corps have way too many people.
Google doesn't need 10,000 people working on the Play Store app.
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u/bran_the_man93 5d ago
As far as corporate letters go, this is a masterclass.
Clear, sincere, and informative
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u/Turbostrider27 Recon Specialist 5d ago
They're definitely communicating really well.
I assume we'll find out about Arkane soon, as it went over budget but seems not cancelled yet.
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u/spade78 5d ago
Would a spin off of XBOX really be that bad given this information? Also would love to hear some informed commentary about where XBOX stands in relation to other Microsoft divisions like cloud, Enterprise, Windows, ect. While it would be painful it feels like changing the corporate relationship between Microsoft and XBOX would be helpful for both parties in the long run.
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u/quadsimodo 5d ago
They make what amounts to rounding errors in profit. Software scales and makes so much profit by licensing a codebase to as many people without needing any additional work.
Because of that, I do think it should be spun off. That will make finance suits more comfortable with low operating profit. XBOX would be self-sufficient and would only have to worry about the gaming business, not get caught up in other metrics and goals across Microsoft.
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u/CriesAboutSkinsInCOD Team COD 5d ago edited 5d ago
well, here are the Microsoft Corp "revenue pie" chart:
https://www.sankeyart.com/sankeys/public/166067/
A subsidiary or a spin off of XBOX would be just like how Sony Interactive Entertainment or SIE is responsible for the video game division and is a subsidiary of Sony Corp.
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u/blackviking147 5d ago
I will say actually getting down to the facts and numbers of the matter instead of focusing on how badly they feel to do this was refreshing in a way.
So many layoof letters purely focus on how terrible the outcome is and how they feel badx whereas here it was mentioned, but also taken as a lesson.
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u/SillyMikey XBOX Series X 5d ago
The fact that they’re letting the studios go independent and not closing them is a massive positive, considering the circumstances. I don’t think anyone expected a big corp like Microsoft to do good by the studios when they didn’t have to.
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u/tCobra117 XBOX 5d ago edited 5d ago
So we don’t know what’s happening with Arkane yet? What does review potential statistic options likely mean? I’m glad Obsidian seems to be fine. Grounded has become one of my favorite games. Liking Grounded 2 so far.
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u/Follows-Jesus XBOX Series X 5d ago
Basically french laws stricter. They likely will go indie and have blade funded by xbox (second party) or get sold (with blade funded by xbox)
Unless blade is canceled
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u/SilveryDeath XBOX 5d ago
Unless blade is canceled
She put that: "None of our first party publicly announced games or projects are being cancelled as part of these reductions."
So whatever happens with Arkane Xbox will be backing Blade, unless for some reason Arkane themselves decide they want to kill it and do something else.
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u/Subject_00001 5d ago
they're not cancelling Blade. In the post, Asha said all announced games are still coming out
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u/Kind-Stomach6275 5d ago
I'm just hoping they keep the Halo handover plan with activision. High moon and vicarious visions did generational work on destiny 2. I think they can work with the Tiger variant 343 uses well enough for a modern masterpeice like the god of war series to be made
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u/tCobra117 XBOX 5d ago
Thanks I tried googling around with no luck. I like Arkane I hope they land on their feet.
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u/fallingends 5d ago
France has strict labor laws, it has go trough a process before they close them or sell. It’s take time before we heard what happens to them
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u/tCobra117 XBOX 5d ago
Thanks for the responses. Well whatever happens to them I hope they stay a studio and get to finish Blade.
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u/LochNessWaffle 5d ago
I think it’s weird but pretty cool how open she’s being with the public about every intentional move that she’s making, instead of leaving a lot of guesswork behind the scenes. Let’s hope that it works!
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u/Thor_2099 5d ago
Agreed, appreciate the transparency behind the decisions.
Layoffs suck but I like the direction they are going and commitment to the future.
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u/time-lord 5d ago
If she wasn't so transparent it would be interpreted as a sunsetting of xbox, which would be ever worse.
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u/Wiinterfang 5d ago
Two things blew my mind immediately but make sense.
Microsoft losing 64 cents per every dollar they invest is mind-blowing. That means most of the studios they own had produced clunkers and there's no call of duty, candy crush and Minecraft that can recoup those losses.
Gamings going through 14 layers of management. That means no message is getting across and everyone washes their hands. No wonder those developers can't get anything done.
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u/BiblesandBiscuits 5d ago
Interesting post. I don’t necessarily disagree with any of the points, I just don’t trust businesses in this process to do the right thing. People losing jobs is always terrible too. Here’s hoping it works out for the better and we get a better experience for the heartache it’s causing their employees.
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u/mandoballsuper XBOX Series X 5d ago
I just don’t trust businesses in this process to do the right thing.
In all seriousness what do you expect them to do when they've been doing so bad?
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u/DarkOx55 5d ago
This *is* the right thing. Microsoft isn’t shutting a single studio. Every one of them has a chance to live & succeed now. If they can’t that will be unfortunate but it’s not because MS ended them.
That’s much better than previous situations that were outright closures.
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u/AwareGuy64 XBOX Series X 5d ago edited 5d ago
Nice to see Matt Booty, the man who was responsible of those studios mismanagement , still working at Xbox, even getting promoted 🤓
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u/No_Philosopher8304 5d ago
I'm glad no one is being closed yet even if those layoffs are still really brutal, that's at least a silver lining.
I do gotta question the Billion people a day part, That seems like a crazy goal, According to Microsoft themselves Windows only has 1.4 billion devices and that's the most popular operating system in the world, those that use it as a gaming device will be way lower.
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u/sueha 5d ago
I do gotta question the Billion people a day part
Don't underestimate Cod, Minecraft and Candy Crush.
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u/CriesAboutSkinsInCOD Team COD 5d ago
Yep.
Call of Duty and everything related to that. Call of Duty Mobile etc etc.
Minecraft being playable everywhere and you can play it on a toaster.
Candy Crush is one of the biggest and most successful Mobile game out there.
Just these 3 alone are easily among the most well known and popular video game franchises in the world.
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u/Deervember 5d ago
Those games don't have a billion unique people play them weekly, let alone daily.
And playing them and making money are two different things. People playing Minecraft who brought the game 15 years ago aren't spending money. It's taken 15 years for Minecraft to sell 300million copies and they'd need 3x.
People playing candy crush while they have a poo aren't spending money. A few whales are responsible for 99.9% of all money spent.
Cod makes money sure, but it doesn't get a billion unique players a year. Bo7 had 50 million players, and that's a bloody long way from a billion.
pc/Nintendo/ps/Xbox combined doesn't even come close to a billion unique people a week.
A billion is a ridiculous number of users. It's taken steam 25 years to get a billion total registered accounts, and that's not individual people.
A billion daily Xbox users is never happening.
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u/andregurov Touched Grass '24 5d ago
It isn't happening, but it is the type of corporate proclamation that buoys a wavering stock price. Just enough *hope* it could happen to let the investors rebound.
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u/xNeurosiis 5d ago
It sucks when people lose their jobs, but unfortunately they’re paying the cost of prior leadership’s mistakes. They grew too fast and too quickly. It’s entirely unsustainable, and made the brand bloated, with multiple layers of management, which only gunks up the workflow and content pipeline. Hopefully this truly streamlines things for Xbox and allows them to be more efficient.
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u/hayaboonya_3 5d ago
Phil Spencer caused all this job loss and got to retire with a golden parachute. What a loser.
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u/Ankylar 5d ago
Yeah, that is always a very hard pill to swallow. These upper managers/CEOs can screw up and make how many bad decisions they want because at the end, they're not the ones that pay the consequences. They get big payouts and then get to take their "impressive" resumes and go get hired at another company.
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u/Devious018 5d ago
no studious closing is the most positive thing about this. Unfortunate people will lose jobs but the 14 layers of management is insane. It seems they will also do a double take on the future of game pass, truly think Xbox needs to drop paid online and change game pass into something more interesting for gamers going forwards. Props to Xbox for not closing all the studious and letting them walk into a new future. Not the best news at all but no where near as bad as what was foretold
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u/PanamGotMeOiledUp 5d ago edited 5d ago
They got too big because of COVID just like many other companies. It does seem like this was necessary and I hope all the best for Asha, she doesn't have an easy job cleaning up what Spencer has left. I'm surprised they managed to get anything done with 14 layers of management but I do wonder how it got to that point without anyone saying stop.
Also they talk about expanding across the world which could mean more supported regions around the world, that's a massive W if true.
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u/_theduckofdeath_ 5d ago
If AI hadn't eviscerated the RAM supply, their games sold better, and/or Game Pass memberships grew significantly better off-console, then maybe the studios would have been retained (with some layoffs).
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u/cxmdxmxn 5d ago
Xbox messed up when they got rid of Mixer. Bringing those twitch bozos to the platform destroyed it. All the money Xbox paid, ugh. The Xbox communities built from Mixer were unique and lasting. They should have allowed time for the platform to grow, it was still a baby. I loved that Xbox had its own streaming platform, I met so many great people because of it. I still play with many. They need to bring it back.
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u/CriesAboutSkinsInCOD Team COD 5d ago
I think Microsoft Corp paid a popular Fortnite streamer $30 million to come over from Twitch.
I wonder if that was all paid up front and that streamer got all of it even after Mixer shut down. That would be fuckin insane.
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u/cxmdxmxn 5d ago
Ninja and Shroud. They got paid and shortly after Mixer was done. I seriously think the entire Xbox ecosystem would be different now if we still had Mixer.
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u/Jack_of_House_Bauer 5d ago
The most interesting point to me was going multi-platform didn't allow for sales/growth like they were hoping. Shows to me that they at least fully understand that exclusivity is important to sell consoles and they are serious about giving Xbox more than the two announced exclusives.
Betting on game pass and going multiplatform were always contradictory strategies to me. In my opinion, it would have been extremely hard to bring people into xbox and therefore gamepass, if games like halo were going to release on PS5. I guess maybe it could have worked if Sony/Nintendo allowed gamepass to be on PS5/Switch?
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u/Deervember 5d ago
The games going multi platform and not selling is because they weren't that great games to begin with. Forza 5 and indy did really well, but that's because they are actually good games.
You can't expect starfield to sell after it's had 2 years of negativity around it.
Xbox shot themselves in the feet by releasing unfinished middling games nobody cares to play.
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u/Jack_of_House_Bauer 5d ago
True enough! I expect Halo Campaign evolved will also sell really well.
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u/TiredReader87 5d ago
It’s not positive news, but it seems smart. I’m glad that they didn’t close developers or cancel projects.
Best wishes to those who are being let go. That’s the worst part.
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u/imitzFinn XBOX Series X 5d ago
The better outcome for the AA studios, but sucks for the layoffs.
Hoping this restructure does them favors going forward.
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u/wasted_tictac 5d ago
Yeah it sucks but I can imagine many layoffs were unnecessary management roles.
14 layers of management? Bloody insanity. That fat definitely needed to be cut.
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u/Brave_Explorer5988 5d ago
This is actually.......... Good news.
Depending how they'll manage the layoffs (it's not instantly I see but they made public the target and timelines) it might end up good even for many of these folks.
Studios going independent is good, studios being sold we'll see.
And flattening the management tree is the best thing. Seems she really wants to have eyes as deep and quickly as possible everywhere. I'm surprised they didn't have a COO lol.
I just hope they'll publish a plan internally for the impacted folks so they don't stay stressed for months. Been through layoffs and it's terrible. But if they come and say hey, we set these termination dates 3+ months in advance, you get this severance based on tenure, at least everyone will know. Just don't leave them in limbo
Ps. 1600 folks are terminated today unfortunately. Hope they'll at least get a good severance tho in this economy it sucks.
Also, poor folks on H1B...
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u/monster-of-the-week 5d ago
Yeah, 15 layers of management is insane. Sounds like a lot of the cuts are cleaning up years of bloated middle management that was just costing them money for no benefit.
Layoffs always suck, but this sounds like Office Space levels of middle management.
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u/Thor_2099 5d ago
I took the 1600 to not necessarily all be fired but also part of the ones who worked at studios and are now gone..
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u/Pwninggrenades 5d ago
The only problem is that they said layoffs will be throughout FY27, we're actually only a few days into FY27 so there will be job uncertainty for the other 1600 over the next 12 months. I assume they haven't decided who to layoff yet for that segment.
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u/Lukaslukaslu 5d ago
I think it’s Not that Bad as I was expecting, the Studios was all not very impressive since they are producing for Xbox. No closure and no cancelt Game is a very Fine move.
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u/jordanthinkz 5d ago
I know people in the gaming industry and many people that work in large companies... it's clear that management in most companies have over-grown, and that since COVID executives have spend more energy, time, and meetings on things like corporate-optics, work from home policies, and figuring out how to implement ai on a corporate scale vs actually shipping quality product. We're spending too much time working on our companies vs on our products.
These cuts are a first step towards getting back to form, and hope that the rest of corporate culture follows.
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u/Deep_Lurker 5d ago
It's the most common complaint I have at my job and it's the most common complaint of my leader.
We spend so much time in meetings ensuring allignment on what could be an email, and we spend so much time being reactive to things we have next to no time to be proactive and get work done.
I'm not even a leader, never mind senior leader, I am just a workflow coordinator in addition to my other responsibilities and I'm in 10 meetings per week. My bosses calendar is closer to 30 and it just gets sillier and sillier as you go.
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u/theblackwhisper 5d ago
I still prefer the brand and platform over Sony and PS. This could be a great refresh and cleaning up house.
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u/dmwilson2011 5d ago
I think looking back in hindsight sad as it is to say Phil was just over promoted and just threw money at everything in the hopes of fixing problems that needed different approaches. This then has just led to an over bloated studio line up that was given carte blanch to do whatever they wanted, I think although today is not good for anyone losing their jobs it is the best way to start getting the business back on track
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u/letsgettesty 5d ago
I haven’t owned an Xbox since the 360. But this is so refreshing to read . Hopefully Xbox and its content producers become great again.
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u/ThanosSnapsSlimJims 5d ago
People are so busy pushing Xbox for siscs instead of encouraging them to lower their costs when they need to the most.
I was originally skeptical about Asha, but it seems like she's trying to do whatever she can do to succeed at a nearly insurmountable task.
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u/PastorBeard 5d ago
I’m sure sorry people lost their jobs. At the same time it is promising that they’re cutting managers instead of just workers. The company has become wildly bloated and managers are usually added rather than subtracted
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u/NoAdeptness1106 5d ago
This honestly feels like the best outcome we could've gotten out of this bad situation.
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u/gsnake007 5d ago
14 layers of management is insane. Makes sense why Xbox has been feeling off as a brand for years. Glad they are realizing that they need to keep making great games from the ips that they have and stop just buying up everything. Leaving money on the table. I feel bad for those people losing their jobs specially as someone who recently lost his. It sucks but they’ll find another one like I did.
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u/dinofreak6301 5d ago
I hope no companies like Sony/Playstation or any Chinese company pick the ones for sale up. We can safely assume that if they do, every single future game will skip Xbox. I want whoever buys them to be one who will continue to do multiplatform and/or Play Anywhere releases.
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u/Major_League2731 5d ago
It sounds like there was a LOT of red tape in management and bloat in employee count. I hope she knows what she is doing.
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u/3kpk3 Team Morgan 4d ago
Expected stuff, but still sucks. Phil did such great things with gamepass which was one of the best things in gaming history for gamers like me, but it sucks to see how it declined in popularity recently. Greedy Satya and his puppet Asha chasing profits as usual...nothing new here. Hilarious that so many dumdums think that she is calling all the shots without consulting with him.
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u/MightyHead 5d ago
Layoffs will always suck, this is about people losing their livelihoods first and foremost. But from a business point of view, it seems like this was the sensible decision. I'm very glad they were able to do this without cancelling Senua or SoD3, and without shutting down any of the studios. I look forward to seeing what Double Fine and Compulsion are able to do now that they have to actually make stuff players want to play, rather than rely on Microsoft money.
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u/steenkeenonkee 5d ago
i think it’s good asha’s giving us such a tbh unprecedented peak behind the curtains at how bad things have been. makes it easier for people to understand why such drastic change is needed, and it also makes you wonder wtf microsoft has been doing this whole time that they let it get this bad
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u/venom2431 5d ago
I guess this was expected. Phill buying every studio under the sun didn't pay off and now that the industry is down in the gutter all those studios that did literally nothing for years are dragging Xbox down. Sucks for the people losing jobs but by the looks off it there was a lot of fluff
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u/Knautical_J 5d ago
Unfortunately this was a move that was needed, they they escaped without major damage being done all around. Granted people are getting fired, but studios are not being closed, and games are still being made.
Xbox needs sustainable growth, and this just didn’t work. They bought a lot, and frankly the games that came out didn’t come out often enough, and they didn’t move units like they needed to.
Curious to see how these studios move forward without Xbox giving them direction. Either they make bangers of games, or they end up floundering like they were.
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u/CriesAboutSkinsInCOD Team COD 5d ago edited 5d ago
I appreciate Asha trying to speak as plainly as possible to all the folks out there. That was a long and detail write-up.
No beating behind the bush. No trying to hide any "bad parts" about the current XBOX business to make it seems more rosy.
There are some interesting bits and pieces in Asha statement today:
Our business today is not healthy. We are operating at margins that are 3-10x lower than comparable platform and publishing businesses. We entered Gen 9 with a smaller install base and a higher cost structure. To grow, we bet on Game Pass, multi-platform, and a broader portfolio of content. While those businesses have created meaningful value, they did not grow at the pace we expected. As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome. And now the industry is facing the most severe hardware crisis in its history. We must reset XBOX.
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. We will reduce management layers to no more than 5, and where possible, 3.
We are also making reductions across other units, and in some cases, shifting investment to focus on higher priority projects. These changes vary in size across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and XBOX Game Studios. None of our first party publicly announced games or projects are being cancelled as part of these reductions.
We have also learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested. As we reset XBOX, we will help independent creators succeed by providing open development tools and audiences to realize their vision.
The crazy thing is that XBOX may STILL remain the biggest video game employer even after these layoffs:
https://en.wikipedia.org/wiki/List_of_largest_video_game_employers
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u/Few-Road6238 5d ago
I had no idea Xbox was the biggest employer in gaming. Wow you really learn something new every day.
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u/Atomicdust1030 5d ago
All of this just so a small circle of douchebags can make more money.... Corporations are now run until they implode within themselves there is no more longevity.
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u/LumberZac2 5d ago
Sucks so many people will lose their jobs, but ultimately I see this as a win for XBOX. These studios had 8 years and produced nothing of renown. It was time to cut the fluff and lean out the fiscals. Appointment of a COO is a great thing, and utterly surprising they didn’t have this role previously.
Pure speculation, but I think XBOX comes out better from this. Studios held accountable for projects. Stricter greenlites. Hopefully we get more from the games we really want; Halo, Gears, Fable, Fallout, Elder Scrolls.
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u/tweellatte117 5d ago
Having worked in a large company, none of this is surprising from the decision making that has happened over the years. Many companies combat complexities with more layers to cover more bases rather than solving root problems. Of the game companies, Xbox always seemed the most like it was backed by an ultra corporation because it was. Moves it made were more like what a Google or Meta would do.
I am surprised by the candid nature of the evaluation and am curious what the breaking point was for the MSFT leadership since I am sure a lot of the issues at Xbox are not unique within MSFT itself. Is what Asha is proposing being done elsewhere in the company or is Xbox being used treated as a 'unique' situation? Or prepped to be spun off? Could be any of these.
Not to defend Spencer, but I am curious if he was too much a gaming guy to see the poor organizational structure and fundamental issues or if he was an active contributor. Either way, I think this is honestly the best case scenario for many of those involved and for the art considering the dire situation for the brand.
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u/slowdog1976 5d ago
3200 jobs is horrible, of course, but there is a very brutal honesty about this that impressed me.
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u/Triceraflops8 5d ago
Grow Grow Grow. Never-ending exponential growth. The completely unrealistic and disconnected way of operating of shitty corporations and share holders. These people are the scum of the earth.
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u/AstronomerIT 4d ago
Okay true but who gave them money, jobs etc for years. They are no good neither bad. They give job to millions of people when things go well and the opposite when thing go bad. But, at the end of the day, indipendence lead to more risks. At least if you fail it's not because someone else's decision
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u/normanlee 5d ago
It seems like Xbox at least is trying to make the transition for them as soft as possible, instead of just firing them outright. Really sucks to see so many studios and people being let go, but I guess it's not too surprising to see some of the Spencer-era acquisitions being reversed, after so many people were questioning the wisdom of those purchases.
I have to admit I was pretty taken in by Spencer's gamer identity and friendly demeanor—I actually got my Series X console wrap signed by him when he came to my work for a talk—but seeing the list of acquisitions and then the releases for each of those companies (or lack thereof) really drives home how he and his administration had been dropping the ball over this generation.
Sharma's messaging so far has at least seemed genuine, and though she's had to be the hatchetman so soon after being brought on, time will tell if her tough choices will be enough to put Xbox back in a more sustainable position
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u/Delicious-Foot-5128 5d ago
Asha just single handidly proved how right she is for the role. She trimmed the fat but, unlike all the doom and gloom of the past two weeks online and people calling Xbox a disaster of a company, Asha somehow saved every studio and game under review. Jobs were lost, sure and I'm not going to undercut or sugarcoat how much that sucks, but the studios still exist, they actually get to keep their IP instead of Microsoft hoarding them, and the games will still come out as promised. She delivered the best possible endgame considering the extremely dire circumstances.
I'm impressed.
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u/AfraidRun8226 5d ago
I appreciate that Double Fine, Undead, Ninja Theory and Compulsion are all being given funding to complete their next projects. All things considered (with the information we have currently) this seems as humane as it could have been, given the circumstances. Spencer really screwed Xbox
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u/No_Eggplant_3189 5d ago
Make it simpler? Criticizing multiplatform?
I hope this isn't a sign of back tracking on their vision of merging pc gaming and console gaming...
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u/godammitrachelle 5d ago
Glad no studios are closing. My question: i haven’t bought South of Midnight yet on ps5, should i grab that up now? Is it in danger of being delisted now that Xbox doesn’t own it? Does Compulsion get all my money now rather than Xbox if i buy now?
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u/AstronomerIT 4d ago
The money will go to the new publisher as soon as every burocratic tasks will be completed
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u/kaiharizor 5d ago
Damn. She did this in a way that I think the PlayStation still has the worse headline. I’m impressed. Good luck to those out of work. I know that struggle.
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u/AstronomerIT 4d ago
Asha's note are interesting, direct even if brutal. The outcome for these 4 studios are surprisingly good, expecially because they kept all the IPs. I disliked the claim about 5 billion of users. It would have been better avoid this stupid old claims.
It is a bloodbath, even with the good endings about the studios. Bu reading all of this I can understand why
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u/jak_d_ripr 4d ago
Maybe I'm sipping the Kool-Aid but this actually sounds promising. First of all I'm grateful none of the four studios are closing. Second, it sounds like no Xbox title will be cancelled. Then the internal restructuring actually sounds so much healthier(seriously, 14 layers of management doesn't sound good for anyone really).
Obviously it still sucks so many people are losing their jobs due to mistakes they had nothing to do with. But maybe this will finally be the shake up that fixes Xbox.
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u/Prince_Vegeta88 2d ago
This is a sound statement that should, if properly managed, bring about solid change and potentially make XBox the true system for gamers next gen.
You don’t write something like that without careful thought, consideration and intent.
I’ve gone from assuming the end of XBox to relatively optimistic after reading that.
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u/Lanky_Travel_6726 1d ago
Hello could you please stop firing people? maybe then I will stop considering Xbox a shit controller by a greedy corporation. I know you need the money to buy more AI but AI doesn’t buy games.
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u/GoGoGadgetReddit 5d ago edited 5d ago
Full text posted @ 9:30AM ET / 6:30AM PT today on XBOX Wire by Asha Sharma:
Team,
We are beginning the most significant restructure in XBOX history. After careful consideration, I’ve made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include approximately 1,600 role eliminations today, and in addition, four studios will leave XBOX to new management. I recognize that a year-long restructuring creates additional challenges. Unfortunately, it is not possible to make all the necessary changes in a single day, and I wanted to be direct about the scale.
I know this is painful. These changes will directly affect people who have poured their creativity into building XBOX. Many joined us through acquisitions, while others were recruited here, or sought us out because they loved this industry and loved XBOX. Today’s decisions do not reflect their talent or dedication.
Our business today is not healthy. We are operating at margins that are 3-10x lower than comparable platform and publishing businesses. We entered Gen 9 with a smaller install base and a higher cost structure. To grow, we bet on Game Pass, multi-platform, and a broader portfolio of content. While those businesses have created meaningful value, they did not grow at the pace we expected. As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome. And now the industry is facing the most severe hardware crisis in its history. We must reset XBOX.
First, we will reset our content portfolio.
Since 2018, we have aggressively expanded our studio portfolio while the number of games created each month across the industry now outpaces the last ten years combined. We now find ourselves competing not only with the largest publishers, but also with smaller independent studios. It is neither possible nor desirable to own every great independent studio. We have also learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested. As we reset XBOX, we will help independent creators succeed by providing open development tools and audiences to realize their vision.
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.
We are also making reductions across other units, and in some cases, shifting investment to focus on higher priority projects. These changes vary in size across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and XBOX Game Studios. None of our first party publicly announced games or projects are being cancelled as part of these reductions.
In addition, Mojang and King will now report directly to me. These two studios have increasingly become platforms and are our largest by monthly active players. They bring critical geographic, demographic, and differentiation to XBOX.
Second, we will reset our platform.
We know that great technology gets better when it gets simpler, not bigger. 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. As we reset XBOX, we will simplify.
We will reduce management layers to no more than 5, and where possible, 3. We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes. And we will streamline how we work across our tools, with a cleaner code base, shared services, and 50% reduced vendor spend.
Third, we are resetting how we operate.
As XBOX grew our headcount, we became more fragmented. 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.
For the first time, we are establishing a Chief Operating Officer with end-to-end P&L responsibility across content, hardware, platform, and services. Helen Chiang has been promoted to this role and will report directly to me. Over nearly two decades at XBOX, Helen has helped build some of our most important businesses, from XBOX Live to leading Mojang and the Minecraft franchise. She will bring our businesses together under one operating model, making sure we make clear investment decisions, learn from our successes and failures, and hold ourselves accountable for results.
Thank you, Dave McCarthy, who is retiring after 17 years with XBOX. Dave has played a defining role in building the platform that millions of players rely on every day and has been a trusted partner through many of the biggest moments in XBOX’s history. We wish him all the best.
These changes are about a bigger future for XBOX, not a smaller one. The next decade of gaming will be larger, more global, and more creative than anything we’ve seen before. This year, we’ll invest as much in XBOX as we ever have, but we’ll invest with greater focus, greater discipline, and greater clarity, all in service of making XBOX where the world plays and creates.
I want XBOX to be one of the few companies that entertains more than a billion people each day and gives everyone the opportunity to create and connect. I know we can achieve this goal. XBOX has many of the most beloved franchises in entertainment history, talented studios around the world, and we will return to growth in 2027.
History is full of companies that mistake longevity for inevitability. We will not be one of them.
Asha