We have an update on rumors about pending layoffs in Xbox Game Studios.
The rumors originally started with a report from Jason Schreier for Bloomberg, so it’s somewhat fitting that Schreier shared this update. He said this on Bluesky:
Xbox’s fiscal year ends today but the mass layoffs that Bloomberg News reported on last week are expected to hit on Wednesday, for people wondering.
Presumably, Microsoft employees shared internal communications to Schreier, so he already knew this earlier but held back on sharing the information. To be clear, there are reasons not to show all your cards, including the need to verify more information, and also see if Microsoft would object to the report, or give an official statement.
Previously, rumors brought up Turn 10 Studios, Stoic Studios, and Xbox’s UK based studios, as the potential subject of these layoffs. George Broussard actually said that Microsoft is closing studios and layoffs could run between 1,000 to 2,000 employees. While none of these details have yet to be confirmed, it’s understandable that it would cause a lot of concern among fans.
Tim Schaefer of Double Fine, and previously from LucasArts, made a vague post on Bluesky himself. In this case, he posted a screenshot which shows an “A” button prompt, with the text “We Continue.” Replies around this post have already assumed the worst, but again, we can’t know exactly what it means right now.
We already discussed that these layoffs seem to be an indication that the wave of video game studio closures and developer layoffs continues in its third year. But of course, it’s perplexing if these layoffs really are happening, when Microsoft reported a profitable quarter for their gaming division recently.
Prior to this, Microsoft revealed the ROG Xbox Ally handheld line, and the Meta Quest 3S Xbox Edition. Microsoft and AMD also revealed a partnership where AMD will be making a new line of gaming dedicated chips, not just for Xbox consoles, but also PCs, handhelds, and the cloud.
All of this seems to indicate that Microsoft has plans with which they will pledge a lot of investment, particularly on the hardware side. There does not seem to be any indication that there are problems on their game studios business, which has made the company large revenues that they have been touting in their financial reports.
As we had indicated before, if this is really happening, Microsoft is going to have to address this in a way that will satisfy, not just their loyal Xbox fans, but the broader gaming public. And this time, the people who made the decisions have to demonstrate their accountability for them.
