No clue. Without any real details on what their vision is, everything would be pure conjecture. At a high level it looks like they are going for a more collaborative joint effort between the studios. What that would actually look like…or if will come to fruition at all, who knows.
Where in the world did, he say management layers. All I see here is an image from Bethesda Games Union. I think they are also pretty much informing us where and whom these cuts hit and not using flowery speech to hide anything. That’s what I see here unless there is something else I’m missing.
I think Zenimax and ABK make up the majority so the XGS studios hit would be working with pretty low numbers. ID software is said to have been 150 to 200 and is down to about 80 from what I’m reading. That is going to be tough if they expect another triple A game. Perhaps they will have to adopt Unreal engine or have the other studios learn ID tech and take up the work. Outsourcing will be difficult for ID. This almost seems like a different way of closing the studio and have outsourcing,
Oh cool, this thread wasn’t locked.
So okay, I’m going to be a hypocrite because for once I think Microsoft/Xbox successfully spun this. That and they got really lucky with Sony doing way worse (for gamers). My feed is full of, “This sucks. But it was necessary and it’s kinda good actually.” and yeah both no studio closures and letting the studios keep all their IP is nice. So like in theory, they’ve figured out marketing. Yay Xbox. But this all feels so… ick.
But I feel like people are missing the wider issue. Microsoft is still one of the biggest companies in the world. There’s no biting off more than they can chew with them. It’s that they got bored of chewing and just spat out what they ate. They’re not Embracer buying with money they don’t have and then needing to go into panic mode when investments fall through. Microsoft makes these purchases in cash and makes sure they have good money on hand constantly. Yet suddenly they have NO CHOICE but to do these mass layoffs and part ways with studios? They can’t even wait out the year to see if the slated releases make bank? What’s so dire that they need to rush to chop off talent this year? Really what’s so dire that they can’t wait until 2028? Like save the bleak feelings until after Helix launches.
What it feels like is Xbox bolstered their first party between 2018 and 2023. They meanadered releasing games citing first COVID and then that management was too focused on closing ABK. 2024 hits and Microsoft is demanding tighter margins and more profits. They want that ROI. Xbox can’t accelerate anything else and additionally the entire console market stalls even worse than usual because of the AI boom (which is seemingly why Microsoft is more strict about money) is making it more expensive to make consoles. So Xbox does the multiplatform pivot. They don’t go all in on that though and what they do isn’t enough and Microsoft keeps demanding tighter margins. This is an Xbox and ROG Xbox Ally OEM doesn’t work enough. Game Pass despite making 5 billion a year isn’t enough. So Microsoft keeps demanding layoffs and Xbox answers with canceled projects and losing staff. And now studios. I don’t see what’s happening this year as independent to what happened last year and the year before last. This doesn’t feel like a “reset” to fix things, it feels like Microsoft constantly hemorrhaging because they need that ROI and they need it now so they can spend it on AI and boost the he stock market valuation.
It keeps coming down to sales, but like how were these games supposed to simultaneously sell copies, be on game pass & boost GP subscribers, and be exclusive to Xbox so they don’t “lose the console war” (or give up)?? And how is it the studios fault that they weren’t magically doing all the three? If the problem is the business model then that’s on the publisher and parent company. And genuinely I wonder what Xbox’s plan is moving forward. I don’t think COD will be the only game to not be on GP day one if they truly want to focus on sales and big well known IP. If GP has plateaued and they can’t grow subscribers then they can’t grow revenue anymore by supporting it (unless they raise the price which they backtracked on already). I’m not sure how Xbox will pull in users to its platform either if consoles are, well what they are now. These prices are crazy. There’s PC but good luck with that and their mobile plans are dead without support from the courts. Cloud needs a slightly different model to be viable and enticing. So what is the play? So many publishers focused on only their popular IP have gotten killed or bought very recently. Sony isn’t doing too hot with Playstation. All that’s left is to squeeze users dry and hope they can keep up with rising costs.
This Hank Green video I saw yesterday helped me bring words to it. It does feel like they’re trying to “optimize” Xbox like it they do everything else. But it’s so boring and creatively bankrupt. It’s so, “why should I care?” What makes this Xbox? What’s the unique identifier here? Even with exclusives once we go towards the biggest and most popular franchises and make them more marketable, they all get so samey. Like Playstation has the problem of every game feeling the same. And I really don’t think that Game Pass as is is long for this world (if it’s truly already reached its peak and they can’t grow it enough anymore). I love Xbox Play Anywhere, but it’s definitely moved the needle less than GP. Hopefully Helix does a really really good job of bridging Windows and Xbox to create a unique experience.
My Hopium, hopium, is that this is some big brain play for Xbox to have it’s cake and eat it to. Against Microsoft’s massive margin needs something like Game Pass itself has to be subsidized. Sales on other platforms could do that but gamers hate it. So maybe Xbox parts ways with these studios and keeps funding their games through GP deals only now when they release on PS or Switch no one screams bloody murder. Will this be the case? Probably not.
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Umm… studios asking for crowd support to… idk really, I guess ctrl Z Microsoft cutting back on resources and labor for BGS (?), is pretty alarming.
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The crap thing is, if Microsoft hadn’t helped kill component prices with AI and had given Xbox a few more years before demanding high margins, there definitely felt like a potential way through.
That all XGS, ABK and Bethesda games except CoD being exclusive, with Series S for £200 and the games all being on GP, many PS and Nintendo players would get a second console just like many of us have over the years in order to play them.
But Microsoft only waited a short while, where there wasn’t enough output to judge, consoles were in short supply (then cost of living went up and then components did) and the only huge game was Starfield, a new IP and from a studio people might wait and see on as they usually launch buggy (and even when it didn’t, 2 years later when I did the DLC it’s a much better game thanks to updates).
Now with the crazy prices of consoles no one is buying a second one to have all the games, not even with the value GP offers - so as usual with their impatience and strategy pivots Microsoft have kinda screwed Xbox again.
And honestly I have no idea whether this strategy, or Phil’s, or any other can do much - Microsoft probably have the cash to force Xbox’s popularity via huge console discounts and buying tons of exclusives, but they’re never going to do that so all that can happen is it hobbles along with the least profitable bits constantly trimmed off in the hope what remains will be enough to turn the tide or we finally reach a cloud future where without the high barrier of console costs people will give Xbox a chance.
Looking at Surface, I do think that might be their current thinking - cloud for long term, Xbox consoles for the niche hardcore, OEM Xbox Helix consoles for pricing competition and to get a cut of PC sales, and rely on the multiplat games to carry the growth - particularly the already popular ones like King’s games and Minecraft.
If that’s the play and they keep Day 1 on GP and don’t cut too much further, I can live with that - my loyalty will be based on value to me rather than nostalgia as Microsoft aren’t reliable enough to invest too heavily in, but if they do something silly like eventually cutting everyone but Playground, CoD, Mojang and King I’ll be gone
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After cutting 50% from ID and windling the team down to about 80. I more doubtful of their way forward. A billion daily players sounds like Candy crush and a bunch of GAAS titles which I doubt they can achieve especially when they lack the patience. Game sales have tanked and I don’t see it improving now that they want exclusives and not much consoles to sell at an affordable price. Gamepass is the only shining light and if that goes, I will have to consider maybe Asha was really put here to put the division to sleep.
AI will not help them one bit, but they seem desperate to push through it almost like they have nothing else in the tank. Google Amazon and Apple to varying lengths have tried to go into gaming like their other businesses and failed. Nothing I read from Asha strengthens gaming, everything was ultimately blame that was shifted to Phil. Gamepass for like the last 3 months has been subpar and now certain games shown at the showcase may no longer be there.
I would say like someone said she delivered this terrible message much better than I thought so much that you have to fully digest it to see just how bad it is. Honestly, I just hope that Gamepass can be maintained at the quality the last regime had.
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On the post itself, I think most of the talk has been focused on the managing layers. So they make a mention of it and go on to say what positions are being affected across the whole company.
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Stuff like this is really concerning for me.
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.
When taken at face value it does a great job making it sound like Xbox has been falling down a rabbit hole or some sunk cost fallacy and desperately needs to stop the bleeding, but also Xbox and Microsoft have CONSISTENTLY reported to media, gamers, and most importantly shareholders that their player engagement, player base, and play time hours are at all time highs. Even before ABK they’d talk about how they service more gamers than ever and highlight increase MAU. People would say that’s just counting Minecraft on all platforms or growth on PC, so Phil even went out of his way to specify they had more Xbox console users than ever (presumably across Xbox One and Series combined). Then they bought ABK and these numbers started skyrocketing because obviously. Then Forza and SOT added millions on PS and they highlighted that too. Like even ignoring users, they won’t shut up about how much playtime hours keep growing due to more and more existing users playing on the cloud. So what’s concerning is that Xbox is either lying here or they were lying before. Now outright lying to shareholders would be illegal, so more likely they would’ve had to have been “fudging the truth”. None of which is good. You can’t even say, “Well this ignores multiplatform or is only talking about PC” because the studios being cut off all came before ABK. Aside from Arkane they came in 2018. They say the start of the generation so let’s say 2020. So they’ve been losing gamers and playtime hours since 2020 and lying about the opposite happening? That’s not a good look. Or they haven’t and are lying about it now. That’s somehow worse.
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.
This is very alarming. Game Pass has been around for about a decade now, but the pipeline of games they invested in only actually started releasing in 2023 (3 years ago or 2 if you consider it only got consistent in 2024). Multiplatform only started in a mixed capacity in 2024 and Xbox never fully embraced it. So this is them saying they’re gutting the business and starting over after their strategies “worked” but not fast enough and also they’re choosing to start over and focus on their core (which sounds like the console to me) at a time when console hardware is more expensive to produce than ever. Umm… 
. I said with PS. Them giving up their new growth strategy after it didn’t immediately work, despite also admitting it did create value just not enough fast enough, while also not presenting an alternative solution to the problem that made them adopt a new strategy is very very worrisome. If console hardware is facing its biggest crisis in history, then why should I as a consumer feel okay in Xbox giving up on its plan to deal with stagnant console sales. Focus on our core + most severe hardware crisis in history = me concerned.
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.
Sharma is right here, but it’s concerning because she’s right. Capitalism just cannot sustain gaming anymore. It does horrors to the arts. There’s too much competing for our time and wallets and so many gems that have to suffer because we don’t have an infinite money and time glitch.
The industry and Xbox are at an alarming place right now. I think we’ll keep seeing it contract until a certain point.
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I think they are adapting for harder times, and then will regrow whenever the market changes if needed. They however got rid of a lot of people with 20+ year careers and incredible knowledge of what they did, and that unfortunately cannot be replaced. We have to wait and see how all of this goes down, as it all depends on how the next 12-18 months will be executed imo and if they can somehow come back stronger with her new strategy.
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So they’ve repeatedly said that they still see acquisitions as an important way to improve their position in the market. They say they want to focus on in house tools, but they cut the Id tech team.
I’m reading between the lines here, I think they’re going to try and buy Unreal Engine. Not epic as a whole, just the engine and also possibly the storefront. That would save money on fees and also give them a bit of a boost on the pc storefront side.
I would say there is a lot of PR in her speech when Phil was leaving and she came in her speech was different of our great Xbox was and suddenly she and Satya changed the talk, talking on both sides of their mouth. I do think Xbox last 2 quarters were bad, and I don’t recall them saying anything about numbers in those 2 reports and I think this is where Asha leans on in. She talks about 5 years of investment but only mentioned the decrease in the current one, so she is picky. If they want to be transparent just show the books to all. We can look through it ourselves, but they won’t.
Here is a snippet of Satya’s speech before
“Phil helped transform what we do and how we do it. He expanded our reach across PC, mobile, and cloud; nearly tripled the size of the business; helped shape our strategy through the acquisitions of Activision Blizzard, ZeniMax, and Minecraft; and strengthened our culture across our studios and platforms. I’ve long admired Phil’s unwavering commitment to players, creators, and his team, and I am personally grateful for his leadership and counsel”
I think we will see if there is any merit to the trajectory here because it doesn’t make much sense to me. They are obviously still after that 30% margin despite all that Asha said and I don’t think game sales will do much. The play seems to be more mobile centric in appealing to mobile gamers by bringing them to their platform. I won’t be surprised if they start flooding the store with this, certainly will fit in with the Play AnyWhere mantra.
That does make sense though I doubt that will happen unless Tim Sweeney wants to retire. A dubious guy like Sweeney will probably not sell the engine unless if the entire company is added which I doubt the company chasing after AI will want. I won’t be surprised if they try to get Crytek or unity though considering those companies are in a bit of a pickle.
A man who lives up to his name…no, not the guy in the YouTube vid, but Titan. As that post among so many others are friggin TITANIC in length 
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All I can say to all of this is I’m super glad in Feb of 2025 I got a monster pc, Ultra 9 285k, 128 GB ram and an RTX 5080
I will be able to out last the current nightmare of the gaming world until things either completely crumble or get back to something normal.
I was around and gaming in 1983 and lived through that Gaming crash and what came out of it was arguably better then before and I hope the same is going to happen after a few years.
It sucks Gamepass and Phil’s vision did not work, I think he had the right idea it’s just SO MANY console gamers were so brand loyal to Sony nothing Xbox could have done would have swayed them.
Maybe now that Sony has royally pissed off the entire gaming community and is abusing their Console market lead status maybe these indoctorated Sony fans can start to see how bad Sony has always been with consumer policies that whatever Xbox does next they may consider.
I hope Helix is still a full PC with multiple Stores open to it, I would love a RTX 5080 Class pc under my TV in a small form factor, I’ll probably still get Helix if it’s just an normal console but it will be a HUGE missed opportunity to push something really different in people’s homes.
I think Xbox can survive with Console and PC and I think Sony is fucked by retreating back to a single platform and then is going to launch a $1000 plus normal console.
Either way right now anyway PC is the way to go even with rising component prices. You can more easily justify the cost of a PC with many uses over a walled garden console with one use that is going to be over $1000.
All consoles have been PC’s since 2013, it’s just the OS layer blocked them from being the real PC’s they were. It’s going to be silly to charge over $1000 for new console that are really just PC’s and not open up those PC functions. That would at least justify a rise in cost for them.
As gamers the next few years are going to be a bummer for platform warriors so you will need to open up and try different platforms that are not closed off
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I don’t think they sell Unreal Engine separate to Fortnite, as it gives them the strength to do what they want in their biggest money maker as they have full control.
Sweeney won’t surrender that control lightly - and honestly Microsoft is not a good home for any of the industry standard engines, they’d keep laying everyone off (losing the knowledge to maintain it, like they did with 343i and Slipspace) and flip flopping on changes like they do with the other tech they look after.
As for the Epic Store, they’d immediately stop the free games which is honestly the only reason anyone uses that store - and for the “less hated than Epic” store to buy the most hated store just seems pointless.
The Xbox store actually has a better reputation amongst most gamers I speak to, rebranding it to Epic or merging it would damage it (plus Epic actually has less features than the Xbox store).
As for buying the whole company, you’d need Sweeney’s agreement (he’s got just over 41%) plus Tencent (28%), Disney (9%) and Sony (just over 5%)
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Yeah and it’s so tiresome but what always happens with companies like Microsoft. It’s frustrating because they don’t understand the actual value of human resources (not the department but people themselves) and how hard it is to replace that much experience or build a studio back up while maintaining its unique culture and style. Halo and Slipspace got brought up before in one of the other threads. They couldn’t sustain having a proprietary engine because of the awful employee turnover. God I really REALLY wouldn’t want that to happen to iD or even the creation engine. There’s so much value lost because companies think they can treat people like any other inanimate resource. It’s not as easy as just hiring new employees when the market is doing good and getting rid of them when the market is bad.
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Whats up with the iD situation? 136 layoffs is a lot. I’m seeing something about a Frankfurt iD branch having a sizeable headcount but damn. The Texas team is down to like 50 people. That’s an extremely deep cut for one of the rare AAA studios that actually has a fast turn around time for releases.
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Literal ghouls run this company
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