Oh, so the reset meant layoffs. The usual justification of making the business leaner to better compete and be able to fluidly respond to the economy and same old same old used by every company. Iâm hopeful this suggests targeting redundancies in managerial positions and not studios, but they also speak about being overextended. No matter what happens as always I wish the best for the people who are going to lose their livelihoods and hope they can find new jobs soon. Especially in the USA where the job market is shot. Iâll give credit where due and say I like that they just publish these memos openly on Xbox Wire because they were getting leaked INSTANTLY anyway. This at least controls the narrative a bit more. I donât like the, âweâre all in this together kumbaiya BS.â when it comes to people being out of a job. I donât think they said anything âwrongâ here, but Iâm going to be very biased toward people (not a company) everytime.
Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue.
Five years is a long ass time. Thatâd put us at about 2021 where gaming was benefiting the most from the COVID boom. It seems weâre still dealing with those numbers and the industry having failed to keep them. A lot of ventures and rising publishers and studios that spun out of this boom have been shut down. It seems weâre still dealing with that shadow. Certainly going back to then Xbox & Game Pass had crazy growth along with the rest of gaming that it just has not been able to keep up. Itâs really too bad they werenât set up for cloud gaming or had as good a PC platform back then. Maybe those people wouldâve stayed or locked in more to the subscription.
This also makes it sound like the PS ports & margin were a coincidence timing with ABK finalizing or just that ABK finalizing took so much time and resources more than was planned that they happened. Either way 5 years is a long time. Three before PS experiment launches and that decline wouldâve been even after Zenimax but before ABK was announced. I think Xbox just really wanted ABK to pass smoothly and hoped thatâd put them back on the path to growth.
Our current platform infrastructure is not built for the battle ahead. Our systems are overly complex, spanning hundreds of dependencies, which hinders our ability to move fast. Weâve become too reliant on vendors to operate our systems and must become more self-reliant as an engineering culture to build for the future. We must increase the value we ship to players while decreasing the time it takes to do so. Going forward, weâll evolve and rebuild our stack and look at capabilities across all of XBOX and potential M&A to help us win in hardware, PC, mobile, and streaming.
I have no idea what this means because Iâm not privy to whatever internals Xbox has, but sure. This sounds good if they can achieve it. Itâs even better if this means layoffs will focus on ending contracts and bringing more in house. Maybe this even means fixing customer support. Weâll see in July I guess.
We are currently unable to make as many consoles as players want to buy, and we need a new business model and partnerships for hardware as we remain committed to Helix.
This sounds like OEMs, which I thought were already confirmed to be happening?
#1: Over 1 billion players choose to play XBOX and our games each year, for a total of 72 billion hours across Console, PC, Mobile, and Streaming (excluding much of China and a few other properties).
Hey, thatâs good. Even if theyâre not all on Xbox platforms. Thatâs like twice the size of the entire console market. Only another billion to go to reach that number Phil always said (though itâs probably like 3 to 4 billion now).
Letâs reset for a stronger XBOX and build the #1 gaming and entertainment company.
Nice to have goals, but dear God imagine seeing this and getting the axe next month. If anything Iâd send out the harsh reality memo now and then save the, âItâs fine. We did what we had to and now after some sacrifices Xbox is stronger and we can move forward to be the best gaming company in the universe.â
That would still come off as corporate BS, but having it now comes off as a corporate BS and just kinda mean. Or haughty. Condescending. Imagine getting this memo and then getting laid off next month. You were just told that you were part of the deadweight holding Xbox off and Xbox needs to be rid of you to reset and be stronger. Yikes.
That memo is fucking disgusting, depending on hiw bad the layoffs are at studios thatâs just going to disrupt game making and cause delays.
The talk of spending 20 billion over 5 years in content is so tone def too. Like Sharma Xbox was making 16 billion dollars a years before ABK, and recently posted 21 billion dollars in revenue after ABK.
What is she hiding exactly? How much more money has been spent on ABK that 4 billion dollars spent a year on content that with ABK is somehow completely killing their entire yearly revenue?
Because frankly, this entire memo reads like coporate bs of the highest caliber.
Massive layoffs. To what scale is not clear. Not saying it canât be massive, but sounds like schreier is not sure.
Surprised at the component pricing comment. Would figure they buy so much stuff already for data centers they would get the best deals. Relatively speaking to the price surge.
Number 4 definitely sounds like whole studios or teams going rather than just some jobs here or there - itâs basically saying âwe built or bought tons of studios to provide content at a reliable cadence for Game Pass and our players, but itâs now more than enough so to save money we need to cut backâ.
(I deal with corporate speak all the time, so I donât think Iâm misinterpreting it).
Iâll be shocked after reading that if we donât see at least one or two studios (or second teams within some studios) goâŚ
Sucks big time, theyâve just started to release regularly and even then due to poor spacing and planning (for example holding completed games to not compete with each other) weâve still had 5 months without a major release at times - yes that can still be 1 a quarter but it really feels at times theyâve chucked all their games and DLC out in September to November or September to February for good years, then often little from Feb till Sept.
They finally sorted it this year and now seem to be cutting again ffs - and while weâre pissed itâs far worse for the staff involved, particularly if theyâve not been informed yet so everyoneâs on edge
I got same impression from that part. Itâs really challenging to understand what is going on there. Just a few months ago they were adamant at no Xbox layoffs while the rest of MS got hit. If the divisions poor performance is so bad, wonder how they evaded job cuts last time.
The problem is memory and storage and even servers for data centres are huge platters or racks - far too big and expensive for use in consoles and they canât be cut up or anything.
Reliability is a more important thing in them too with added redundancy for bits failing and more check bits etc added in, far beyond what consumer RAM or SSDs need - those are often more fiddly and expensive to produce per GB as theyâre tiny in comparison, while the data centre stuff is about scalability and is a whole different beast
Microsoftâs Xbox division will be hit with significant layoffs next month, according to people familiar with Microsoftâs plans.
The company has been preparing for the layoffs internally for weeks, with Xbox CEO Asha Sharma hinting about âmaking hard choicesâ last month. Sources suggest the cuts could even involve a studio closure, or changes to the Xbox studio lineup
In a recent Giant Bomb episode, rumors of 1,000 layoffs for Microsoftâs Xbox division were mentioned. Bloomberg also reported today that the cuts would be âmajor,â and involve budget cuts for marketing and other areas of Microsoftâs Xbox business.
If the 1k rumored people is the target that 2 large studios or multiple small ones.
xbox isnât long for this world unfortunately. Microsoft will become a publisher or exit all gaming all together in the next decade.
Yep Iâm really worried about some of my favourite teams - many have been loved by us gamers such as Avowed or South of Midnight, but theyâve not sold brilliantly.
Probably not even The Outer Worlds 2 did - but Obsidian are workhorses so Iâd be staggered if one of their teams was laid off and truly gutted as I love their games, but I also thought there was no chance Sony would ever shutter BluePoint.
Itâs probably not helping morale in Xbox either, particularly if theyâve not told those affected yet - and for reviving Xbox to cut studios making games that make it so unique and worthwhile would leave a very sour taste in the mouth.
My only hope is weâre reading it wrong
Itâd never exit gaming altogether, itâs been in it for over 45 years now - and ABK prints cash.
Helix seems to be a bet to merge Xbox into their successful Windows business, and help keep it as the default OS for gamers - Iâd be very surprised if they ever lost the Xbox PC store as itâs easy money, but yes as Helix and PCs becone a unified system you should see Xbox just produce a hero unit like with Surface and support OEMs, concentrating on their store and publishing.
No way they quit stores all together though, itâs just an easy way to bring cash in and stops them completely surrendering to SteamâŚ
A big studio closure would be a disaster in many of our eyes and definitely for the devs involved, while cutting marketing seems counterintuitive given I thought that was a weak spot theyâd brought Sharma in to fixâŚ
The fanboys seem to be whooping over the two exclusives so Iâve no doubt theyâll happily blame any studio let go as âtheir own fault for producing X or doing Yâ, whereas actually reviving Xbox surely needs loads of great contentâŚ
I would expect multiple studio closures. They bought beloved studios that do not make any money. Itâs just the reality of how heartless, and stupid business is.
Least surprising news ever. Iâve argued with plenty of people about how the console side has been degrading and getting deprioritized, so none of this shocks me. Too much focus on cloud, services, and other platforms, plus a lack of real IP, pushed users off the ecosystem. Driving people to Steam and PlayStation is an absolute failure from Phil Spencer and the whole team. They refused to actually push the Series S at launch, and thereâs been zero real innovation on the console side , no new controller, no new dashboard, nothing. This is xbox was a failure, steam isnt an xbox neither is my freaking phone, you want to know what is an xbox? The xbox store where you get 30% off purchases
Is there a Bandcamp for games? Increasingly tempted to shop there, as I do for music. This constant need to shit on people to squeeze out more dolla is disgusting.
Also, if I had a penny for every banal âXbox is deadâ post Iâd have a grand. This prognostication is utterly useless: myopic and scattershot.
The memo talks about Xboxâs need to grow ACROSS console, mobile, cloud, and PC and highlights their success reaching over a billion gamers across all platforms alrrady. This is an Xbox happened in 2025 and PS ports in 2024 and Sharma admits to Xbox annual revenue declines happening over the past five years. Both were attempted solutions to wider issues the entire industry is facing. Thereâs new single cause uniquely faced by Xbox and there was never an easy solution. Playstation did none of those things and still shut down many studios and games. Much of the industry has seen closures as the COVID boom just didnât pan out, thereâs increasingly just too many games fighting for userbases that arenât growing fast enough to accommodate all of them (especially on console), and now itâs facing hardware issues due to AI on top of the inflation and supply chain issues that already existed.
Which ones could these be?
Why must everything always lead to the most extreme outcomes? Layoffs are awful and appalling and a scourge of our capitalist economy, but by this point they are something every business does. Gaming has unfortunately seen a lot of layoffs and studio closures this generation. Unless you think the same about Playstation. Microsoft is more invested in gaming than ever and its pulling in more revenue than ever. Xbox is secure in how difficult itâd be to untangle at this point. Who can say where theyâll be in the next decade? Their current strategy is to build up the ecosystem on PC and Cloud and Mobile. I think itâs possible that what we consider a console today changes or is gone by then, but regardless Microsoft will always be in gaming. Reality is far more apathetic than extremes. In reality this is âbusiness as usualâ and Xbox will continue to move on after theyâve made sacrificial lambs out of whatever will be sacrificed. The post even describes using more mergers & acquisitions in the future to continue to build up. Theyâll cut what they think isnât working and then buy what they think they need and then continue to do both those things until time memorial because theyâre a for profit business.