Xbox head Asha Sharma announced the beginning of the biggest restructuring in the history of the brand. As part of the Xbox rescue effort, 1,600 people will be laid off and another 1,600 in 2027.
In addition, several Microsoft studios will receive new guidance:
Compulsion Games (We Happy Few, South of Midnight) to become an independent studio
Double Fine (Psychonauts, Broken Age) will become an independent studio
Ninja Theory (DmC, Hellblade) and Undead Labs will be sold to unnamed owners who will fund the development of games, including recently announced Senua and State of Decay 3
Arkane (Dishonored, Prey) has begun negotiations with the French employment authorities to consider possible options. This could mean either closing the studio and selling it to another investor or simply downsizing.
Today our business is not healthy. We are working with a margin that is 3-10 times lower than comparable platforms and publishing companies. We have entered the ninth generation [Xbox] with a smaller base of installations and a higher cost structure. For growth, we are betting on Game Pass, multi-platform and a wider range of content. While these companies created significant value, they did not grow at the expected rate. As a result, our core business was weakened and we added more teams, more investment, and time, hoping for the best outcome. Xbox to be restarted.
- Asha Sharma, head of the Xbox division
Other divisions will also be cut costs, including Activision, Bethesda/ZeniMax, Blizzard, King, Mojang and XBOX Game Studios. Sharma specified that no game announced would be canceled.
