Today is probably going down as "Black Monday" at Xbox.
Following weeks of rumors, Microsoft announced sweeping changes to the Xbox business today. Following calls from new Xbox head honcho Asha Sharma to "restart" the business, Microsoft is following up a massive 9,000 job cut last year with 1600 today, with additional throughout the year, ultimately totaling some 3200 lost jobs. In addition, Xbox will be pulling back to double down on major franchises as it lets go of multiple studios:
-Funding was pulled from several collaborative projects, like IO Interactive's Project Fantasy, resulting in lay offs at IO. 1666 Amsterdam and a project from John Romero also saw funding pulled.
-Double Fine(Kiln, Psychonauts) and Compulsion Games (South of Midnight, We Happy Few) have been spun off back to independent studios, retaining rights to all IP and games.
-Ninja Theory (Senua) and Undead Labs (State of Decay) have been sold to new owner(s), to be revealed later this summer.
-Arkane (Dishonored) is in process of being spun off or sold, but may take longer due to French labor laws. It's not clear how this will impact Marvel's Blade. After a teaser showing in 2023, has been radio silent. Rumors are the game has run overbudget and plagued by development delays.
-Cuts are occurring across the board at the remaining studios with Zenimax/Bethesda and Blizzard being pushed to work on higher priority projects with more significant IP.
Games previously revealed (short of Blade) at this summer's Xbox Showcase are still planned for release (Fable, Gears of War E-Day, Halo Campaign Evolved, Clockwork Revolution, etc).
Experts and analysts have already been pushing back on these moves. Some are even pointing to Xbox as being "the sacrificial lamb" to cover for massive mismanagement in other areas of the business, particularly in AI. Xbox, under prior management, was rumored to have been foisted an "unreasonable" margin goal, especially after the massive buying spree Microsoft too in the late 2010's and early 2020s in an attempt to bolster its business following the fumbling of the Xbox One.