After initial rumors claimed that Xbox would be hit by major layoffs, it seems the claims have come to fruition. Over 9,000 employees at Microsoft have been laid off, including the gaming division. Developer The Initiative has been entirely shuttered, along with their project, which was a new entry into the Perfect Dark series. Rare was impacted too, with Gregg Mayles, who directed Banjo-Kazooie, leaving the company, and Rare's latest game, Everwilds, being canceled. Zenimax's upcoming MMORPG codenamed "Blackbird" which began development in 2018, has also been canned. Bloomberg has reported that Forza Motorsport's developer, Turn 10, has lost almost half of its team as well.

We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative. These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape. We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment.

Our overall portfolio strategy is unchanged: build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters. We have more than 40 projects in active development, continued momentum on titles shipping this fall, and a strong slate headed into 2026.

For those directly affected, we are working closely with HR and studio leadership to provide support, including severance, career transition assistance, and where possible, opportunities to explore roles on other teams.

To everyone across our studios: thank you. Your creativity and resilience continue to define who we are. I believe in the strength of our teams and the direction we’re taking on the path ahead.

Source

 

[Vixi]

Everwilds and Perfect Dark were among the few first party games I was at some point looking forward to.
Never got into Forza and Gears and Halo Infinite was terrible. Been exclusively playing third party games this generation.

 

[Kioku]

This is just depressing.. Reconsidering future purchases.

 

[K3Nv4]

Gaming industry: we refuse to pay devs to give the public good games.

 

[raxadian]

Perfect Dark would have been an easy slam dunk but nope, Microsoft gonna be Microsoft.

 

[Niels Van Son]

An absolute tragedy.

 

[AngryCinnabon]

Yeah I think I'll be avoiding Microsoft entirely from now on.


Yes that includes not getting the Xbox Ally, this is legitimately upsetting and just ain't right.

 

[RyanTheArchivist]

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After initial rumors claimed that Xbox would be hit by major layoffs, it seems the claims have come to fruition. Over 9,000 employees at Microsoft have been laid off, including the gaming division. Developer The Initiative has been entirely shuttered, along with their project, which was a new entry into the Perfect Dark series. Rare was impacted too, with Gregg Mayles, who directed Banjo-Kazooie, leaving the company, and Rare's latest game, Everwilds, being canceled. Zenimax's upcoming MMORPG codenamed "Blackbird" which began development in 2018, has also been canned. Bloomberg has reported that Forza Motorsport's developer, Turn 10, has lost almost half of its team as well.



Source

It's really sounding like Corporate Microsoft and the Xbox Team are not on good terms with each other.

 

[jomaper]

Sorry friends, infinite growth is impossible if we pay you living wages, specially when we can keep our super juicy million dollar bonuses making shitty AI games.

 

[Viri]

Remember, if you hate a video game company, just hope for them to get bought by Microsoft.

Also, I'm shocked they still haven't canned Phil Spencer. lmao

 

[RyanTheArchivist]

Remember, if you hate a video game company, just hope for them to get bought by Microsoft.

Also, I'm shocked they still haven't canned Phil Spencer. lmao

At this point he's more just seemingly a puppet to them. There have been multiple instances recently where he's praised something personally and then it gets canned instantly after. So I wouldn't be shocked if he has little say in a lot of it.

 

[Deleted member 706757]

A masterful gambit from Microsoft, outplaying Sony's no games strategy by producing a negative amount of games

 

[CeeDee]

they call it the Xbox One because they made One good video game for it

 

[RyanTheArchivist]

they call it the Xbox One because they made One good video game for it

Yeah RareReplay the collection of games with almost all made before Microsoft bought them

 

[BigOnYa]

"We have had record profits this year, so let's cancel games, shut down studios, and fire 10,000 employees." - MS

 

[Exnor]

Anyone surprised?

Price increases on games and people just stop buying them.
We are on unprecedented times, the 1st time where console prices increase, mid cycle, and also game prices.

 

[Marc_LFD]

This sucks, especially because of PD.

 

[kingaz]

Yeah I think I'll be avoiding Microsoft entirely from now on.


Yes that includes not getting the Xbox Ally, this is legitimately upsetting and just ain't right.

It feels like Microsoft has been making it exceedingly easy to dodge their entire gaming ecosystem since at least 2013.

The one exception to that seems to have been gamepass, but I'm one of the weirdos who likes having indefinite access to my games, and I've been adept enough at waiting for deep sales that I've never felt compelled to rent access to their bargain bin.

 

[Osha]

Anyone surprised?

Price increases on games and people just stop buying them.
We are on unprecedented times, the 1st time where console prices increase, mid cycle, and also game prices.

That's irrelevant, they've been doing that shit ever since the ActiBlizz acquisition. They paid way too much for that and have been trying to recoup that massive loss ever since by shutting down studios left and right. All of this is a direct result of the suits' incompetence.

 

[The Catboy]

Microsoft being Microsoft