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

 

[MohammedQ8]

I bought all jrpg games on xbox series x because they give us free pc version of the games (not all of them) … I regret buying them on xbox now.

 

[raxadian]

Xbox Ally

The only difference with the non Xbox branded one is like a button.

 

[ftjiso]

microsoft loves showing games with gameplay then cancels them. scalebound comes in mind

 

[AdenTheThird]

Wild. I was really looking forward to Perfect Dark. Might be reconsidering future Microsoft-related purchases in the future.

 

[BraveDragonWolf]

Vegeta! How many employees were laid off at Microsoft??

 

[eriols]

The video game industry is screwed up by GamePass and Sony's monopoly

 

[AngryCinnabon]

The only difference with the non Xbox branded one is like a button.

And possibly better battery life if the z2e is more efficient, but regardless I've really reconsidered my stance on the matter and I've decided to not get one.

 

[Dontuuch17]

What? Dude Forza's been doing great.

Is xbox aiming to not be a company along with not being a console?

 

[Xzi]

Supposedly it was Microsoft that bought Activision-Blizzard, but it feels more like Activision-Blizzard bought Xbox. Perfect Dark had been on my Steam wishlist from the beginning, now they have nothing worth looking forward to (sorry Obsidian, $80 for The Outer Worlds 2 ain't it). Might as well sell off all their IPs to Valve and Sony and call it a day.

 

[kingaz]

Supposedly it was Microsoft that bought Activision-Blizzard, but it feels more like Activision-Blizzard bought Xbox. Perfect Dark had been on my Steam wishlist from the beginning, now they have nothing worth looking forward to (sorry Obsidian, $80 for The Outer Worlds 2 ain't it). Might as well sell off all their IPs to Valve and Sony and call it a day.

It's like some Microsoft exec fumbled around their office in a coke induced stupor looking for a game to pilot the $80 price point, and Outer Worlds 2 was just the first one they happened to trip over.

 

[DragonMals]

Okay. Microsoft might as well discontinue the Xbox branding. Even PlayStation, the system that had released a console with no games still manages to live peacefully and pridefully while Xbox is just practically dying at this point. Just give it up!

 

[Xzi]

It's like some Microsoft exec fumbled around their office in a coke induced stupor looking for a game to pilot the $80 price point, and Outer Worlds 2 was just the first one they happened to trip over.

Funny enough, I think there are more people out there who would be willing to pay $80 for a new Perfect Dark than there are people willing to pay that much for TOW2.

 

[SS4]

Anyone else get the feeling we are headed for something similar to the 1983 great videogame crash?
I for one hope that we are because a massive change is needed!

 

[Viri]

Does anyone else remember a few years ago when people were pushing around a rumor that Microsoft was about to buy out Sega? It was before Microsoft bought out ABK. When Sega sold their arcade business, the rumor ramped up like crazy.

Spoiler

Thank god that rumor was false.

 

[Jayro]

Sell the Perfect Dark IP back to Playtonic Games already...

 

[Osha]

Anyone else get the feeling we are headed for something similar to the 1983 great videogame crash?
I for one hope that we are because a massive change is needed!

Here's hoping.

 

[kingaz]

Anyone else get the feeling we are headed for something similar to the 1983 great videogame crash?
I for one hope that we are because a massive change is needed!

Definitely a monkey's paw moment, where out of the ashes of the current industry comes a future where everything runs on smartphones and The Cloud™, the AAA space is reduced to 5 live service titles with somehow even more predatory microtransactions and advertisements being shoved into literally every second of gameplay, and the only source of new games that aren't glorified slot machines are indies.

Just all of the worst trends of today dialed up to 11. (Not that I think indies are bad, quite the contrary, it's just sad when they're the only players in the space delivering anything of value).

 

[Viri]

That time when Phil Spencer wanted Microsoft to try and buy WB games, and maybe, just maybe, Nintendo.

Spoiler

A month after that email, Microsoft bought Bethesda. Because Sony wanted to make Starfield/Redfall exclusive to Playstation.

 

[thesjaakspoiler]

The next-gen XBox is going to be awesome!

 

[Reploid]

Better cancel it and shut down studio now than two weeks after release