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.

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[MohammedQ8]

do you xbox will buy steam? what will happen to my windows store games in the future? no one will buy from them if xbox is gone.

 

[pedro702]

microsfot bought studios left and right and now they are gonna close it one by one its regular practice.

 

[Maximumbeans]

Just sad, there's no excuse in relishing this news or laughing at it. That's a lot of households now having to rebuild themselves.

 

[AxlSt00pid]

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

You can laugh all you want but Rare Replay was the only reason I ever got an Xbox One in the first place lmao

 

[SDA]

It's called intuition. You know Microsoft never lies when they talk about lay-offs.

 

[Moe87]

Ugh, is it consequence from Microsoft's acquisition of Activision Blizzard? The acquisition is very expensive and MS threw all money.

Post automatically merged: Jul 3, 2025

do you xbox will buy steam? what will happen to my windows store games in the future? no one will buy from them if xbox is gone.

Hope not, Valve is private company and Microsoft can't rely on hostile takeover, so they could try to buy and Valve can say no to them.

One of member here said Gabe Newell's son likely would take control of Valve if Gabe retires or dies.

 

[yankii]

We need another video game crash...

 

[Skelletonike]

After seeing some of the people that got laid off, I dare say that Xbox may be better off going forward.

 

[Marc_LFD]

The next-gen XBox is going to be awesome!

She sure sounds very enthusiastic..

 

[yoyoyo69]

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.

This is me. I can appreciate some seem to like Gears of War, but for me personally it is one of the most terrible franchises I've ever played, I've never understood the appeal. Definitely not for me.

All IP Microsoft have, even those which are in genres I'm a huge fan of have been poor. Microsoft just don't seem to be able to cut it in the gaming space.

Getting rid of the only people who can help them salvage what they have is not going to work out for them. Atleast management wil get big bonuses again

 

[AndorfRequissa]

gaming industry is just shooting itself in the foot more and more. they wonder why fan made projects continue to increase. people just want to play entertaining games.

these studios and companies are just making profiteered designed products guised as a game. the entertainment factor is secondary. not even nintendo cares about entertainment anymore. if u are entertained outside of the scope of how they designed the game you are playing it wrong in gaming companies eyes. this is part of core reasoning why these studios are falling apart.

way too many business people making business decisions over making entertainment.

 

[Robert Newbie]

gaming industry is just shooting itself in the foot more and more. they wonder why fan made projects continue to increase. people just want to play entertaining games.

these studios and companies are just making profiteered designed products guised as a game. the entertainment factor is secondary. not even nintendo cares about entertainment anymore. if u are entertained outside of the scope of how they designed the game you are playing it wrong in gaming companies eyes. this is part of core reasoning why these studios are falling apart.

way too many business people making business decisions over making entertainment.

The lack of passion is felt from the consumer end. If you play a game like Grand Theft Auto III, you can see the ambition the devs poured into each segment and mission. You can feel the results of all the hard work prototyping The Legend of Zelda: Ocarina of Time through its responsive mechanics.

It's ironic, when you think about how we envisioned the future of the industry back in 2001. We have the tech, but do we have the creativity and freedom of expression?

 

[LightBeam]

On one hand it doesn't really surprise me, it's been so long so I should have seen that coming

On the other, I was genuinely expecting those and thought they would make the Xbox brand shinier

But yeah I guess they're just focused on releasing Black Ops 7 and other shit CoD games, hopefully one day they'll bomb because the hardcores are getting tired of it, but I also don't expect them to stop buying them. They're just like the Pokémon people, they'll keep buying it just to complain until they think that the shit they're eating tastes good

 

[raxadian]

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.

The Game Mode is said to cut out 2G of Ram usage on Windows but just use SteamOs instead.

 

[jeremy2020]

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!

The idea that a crash leads to something better is a fallacy (Broken Window). It is just as likely (probably moreso) that you get something worse after a crash. It's not a 'reset'.

 

[RyanTheArchivist]

You can laugh all you want but Rare Replay was the only reason I ever got an Xbox One in the first place lmao

It is the only game I've bought on my Xbox in the past 5 years lol.

 

[Silterpy]

This is why, IMO, Microsoft is losing in this gen and last gen in gaming. Every time they had a game that looked like it would do well, that wasn't Halo or Gears, they would cancel it and layoff people. In terms of online/game pass they are definitely winning though.

 

[ZeroT21]

The Xbox team is probably upping their game before the PS6 hit the shelves next year

 

[Osha]

Add another one to the pile.
I genuinely hope the higher ups at Xbox and Microsoft, including Phil Spencer, never know peace after they die.

 

[AshWeststar]

This is honestly disheartening. You can't talk about "creating new stories, worlds, and characters" in one breath, and then cancel Perfect Dark, Everwild, and Blackbird. Projects that were meant to do precisely that in the next. What's left is a portfolio strategy centred more on "growing the biggest franchises" than taking creative risks, which doesn't exactly inspire confidence if you're already feeling let down by the lack of variety and originality in the current landscape.

Game Pass rising in cost while delivering less creative certainty just compounds the issue. Between studio closures, repeated layoffs, and cancelled innovation, it's getting harder to see a healthy future for the parts of the industry that once felt most ambitious.