Xbox’s ‘reset’: all the news about Microsoft’s layoffs and studio changes

Xbox is making some big changes — again. On June 10th, a few months after Asha Sharma took over as CEO, she and newly promoted chief content officer Matt Booty sent a memo to staff warning of an “Xbox reset.” The business, they said, is facing significant challenges, including a 3 percent “accountability margin,” massively higher component prices for consoles due to the memory and storage shortage, and an “over extended” studio system. On July 6th, the company announced mass layoffs at Xbox as part of broader cuts across the company. About 1,600 staffers were laid off that day, with 1,600 more set to be cut over the course of Microsoft’s next fiscal year, Sharma said. South of Midnight developer Compulsion Games and Psychonauts creator Double Fine Productions will become independent again, while Senua developer Ninja Theory and State of Decay 3 maker Undead Labs will get new owners. In addition, management at Blade developer Arkane Studios is “beginning required consultation with its Works Council to review potential strategic options,” Sharma said. Sharma noted that there will also be changes at “Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and XBOX Game Studios” that will “vary in size.” That reportedly includes cutting around half of Doom developer id Software’s staff. Under Sharma’s leadership, Xbox has already made some other major changes, including upcoming price hikes for Xbox consoles, lowering Game Pass prices but cutting out new Call of Duty games, rebranding Xbox to XBOX, and making both Gears of War: E-Day and Clockwork Revolution Xbox console exclusives. Read on for all of our coverage of the shifts at Xbox.