The least you can say is that Microsoft is going through a rather delicate patch right now, one that is denting its popularity with players. After parting ways with 1,600 staff last July, the Xbox division announced last week that a further 268 jobs were being cut. The second phase of this massive reorganisation is not without consequences for the American manufacturer's studios.
For instance, Activision has taken over the assets of Halo Studios and Rare. The Playground Games and Turn 10 teams have merged. Obsidian Entertainment, meanwhile, now sits under the Bethesda Softworks umbrella. King, for its part, has been handed Microsoft Casual Games. While Double Fine Productions, Compulsion Games and Undead Labs have regained their independence, things are rather more complicated for Ninja Theory.
Microsoft justifies the layoffs
Although the British studio unveiled Senua at the Xbox Showcase last June, its future is clearly hanging by a thread. Several publishers are said to have shown an interest in the project, but according to Matt Booty, the talks came to nothing. Ninja Theory therefore faces the prospect of outright closure. Arkane, finally, is currently looking for a buyer. What has surprised a fair few observers is that this latest cost-cutting exercise came after Xbox had snapped up Hideo Kojima's Physint.
In the latest episode of Sources Podcast, Microsoft boss Satya Nadella was keen to defend Asha Sharma and justify the layoffs. "When I look at our studios, our catalogue of franchises and our ability to build on that to produce great games in the future, I'm thrilled," he explained. "Asha and the teams are streamlining things, and that's great to see."
Cold, cynical arithmetic
He then added: "Now we need to invent a viable business model that lets us bring games to an audience that keeps on growing. Our goal has always been to be a great publisher and a great supplier of games on PC and Xbox." During the same appearance, Satya Nadella also restated the commitment made by Phil Spencer's successor: a return to growth from the next fiscal year onwards, while continuing to ship quality titles.
Satya Nadella's remarks – which more than a few will no doubt call cynical – seem utterly out of step with the whirlwind the Xbox Game Studios have been caught up in for several months now. With Microsoft having announced 4,800 layoffs (3,200 of them within the Xbox division) by mid-2027, the reaper is far from done.
