Hitting the reset button on Xbox.
This year is shaping up to be one of the biggest turning points in gaming history.
Not even a week after PlayStation sent shockwaves through the industry with its announcement that it would stop producing physical discs in 2028, Xbox has now followed suit with its own news.
Microsoft has spent the better part of two decades building one of gaming‘s biggest empires.
From acquiring beloved studios and capitalising on the Game Pass model to taking on PlayStation head-to-head with exclusive titles, Microsoft’s gaming division has rarely shied away from thinking big.
Now it’s doing the opposite.
The company will undergo “the most significant restructure in Xbox history”, according to CEO Asha Sharma, by laying off 3,200 employees. Half of that number saw the end of their Xbox careers yesterday afternoon, with the other half expected to be let go throughout the next financial year.
The news broke when the company’s CEO took to X to announce the changes.
“I know this is painful. These changes will directly affect people who have poured their creativity into building Xbox… Today’s decisions do not reflect their talent or dedication.”
Sharma addressed the decision further in an interview with Fortune, stating, “In order to grow, we made a bunch of bets … and as we did that, we inherently didn’t focus on the core business. The number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin.”
Alongside the layoffs, Microsoft has dropped four studios, with a fifth stuck in limbo until it is sold off or closed indefinitely if it doesn’t find a buyer. The gaming studio in limbo is Arkane, responsible for the upcoming Blade game, the fate of which is now up in the air, in a situation shockingly similar to its upcoming movie counterpart.
Sharma says the overhaul is designed to “reset” Xbox’s content strategy and day-to-day operations to return the brand to long-term growth.
Whether fans embrace that vision remains to be seen, but one thing is already clear: Xbox is entering a very different era from the one that defined the past decade.
