To say this week has been a bad one for Xbox would be an understatement. To see people losing their jobs, games cancelled, studios gutted or even shuttered is never great. Seeing these things happen for non-performance related purposes sucks even more and is the dark side of corporations. So how do we sift through all the news and come out on the other side as Xbox gamers? Let’s try and do so now.

First, we should establish the actual facts here. When news like this comes, there is a lot of misinformation and rumors that get spread. As some of you may know, we avoid talking about rumors until they become official enough to discuss. Websites and social media influencers will latch onto the rumors and spread them for clicks, whether they become true or not. So here is what we actually know after all the dust has settled.

• 9,000 employees were let go across all of Microsoft’s divisions, including a number of employees on the gaming side
• The cuts are reportedly to help fund Microsoft’s 80 billion dollar investment into AI
• Perfect Dark has been cancelled and The Initiative has been shut down
• Everwild has been cancelled from Rare and potential job cuts have taken place
• Cuts have taken place at Raven and Sledgehammer Studios
• Turn10 has cut 50% of its staff and according to now let go employees it was the entire Forza Motorsports team as Turn10 will now focus solely on supporting Forza Horizon and the Forza Tech engine
• Zenimax Online has been impacted and an unannounced MMO “Project Blackbird” has been cancelled
• At least 1 third-party publishing deal has been cancelled from John Romero’s studio

If you’ve heard anything else other than what is above, file it in the “take it with a grain of salt” part of your brain. Could things like OD and Contraband be cancelled? Quite possibly, but so far nothing official has come out so for what it’s worth I’d consider them still alive and kicking at the moment.

With so much to unpack here, I first want to focus on the first 2 points there. That this was to help fund a new AI investment for Microsoft and it affected all of their divisions is a real gut punch. Quite frankly Microsoft can afford both.

As Phil Spencer outlined in his e-mail sent to Xbox employees, and as we’ve seen in financial statements, Microsoft and Xbox are making more money than ever before. While 80 billion is a lot of money, we are talking about a 3 trillion dollar company here.

The other reality is one that I’ve been saying for quite a while now. Phil Spencer may be the head of Microsoft Gaming, but I don’t think he is the one running the ship anymore. Sure, he runs the day to day, and when Satya Nadella and the board come to him to make cuts, he is the one to decide what to cut. But make no mistake, for as much as we like to blame Spencer for a lot of things, these cuts came from well above Phil Spencer’s head.

And that’s what makes this so hard. By all accounts Spencer and the team loved what Zenimax was cooking up with Project Blackbird. So much so that it was reported that Matt Booty had to pry the controller away from his hands just to continue a meeting about the game the last time they saw it in person. 

We know the team adores Rare, and every time Everwild was brought up, it was said to be doing well and looking great. Forza Motorsport has been a staple of the Xbox brand for 20 years now and despite the most recent releases shortcomings, it still reviewed well and did ok.

So Why Were These Specific Cuts Made?

Unfortunately, we also have to look at why these specific projects and studios were the ones affected. This is where the darker side of things come into play. As we mentioned at the top, these cuts were not performance based and that makes it even more difficult. But digging into these studios its understandable why they were the ones affected.

Everwild, Perfect Dark and Project Blackbird were all in development for a very long time. At one-point Everwild had been rebooted as the team didn’t really have a sense of what they wanted the game to be and appeared to be in “development hell”.

The game was quite frankly announced too early, as was the case for many games back in 2019. Xbox needed to show that the “Xbox has no games” narrative was a thing of the past, and they showed as much as they could even if it didn’t have a direction.

The Initiative was created and billed as a AAAA studio. They were given a bit more leeway than the other games as it takes time to build up a studio and get moving on a game. However, Perfect Dark wasn’t really progressing at all by the looks of things and they even needed to bring in Crystal Dynamics for support. It appeared that Perfect Dark was also in development hell.

Turn10 took ages to get the next Forza Motorsport out. After releasing a new Motorsport every other year from 2005-2017 they then took 6 years to release the next, and apparently final game in the series. And while it was praised by reviewers it still wasn’t quite the same quality as the previous titles, and it didn’t seem to resonate with fans as much as previous entries either.

All of this is to say that while I don’t think anyone in management at Xbox wanted to cut any jobs if given the choice, these seem like the most justified choices they could have made. That probably sounds harsh, and I’m not trying to suggest these people should have lost their jobs. It’s cruel to even think about, but when you haven’t produced anything tangible, regardless of profession, these things can happen.

Management Needs To Take A Hard Look In The Mirror

Now while these developers didn’t deserve to lose their jobs, and these cuts came from above, I think it’s fair to say that management, both at a studio level, and higher need to take some time to reflect and look at what has happened.

Any game being in development hell, management should be shouldering a lot of the blame. If a game after 6 years was still searching for an identity, then what were you doing? Game development has changed a lot the last 10 or so years.

Games are much more expensive to make, and take much longer to create. With that said you can’t go close to 10 years without getting close to releasing something. If you don’t then there may be these unfortunate consequences, and that goes for any job, not just gaming. 

All of that falls to management at the end of the day. Matt Booty runs Xbox Studio’s portfolio. Phil Spencer runs the entire division. If some of these games are going through tumultuous development cycles then they need to step in and either support these studios, or say enough is enough we need to move on. That the ones taking the fall are the lower level developers sucks as they are simply designing what they are told by upper management.

Industry Wide Issues

And sadly, this isn’t just an Xbox problem. Many will point to Xbox and a lot of the decisions they’ve made since the acquisition of Activision, and rightfully so, but it’s an industry wide issue. PlayStation has cut many jobs and studios in the last few years and cancelled games. EA, Square Enix, Ubisoft, Embracer Group….the list goes on and on. 

The industry is in major turmoil as it struggles to grasp the growing costs and challenges of the gaming landscape. Gamers are buying and playing less games as they get sucked into games like Fortnite or Apex Legends for years on end.

While revenue grows it becomes increasingly difficult to have your game stick out from the crowd. It definitely happens, don’t get me wrong. We’ve seen games like Clair Obscur: Expedition 33 flourish. Maybe the answer really will be smaller teams and smaller budgets.

Whatever the case is, and how the industry figures it all out remains to be seen. But it’s clear things will change and there will be a lot more hurt from the big studios before it gets better.

Where Does This Leave Xbox?

Now that the dust has settled a bit and all the hot takes are winding down, we can take a look at where this leaves Xbox. Social media is a never-ending revolving door of “Xbox is dead” and “Xbox is great” takes. After this week we are currently in the “Xbox is dead” stage, but that will change in the coming weeks. Heck just yesterday Helldivers 2 was announced to be coming to Xbox causing a different kind of shitstorm online. 

Ultimately, if you take a moment to step back from the hot takes, there still is plenty to be excited about from Xbox. They’ve had a solid year in terms of games already, with many more scheduled to come.

Xbox has already stated that everything shown at their June showcase is still in development. That means we will still see Grounded 2, Gears Of War: Reloaded, Keeper, The Outer Worlds 2 and Call Of Duty Black Ops 7 this year.  

They are already planning on making 2026 a banner year for the company with it being the 25th anniversary of Xbox. Phil Spencer has said we can expect to see all their pillars next year, with Gears Of War: E-Day, Fable, Halo and Forza Horizon all expected. In fact, Matt Booty said they have 40 games in active development at the moment. New hardware is confirmed and the Game Pass lineup still looks incredible. As I said, still plenty to be excited about. 

But that doesn’t mean fans shouldn’t be upset. This week was rough no doubt about it and fans should voice their displeasure with these decisions. I personally was really looking forward to seeing what Rare would cook up with Everwild and I’m not happy I’ll never see what it turned into.

I don't think the corporate side of Microsoft will ever truly understand gaming so I don't think this will be the last major cut. Hopefully Phil and co can at least help them see it a bit more but frankly I'm not holding my breath on that.

Make your voice heard as always, just try and sort through the drama that is social media and take a step back and look at the total picture when you do so.