Asha Sharma's shakeup of Xbox started in earnest today - with a wave of layoffs. Despite initial fears, these layoffs have not resulted in any studio closures, but there are at least two studios that are being "released" by Xbox without a new owner to take them on, leaving their futures uncertain.

To put this all into perspective, you only need to see what this means for all of the studios that were acquired under the previous CEO, Phil Spencer's, leadership. Counting previous studio closures and this new wave of companies being sold off or made independent, Xbox has now lost roughly a third of the studios that it bought up under Phil Spencer, and most of those that have remained part of Xbox have been hit with significant layoffs.

Two-Thirds Of Phil Spencer's Acquisitions Are Still At Xbox, But They're Not Faring Well

via Bethesda

The following studios that were acquired by Xbox under Phil Spencer are, for one reason or another, no longer part of Xbox:

  • Ninja Theory - Sold to an unknown buyer, confirmed today
  • Compulsion Games - Independent, confirmed today
  • Undead Labs - Sold to an unknown buyer, confirmed today
  • Double Fine - Independent, confirmed today
  • Tango Gameworks - Closed in 2024, later bought by Krafton
  • Alpha Dog Games - Closed in 2024, later reopened independent
  • Roundhouse Studios - Closed in 2024
  • Toys for Bob - Independent as of 2024

Xbox also shut down Arkane Austin in 2024. Arkane as a whole remains open, for now, but that is likely to change; due to French labour laws, Xbox has begun the "required consultation" period before it can make layoffs or close the studio.

Of those that remain, many have been impacted by layoffs both past and present. We're already hearing that Obsidian and Bethesda have been hit, making up some of the roughly 3,000 job cuts across Xbox. Both studios were also acquired under Phil Spencer.

It remains to be seen where Asha Sharma's priorities lie. She's currently saying that Game Pass is still a priority, and it's being reported that the Bethesda cuts are in aid of getting the team to focus on new Fallout and The Elder Scrolls games. However, it's hard to see how the studio can focus on these huge sequels with fewer workers. As for Game Pass, there are now fewer studios that are compelled to put their games on the subscription service, and State of Decay 3 might not make it on there after all, now that it's been sold off.

All eyes will be on Xbox this week as we wait for more details to come out. What is clear, though, is that thousands of developers are losing their jobs, and the old vision for Xbox is well and truly over.

Microsoft

Date Founded April 4, 1975 CEO Satya Nadella Subsidiaries activision blizzard, Microsoft Studios, Mojang Studios, Microsoft Game Studios, Xbox Game Studios Consoles Xbox, Xbox One, Xbox 360, Xbox One X, Xbox Series X, Xbox Series X|S Services Xbox Game Pass Headquarters Redmond, Washington, United States Expand Collapse