// THE VERGE — GAMING
Xbox’s ‘reset’: all the news about Microsoft’s looming layoffs and studio closures
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.
That same day, The Verge and Bloomberg reported that the Xbox division was planning layoffs in July. The cuts, expected to be announced on July 6th, could include studio closures or spinoffs. The Verge’s Tom Warren reported on June 30th that Microsoft is looking at closing at least five studios and potentially canceling games like Blade.
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.
Xbox is expected to make some tough cuts soon, and it already dropped a new franchise from IO Interactive, but OD will continue to be part of Xbox’s publishing lineup, according to IGN.
IO Interactive, the studio behind the Hitman series and 007 First Light, announced that it is laying off staff after a relationship with an “external partner” on its next big franchise, Project Fantasy, “has come to an end.” IO has described Project Fantasy as an “online fantasy RPG”, and Kotaku and Bloomberg report that Microsoft, which is planning significant cuts as part of a broader “reset” of the Xbox business, was going to be the game’s publisher.
It’s unclear how many people will be affected by IO’s “staffing decisions.” The company says “we are fully committed to supporting those affected through this challenging transition.” IO also notes that it remains “100% committed to” Project Fantasy and promises that “this wonderful universe will see the light of day.”
Microsoft is set to announce a wave of layoffs for its Xbox studios and employees next week. Sources familiar with Microsoft’s plans tell The Verge that the layoffs will lead to studio closures or spinoffs, potential mergers of studios, and canceled games.
I understand Microsoft is currently weighing closing at least five studios, including the developers behind Marvel’s Blade. Sources tell me Microsoft wants to cancel Blade as part of a wave of cost cuts and job losses that are planned for the company’s Xbox gaming division.
Microsoft is increasing the prices of Xbox consoles again. Starting August 1st, 512GB models will be $100 more expensive, while 1TB models will be $150 more expensive. This means that the Xbox Series S will start at $499.99, the Xbox Series X without a disc drive will start at $749.99, and the Series X with a disc drive will start at $799.99. Microsoft also says it will be “sunsetting” its 2TB Xbox Series X.