Microsoft's Xbox division is preparing for significant layoffs and potential studio closures due to rising costs and an overburdened studio system. These changes are part of an 'Xbox reset' initiated by new CEO Asha Sharma, aiming to address a 3% accountability margin and ongoing component price increases.
Microsoft's Xbox division is facing considerable financial challenges, including a reported 3% 'accountability margin'. Rising component prices due to shortages have exacerbated the situation, prompting a reevaluation of operational strategies.
A memo from CEO Asha Sharma indicates a major restructuring of the Xbox business is underway. Layoffs are anticipated next month, with at least five studios under scrutiny for potential closure or restructuring.
The restructuring may lead to the cancellation of games such as Marvel's Blade, which was in development by one of the affected studios. Additionally, IO Interactive's recent layoffs relate to a halted partnership for their new title, Project Fantasy, which was set to be published by Xbox.
While IO Interactive has not disclosed specific numbers of layoffs, they express commitment to the ongoing development of Project Fantasy. Microsoft emphasizes its focus on consolidating studios and optimizing resources amidst the reset.
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Microsoft's Xbox division is preparing for significant layoffs and potential studio closures due to rising costs and an overburdened studio system. These changes are part of an 'Xbox reset' initiated by new CEO Asha Sharma, aiming to address a 3% accountability margin and ongoing component price increases.