Rare, Sea of Thieves’ Developers, Could Face Layoffs or Closure Due to Microsoft’s Restructuring Process

One of the most discussed topics in the gaming community is the upcoming restructuring at Microsoft. Unfortunately, it is claimed that some Xbox-owned gaming studios will not only face significant layoffs but certain ones may even be shut down entirely, with plenty of speculations having been shared about this point already.

A new report from Edge representative Patrick Garratt revealed that Rare, the gaming studio known as the developers of Sea of Thieves video game, is also at risk amid Microsoft's restructuring efforts. On his Bluesky page, Garratt wrote, "Was told last night that Rare's on the block," and he also added that he describes the situation as "terrible." At this point, it's hard to predict whether this means a complete studio shutdown or a significant staff reduction, but looking back at various rumors, it seems like nearly every Xbox studio might be under threat.

Over the last few days, there have been reports that several gaming divisions, including Obsidian Entertainment, are in talks with Microsoft to avoid their closures. However, in Obsidian's case, it was denied by both the source who initially reported it and by Bloomberg’s Jason Schreier. Schreier also added that we should have a clearer picture of the situation by next Monday, July 6. It's worth recalling that previously, that five studios rumored to be affected by Microsoft’s restructuring —through layoffs or shutdowns—included Arkane Studios (Marvel’s Blade), Compulsion Games (South of Midnight), Ninja Theory (the Hellblade series), Undead Labs (State of Decay), and Double Fine (Psychonauts).

Speaking about Sea of Thieves, it was also recently revealed that Xbox is developing a movie adaptation of the title with Dustin Daniel Cretton (Shang-Chi and the Legend of the Ten Rings, Spider-Man: Brand New Day) serving as its producer.

Are you disappointed that Rare might be affected with layoffs or even shut down as part of Microsoft’s restructuring process? Share your thoughts in the comments below!