Microsoft Announced Xbox Will Lose Almost 5,000 Employees and Revealed the Fate of Several Gaming Studios

In one of his previous reports, Bloomberg’s journalist Jason Schreier stated that we will find out more about Microsoft's plans for a major restructuring on Monday (July 6), primarily affecting the Xbox division. Well, that's exactly what happened, and from what has already been unveiled, it seems the company is facing significant changes ahead.

Several major media, such as The Game Business and The Verge, have reported about the ongoing massive reorganization within Xbox. Microsoft is planning to cut around 5,000 employees across various gaming studios. Additionally, the fate of many game divisions—which were rumored to be shut down over the last few weeks—has now come to light. It has been revealed that Compulsion Games (South of Midnight) and Double Fine Productions (Psychonauts) will become independent studios. They will continue to own the rights to their own video games, and Microsoft will provide funding for their upcoming projects until they find new publishers.

As for the other gaming studios, it is reported that Ninja Theory (the Hellblade series) and Undead Labs (State of Decay) will also no longer be part of Microsoft, and both studios are already in talks with potential new owners. The intellectual property rights will also transfer to the new publishers; however, Microsoft will continue supporting the developers on Senua and State of Decay 3, respectively, with titles are expected to release next year.

Arkane Studios—the developers behind the Dishonored game series, which are now working on Marvel’s Blade has been in focus recently. There were rumors that this particular studio has a lot of chances for being shut down as part of Microsoft's restructuring, which would mean Marvel’s Blade could be canceled. However, it has now been reported that the studio will not be closed. Instead, there are plans for Arkane to have a new owner and publisher, and selling the studio by Microsoft also on the cards.

In addition, changes are expected at Bethesda, with such franchises as The Elder Scrolls, Fallout, Doom, Quake, and Wolfenstein will remain top priorities. The restructuring will also affect other areas, including Game Pass, xCloud, as well as teams involved in hardware and software services.

Meanwhile, Xbox CEO Asha Sharma also made a statement, expressing her ambition for Xbox platforms to reach an audience of one billion users every day—and she affirmed that she will do everything possible to achieve this goal.

What do you think of Microsoft’s restructuring process related to Xbox? Share your thoughts in the comments below!