Microsoft’s layoffs have littered the gaming landscape with canceled projects, studio closures, and veteran leaders are leaving their companies. A couple of days ago, it was revealed that the OS/game publisher and console maker is laying off an additional 9,000 staff, bringing its two-year tally to around 27,000, and the repercussion is being immediately noticed. While many who lost their jobs were in Washington state, it’s now become apparent that they a far from the only ones to be affected, with studios abroad being affected. At this point, it might be easier to identify what has survived than what hasn’t, given the growing lists of abandoned games and closures.
Romero Games
DOOM and Wolfenstein 3D creator John Romero had initially announced that his Romero Games studio had lost its funding following the layoff announcement. Ireland-based Romero Games had been developing a first-person shooter using the UE5 engine, and initially, it was hoped that the studio might find another publishing partner. However, an anonymous employee spoke with The Journal, stating that the entire staff had been laid off. The studio has approximately 100 employees who had no previous heads up of Microsoft’s plans and were totally shocked, as they had been told they were making great progress and hit every milestone on time.
“We’re trying to find other ways of funding the project,” said the employee. “But for now, it’s completely closed, and the studio is closed.”
Rare
Rare had been working on Everwild, which is among the projects now no longer in development. Veteran game developer Gregg Mayles, who has been working in the industry for more than 35 years, is (per VGC) leaving the company, which Microsoft acquired in 2002. Mayles had worked on numerous Nintendo 64 titles before joining Rare. In addition, executive producer Louise O’Connor, who also previously worked on making games for the Nintendo 64, will also be leaving the company based in Britain.
ZeniMax Online Studios
The Elder Scrolls Online developer will be losing its leader following an announcement (via IGN) from studio boss Matt Firor, who stated he’ll be leaving the company after more than 18 years of service. It was also revealed that an unannounced MMO sci-fi game, codenamed “Blackbird”, that had been in development since 2018, had been cancelled. Staff were caught off guard as the studio had begun scaling up its team, but now all have been laid off.
The Initiative
California-based The Initiative was closed. The studio, billed as Microsoft’s “AAAA” studio and comprised of veterans from Crystal Dynamics, Naughty Dog, Rockstar, and more, had been working on a Perfect Dark reboot, which had been shown at an Xbox showcase last summer. Recently, some had claimed the footage revealed then was fake, but senior game designer Adam McDonald pointed (via IGN) out that it was indeed footage from a playable section of the game, but the game was still in progress, so some things shown were not representative and were not final or completely real.
“There’s some fake stuff in it, and the real gameplay systems shown off worked just enough to look good in this video. We were rapidly making real design decisions so as to not knowingly lie to players about what the game will be. The parkour is all real, the hacking/deception is mostly real. The combat is ‘real’ in that someone had to really do all that stuff in the video, but it’s set up to be played exactly that way and didn’t play well if you played it a different way.”
King Division
Microsoft’s King Division, which is based in Stockholm, is said (per Bloomberg) will be laying off around 10%, or roughly 200, of its staff. This developer is most famous for Candy Crush.
Turn 10 and Raven Software
The Forza Motorsport developer has reportedly had to let go of around half of its staff. Turn 10 was acquired in 2018 by Microsoft, and according to one ex-employee, the studio is no longer developing anything for the franchise and has been left in a merely supportive state for the last game that was released in 2023.
Details remain scarce, but it has been confirmed that the Call of Duty developer is among those affected the Microsoft’s round of layoffs. Insider Gaming’s Jason Schreier posted on social media that it, too, was included in the job cuts, while also confirming what had happened at Turn 10.
“Many of Xbox’s subsidiaries are getting hit by the layoffs this morning, including Call of Duty studios such as Raven. Big cuts at Forza Motorsport developer Turn 10 – nearly 50% of staff, per source.”
Discussion (13 replies)
Join Discussion →It was always a matter of when, not if, with Microsoft
I feel sorry for those involved, and hopefully it’s clear now - if you get acquired by Microsoft, if you get any buyout cash or severance offer, take it and run. If you don’t, get your resume polished up and start hunting immediately
Sad, but true.
What was the strategy here, scorched Earth?
It's not something I have picked up upon with MS, usually it's EA that's famous for pulling crap like this.
Who knows, IP hoarding?
Executives are likely planning a future of fast and cheaper AI fueled development.
What we will get is a bunch of cookie cutter games, full of corporate beige.
EA only shut down studios after they released a game, not before they even had a chance.
9000 this go
6000 employees one month ago
The carnage with the gaming studios is legendary:
[URL unfurl="true"]https://www.polygon.com/analysis/610779/microsoft-layoffs-perfect-dark-everwild-mismanagement[/URL]
Last year they shuttered 4 studios, including one that had a breakout hit
This page hasn’t been updated in a couple of years but:
[URL unfurl="true"]https://techrights.org/wiki/Microsoft_-_Layoffs/[/URL]
I actually have a total of ~27,000 total over the last two years referenced in this post.
[URL unfurl="true"]https://www.thefpsreview.com/2025/07/03/microsoft-lays-off-another-9000-employees-bringing-its-two-year-job-cuts-total-to-nearly-27000-as-it-invests-in-building-ai-infrastructure/[/URL]
Microsoft is done caring about making a billion all at once... they want RMR. Expect more live services investment from them with subscriptions tied to it.
It's been a blood bath in the entire gaming industry over the last two years. It's not surprising Microsoft is reacting this way. The more surprising bit is that they waited so long to do so.
The problem is that publishers are expecting 2020 revenue streams for games with 2016 politics shoe horned into them to appease the 2% of the population that cares about that crap and as it turns out, only a small percentage of those people actually play games in the first place. We've also seen stagnation and even regression in the game space due to bad hiring practices. Developers are often less skilled than they were a few years.
Add to that bloated costs, absurd development times and Microsoft was left with little choice but to trim the fat. That's not to say every studio or game deserved the axe, but there are a lot of games in development for 5-7 years with little to show for it. When studios are often preoccupied with chasing trends, those kinds of cycles simply don't work.
I can go on and on, but none of this is surprising.
You know what everyone in the gaming industry has started ignoring all at once... card makers, game makers... just... everyone.
I hate to say it really... but it's true...
Sex Sells.
They have largely removed the 'sex' from videogames and hardware. We used to have silly marketing gimmicks and 'sexy' characters selling hardware. I mean... look at over seas products like the 'Waifu' card. The Solar blade game or whatever it was called... pretty much any MMO with staying power has bad ass sexy characters for people to play. Yet the modern market acts like that is some broken rule.
Remember Dead or Alive beach volleyball? Considered a financial success that actually probably brought MORE people to the Dead or Alive Franchise. Studios have moved away from this stuff.
Hell look at modern Anime... they still do 'fan service' and it's still popular stuff.
It's clear that 'sexy' doesn't excuse poor development, but really folks... it still generates base interest and more people will give it a shot if it at least has that and perhaps expose a greater game underneath the shiny veneer.
I'd change that to "sexy sells".
There was no overt sex in games before the crackdown on the "male gaze" has begun in the 2010s. Ironically the only game that I know of that has crude sex in it is the last of us 2, which is considered "safe horny".
So it's not that people want sex in games, we just want complex and attractive characters fighting for a just cause. But for the modern activist developer everything has to be a blob of grey. Of course people tune out when they make the protagonist an insufferable brat in a burlap sack, and try to make the clearly evil antagonist sympathetic.
I think Stellar Blade is an overcorrection, it's a mediocre game and had it come out between 2000-2015 it would have flown completely under the radar.
yea that is correct the marketing blurb was "sex sells" which is what I was focusing on of course.