The as of now not so jolly green giant Microsoft Xbox just pink slipped about 9,000 people July 2nd 2025 they axed the long teased Perfect Dark reboot shuttered the initiative and quietly nudged a Rare’s decade in the making Ever Wild into an unmarked grave they’ve been digging for god knows how long. It is unfortunately the bigger and better sequel to last year’s Carnage when Xbox decided that Hi-Fi Rush their massive hit was warranting of closing the studio and Redfall was Redfall. There was nothing that really could have been done about forcing a studio that makes immersive sims to make a stupid live service heap of vampire nonsense. Oh, except maybe not forcing them to do that and then complaining when it doesn’t work. Uh, I mean, that was kind of a built-in ZenMax problem, but still, nothing says we believe in the power of our studios like closing them. While Phil Spencer insists he’s not retiring anytime soon, the new Xbox strategy looks a lot like if you can’t beat them, publish on their platform, Hi-Fi Rush, Sea of Thieves, Pentiment, they’re all sailing onto Sony’s turf, and Hellblade 2 is hot on their heels. Meanwhile, Game Pass has stalled at 35 million subscribers. Not a number to shake a stick at, but it hasn’t been growing, and it’s needed to grow. So, Microsoft decided, you know what? Let’s start partnering with people to make third-p partyy handhelds. Oh, and they won’t play the entire Xbox catalog, just PC games that you don’t need Xbox for. Yeah, a lot of head scratching going on. This is a long intro, but in order to set it up, there’s a lot to say. It feels like we’ve been asking this question a lot, but uh well, hi folks, it’s Falcon and today on Game Ranks, we are again perhaps more fervently and more seriously asking the question, what the hell is going on with Xbox? All right, so the last year hasn’t been kind to the Xbox brand with the whole Xbox Everywhere initiative and the many concerning rumors that we’ve been seeing coming out of Microsoft regarding the future of Xbox hardware. But it seemed like things were kind of on the upswing after Xbox strong showing at Summer GameFest. That positivity has all but evaporated with the devastating news from yesterday I mentioned at the top. You know, over 9,000, yes, over 9,000 people employed at Xbox have been laid off. And and Microsoft, could you have at least not not done the meme? I don’t want to laugh about a bunch of people losing their jobs, but multiple studios have been closed for good. Some highly anticipated games have been cancelled. Cuts and layoffs are hitting everywhere, even successful areas like Turn 10. And even studios working on freaking Call of Duty. It appears that nothing and no one is safe in this major round of firings. Keep in mind, we’re talking about the fourth major wave of firing in the last 2 years. Ever since acquiring Activision Blizzard, it has just been a bloodbath for all involved. This latest thing is a step beyond though. It’s not just support staff or QA or redundant management or whatever excuse they came up with for the last ones. This time, Xbox is coming for your job. Whether you’re in a studio trapped in development hell or in one of their best studios with hits coming out of it. In late June, we actually heard uh rumblings about potential mass calling of jobs here. And on the 2nd of July, the hammer came down. It wasn’t just Xbox. It was all of Microsoft. Is about 4% of the entire Microsoft workforce, which is, to be clear, insane. The initiative the studio formed to work on the Perfect Dark reboot was entirely shut down. The Perfect Dark reboot has been cancelled. I mentioned Rare’s Ever Wild as well, cancelled. According to insider sources, the cancellation of Everworld is actually leading to the game’s director Greg Males, a 35-year veteran of Rare who worked on games as far back as Donkey Kong Country, Banjo Kazouie, and Viva Pinñata. Bolting just like, you know, if you’re if you’re doing this, I’m g I’m out. I’m out, guys. I mean, this is just one person among thousands, but I wanted to highlight him cuz he is an elder statesman of the games industry. And Mal’s exit from Rare is one of the last nails in the coffin for classic Rare. Almost all of the old guard from that studio are just gone. And it’s it’s sad to see him go. It’s a tough time to be a Rare fan right now, honestly. But in all seriousness, it’s not just Rare, it’s everything Xbox. Even King, the mobile game developer and massive money maker for Xbox, is getting like 10% of its studio cut. Raven Software and Sledgehammer are getting hit with some layoffs. a new IP that was going to be a new MMO from the Elder Scrolls Online guys cancelled and that’s far from the only thing getting canned at Bethesda. Uh, reportedly there are multiple unannounced projects that have been cancelled. Even John Romero, the influ influential co-creator of Doom was not spared Xbox’s well, I guess you could say wrath, but I don’t think this is wrath. As somebody who loves video games, these job losses are brutal. and hearing about all these potentially amazing games getting cancelled before their time, it’s super disheartening. I’m not really a console wars person. I like me some PlayStation. I like me some Nintendo Switch. And I like me some Xbox. But as such, I am an Xbox fan. And it’s hard not to feel like the sky is falling after all this news. So, what does Phil Spencer, the head of Microsoft Gaming, do? Why put out a tonedeaf internal message that sounds more like a press release for shareholders than anything meant to address concerns or help with what is I mean an absolutely bottom of the barrel morale situation. No doubt this entire statement is so so freaking pathetic. It is pure corpo garbage that inexplicably acknowledges all the job losses while at the same time saying, “I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before. Our platform, hardware, and game road map has never looked stronger.” What the [ __ ] is wrong with you, Phil? I’m sorry to curse, but what is that? What is that? I’ll tell you what it is. He’s trying to call them investors while addressing the issue for remaining stab and it just comes off as fake as [ __ ] We’ve all been willing to give Phil a shot the last few years cuz things have been tough. I’m not going to pretend that things are not tough. It’s getting harder and harder for anybody out there in them streets, but it’s also getting harder and harder to see his run as the leader of Xbox as a freaking disaster. Going from the top of the industry to what is essentially a third-party publisher in just over a decade is something basically only Sega can truly identify with. Like the Genesis was just I mean it did what Nintend don’t. And the Xbox 360, yeah, it had some pretty big problems to overcome, but they did right by consumers and that built the brand in a massive way. It’s arguable that the Nintendo Wii won in terms of pure sales, but culturally speaking, the Xbox was the winner. Right now, a lot of homegrown Xbox franchises dead in the water, floundering badly. The Division is entirely propped up by their third party purchases of Bethesda and Activision. And even then, it seems like, at least right now, the purchase of these massive studios is hurting them more than it’s helping Xbox. Like, look at how many cuts are being targeted at Bethesda and Activision. It’s not just Microsoft stuff here. It’s across the board gaming division stuff. With how things are going at Microsoft, along with all the reports we’re hearing at EA and jobs getting cut there, it’s hard not to feel like the bottom is falling out of the US games industry. If this really is the beginning of the end of the US dominating video games, it’s at least partially a self-inflicted wound fueled by reckless consolidation and tech industry greed, buying up everything they can without actually understanding why people buy video games. It’s honestly completely infuriating. But the it’s the narrative that’s being built. It’s not just the US games industry. Honestly, there’s reports that video game spending is just down across the board. After COVID, all these companies bet on infinite growth, but hey, remember how we were all stuck indoors and the best thing to do with that situation is play video games and now we aren’t all stuck indoors anymore? Oh, there’s a shock with these people thinking that the disease was going to keep us inside for like that wasn’t the new normal. It was a an aberration in human history. That’s not how human history works. I know people like 28 years later, but but that wouldn’t happen, man. Not just the whole zombie aspect of it, but like they die out. The zombies starve. They can’t think. They just do rage [ __ ] and eventually you run out of energy. That’s how diseases work. They become less as they spread antibi. We don’t need to get into it. I just can’t fathom the reaction from all these companies that because we’re in a pandemic and we’re locked down and everybody’s playing video games that that’s how it’s always going to be. I just can’t fathom that. There’s no set of information that implies that. And yet, woof gez. And the younger generation is literally getting priced out of their own hobby. Games that casual audiences might actually want like Perfect Dark, they’re not getting made. And Halo is not out of the woods. Who even knows what’s going on with 343 right now? I know this is a real downer, but it’s pretty hard not to be frustrated with this news. If there’s something I can say to counteract the negativity, it’s that Xbox isn’t dead. All the news that’s been dropped the last few days is bad, but that doesn’t mean it’s over. It means there’s some major reshuffleling going on. They do still have more than 40 games in development. There’s at least one more Xbox console in the future, probably. At least that’s what we’re hearing. Game Pass isn’t going to go away. 35 million subscribers is a lot. It’s maybe not the license to print money Xbox and Microsoft hoped it was, but 35 million subscribers is a success. They should hold on to that cuz that’s, if I’m not mistaken, the current game subscription service that is successful. Like if there’s a Netflix equivalent, it’s Game Pass. So, the news isn’t all bad. It’s important to keep in mind that even with all these internal issues at Microsoft, they’re de facto still the number one games publisher in the world. That is because they own both Bethesda and Activision. But still, Xbox isn’t going anywhere. And yeah, it’s easy to lay the blame on Phil Spencer and certainly he does deserve plenty. Sarah Bond, the president of Xbox, and Max Booty, the president of Gamecomp Studios, they deserve some blame here as well. But I do want to say this. At the end of the day, they are also just cogs in the Microsoft machine. Phil still has to answer to Satia Nadella, the CEO and chairman of Microsoft. And you better believe that it was probably him and not Phil that was pushing for the reduction in staff. Phil’s just caping for it. Unfortunately though, at the end of the day, Xbox is a small portion of Microsoft’s frankly massive empire. The successes and failures of that division are just a drop in the bucket compared to the revenue that the other divisions bring in, which is an important and humbling reminder of just how seriously the company takes the division, which appears to be not that much. In the past few years under Nadella, it’s felt like the sword of Damocles was just hanging over Xbox waiting to fall. We have no idea what’s going on behind the scenes. It’s all pure speculation, but it it literally just could be that rather than a string of bad decisions. I don’t know that I would say it’s that, but Phil could have been trying to stave the inevitable off for the past few years, just trying to keep the gaming division alive when the vultures at Microsoft’s other divisions are circling. I want to note that this is possible and probably some of the explanation at bare minimum. But it’s also not to say that the Xbox team hasn’t made serious blunders. The way they’ve handled their internal studios like 343, the coalition and the now closed the initiative has been a disgrace. Xbox was handed some of the greatest IPs ever, like Halo, Gears of War, and yes, Perfect Dark. There was major potential there, and they squandered it with poor management. We’ve been quick to praise Microsoft’s hands-off approach to game development in the past, and it’s led to some amazing stuff, especially from Obsidian, who are proving to be the MVPs of the entire division lately. Seriously, you know who I haven’t had to mention up till this point in the video? Obsidian. That is of note, to say the least. But in the case of other studios management like of Halo and Gears specifically, maybe a little more hands-on would have been helpful. If they had, maybe the Initiative wouldn’t floundered for nearly 10 years with basically nothing to show for it with Perfect Dark. Like, I’m sorry, but it’s not that hard to make a Perfect Dark game. You could literally just reboot it and do the first game’s plot with some changes, and I think everybody would be pretty psyched as long as it turned out well. Like it doesn’t even really have to be original as long as it does what it’s supposed to do and adds enough that it’s not just the same game again. Like the initiative was formed in 2016. They’ve had basically nothing but for some vertical slices according to reports. Compare Microsoft’s handling of their studios to someone like Nintendo who’s very hands-on. Some developers buckle under the pressure. Yeah, I’ve seen reports retro studios really struggled with Nintendo working on Metroid Prime, but at the end of the day, it’s an all-time great game. With Xbox, it’s 10 years of nothing followed by cancellation. And that’s always been a problem with Xbox to a certain degree, but this slow, gradual transition from major hardware competitor to third-party software, developer, publisher, whatever. It’s sad to see. Maybe in Microsoft’s eyes, this is a more profitable direction to take things, but as a gamer, it feels like the mighty have fallen. It feels like the industry itself, the hobby, not necessarily Xbox, but this is a huge pillar of the gaming industry that is crumbling. I told you I am not a console wars person. Seeing this happened to a big company that was this successful, which technically has a much bigger company behind it that up until this point has just been willing to fund it to no end. I mean, I if you don’t see something in those tea leaves, I I don’t know if you’re looking. That doesn’t look good. Like, I will say it could be an economic response, the postcoid dip, and it may eventually even out. Maybe all this doom and gloom around Xbox is unwarranted. Maybe they had to make these moves and this is stuff that will end up working out in the future. I don’t know. But as an oldtime game bird, someone who’s watched this happen to Sega and now is watching it again with Xbox, but now in a completely different economic climate, seeing how things have been going the last few years just really sucks. I don’t really care about Microsoft’s bottom line. I care about video games. Um, in the case of this situation, I care about Xbox games and positive feelings I’ve had about the original console and all the amazing games back on the 360. But more and more, The Division feels less like that Xbox and more just Bethesda and Activision because they’re really doing the lion share of the game publishing now. Almost all the old stalwarts at Xbox, the games that put the console on the map, they’re seemingly dying. I hope that’s not the case. I hope Halo comes back bigger and better than ever. But right now, that possibility feels very distant. So, to answer the question, what the hell is going on in Xbox? What the hell is up with Xbox? What the hell is this? Well, a lot of people are getting fired and some highly anticipated games are getting cancelled. Unfortunately, the vaporware nature of both Perfect Dark and Ever Wild means that the cancellations are probably justified. These were probably money holes. That doesn’t make it not sting, though. What really sucks is the loss of all these other unnamed games from Bethesda, including a new IP from Zenamax. It all just looks really bad for Xbox on the whole, but this was the inevitable result of their purchase of Bethesda and Activision. Like that’s how industry stuff works. Jobs are going to get lost. But I don’t know if anybody really predicted how bad this was going to get. The cutting around 50% of the staff at Turn 10, the guys behind Forza is especially brutal, as are the cuts at Call of Duty developers like Raven and Sledgehammer. I mean, Call of Duty is basically a license to print money now. Like, that’s not changing either. It doesn’t have any evidence of changing. So if you think anyone would be protected, it would be them. It’s a bloodbath across the board. And things might sound really bad. Xbox, unfortunately, whether they deserve to or not is going to weather the storm. What Xbox is going to be after the storm, I have no idea. But Microsoft is a monolith. They’re basically untouchable in the tech space. And at least for now, it seems like there’s interest in keeping the gaming division alive. Otherwise, it wouldn’t be, you know, a percentage of layout. They could just shut the whole damn thing down. I don’t know. Maybe in the future, we’ll look back and see this as another step in the decline if Xbox has started all the way back in 2013 with that embarrassing Xbox One reveal. Or maybe not. I hope things stabilize, not just for the future of Xbox, but for the future of gaming and the developers and workers that are still with the company. And hell, the developers and workers that aren’t with the company anymore. There is a serious problem if Xbox is facing the need to cut at this rate. That has implications beyond if they keep their job at Xbox. Are there going to be jobs elsewhere to get? There’s a lot up in the air right now. Morale has got to be at rock bottom at the company, too. Hopefully things improve for these guys and they’re able to make great games cuz that’s what’s matter what matters, right? That’s what we all hope happens. What do you think? Leave us a