I don’t think anger is the right word to describe today now that the news is broken and frankly this is like an ongoing story. It seems like there’s potentially more cancellations and studio closures we’ll learn about in the coming days. But anger really isn’t the right word. Maybe because it was so expected and there were so many warning shots fired off. I think the right term for me is just immense disappointment. Uh the leadership core at Xbox has absolutely failed these teams. Not because we’re talking about canceled projects and what could have been. In some instances, these projects that were shut down because they’ve been in development for so long do make sense. But it’s the reality that the leadership core did not recognize these issues were building up over time and they probably should have shut these projects down earlier to get something else out the door quicker. But instead, we’re left with the bloodbath that’s happening at Xbox today. We have a note from Bill Spencer to go over, a ton of projects that have been cancelled, and a studio shutdown. It’s a really sad day for Xbox, but I think potentially what makes me more sad is seeing people continue to treat these gaming companies like sports teams. It’s totally fine to love Xbox, right? Like I adore Xbox. I grew up with it. It was like my first real console when I think about it. I did have an N64, but I remember going out to Best Buy with my dad and buying it. It came with NFL Fever. It came with Oddworld Munch Odyssey. Like I have strong Xbox memories right down to the core of my childhood. I was always an Xbox guy growing up. There is a way to separate the two and to stop cheering, especially for this brand like a sports team and jabbing back and forth in this console war [ __ ] It’s awful, man. And look what it’s led us to because we continue to hear as we’re reading this note, we’re doing great. We’re doing great, but we’re laying you off. Ridiculous. So, let’s read this tonedeaf letter from Phil Spencer and then get into the tough news. Today, we are sharing decisions that will impact colleagues across our organization to position gaming for enduring success and allow us to focus on strategic growth areas. We will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days. So, like I said, still an ongoing story. And the other thing worth noting here is they’re clearly trying to obuscate the information as best they can because I think this is much worse than we already know. That is my read of the situation. And there’s a reason why it’s being staggered out and it’s not one fell swoop. There’s a reason why they’re trying to spread this out because I think it’s a lot more than we understand. Continuing on, I recognize that these changes come at a time where we have more players, games, and gaming hours than ever before. No note on sales, by the way. Our platform, hardware, and game road map has never looked stronger. The success we’re currently seeing is based on tough decisions we’ve made previously. We must make choices now for continued success in future years. And a key part of that strategy is the discipline to prioritize the strongest opportunities. We will protect what is thriving and concentrate effort on areas with the greatest potential while delivering on the expectations the company has for our business. This focused approach means we can deliver exceptional games and experiences for players for generations to come. Prioritizing our opportunities is essential, but that does not lessen the significance of this moment. Simply put, we would not be where we are today without the time, energy, and creativity of those whose roles are impacted. These decisions are not a reflection of the talent, creativity, and dedication of the people involved. Our momentum is not accidental. It is the result of years of dedicated effort from our teams. HR is working directly with impacted employees to provide severance plan benefits including pay, healthcare coverage, and job placement resources to support their transition. Employees whose roles were eliminated are encouraged to explore open positions across Microsoft gaming where their applications will be given priority review. This is exactly from the second paragraph down the Microsoft experience. There’s a reason why they’re a $3 trillion company. They make a lot of money and then they make cuts and they make even more money to give themselves an even bigger earn. That is how they operate. So literally the blatant admission of we’re laying you off but you can come back probably under a contract so we have to pay things like benefits to you and we’re going to save more money and get the same talent. This is how Microsoft has operated. Now the hope was after what happened with Halo Infinite they would have learned to not do this because it doesn’t work well in video game development. But nonetheless here we are again to me incredibly tonedeaf. Gets worse though. Bloomberg reports Microsoft makes deep job cuts across Xbox Division cancels games. Subsidiaries across the gaming organization were told that they would be affected by layoffs. Microsoft’s Stockholm-based King division, which makes Candy Crush, is cutting 10% of its staff or about 200 jobs, according to people familiar with the plans. Other European offices such as Zenamax also began cutting employees early Wednesday, said the people who asked not to be identified because they were not authorized to speak to the press. News of further job cuts trickled out slowly as other units of Microsoft gaming such as Call of Duty maker Raven Software also announced workforce reductions. We’ll talk about Zenamax in just a moment here. Uh, Candy Crush is crazy because what’s interesting about these layoffs is seeing Xbox target big money makers. Call of Duty, you know, King with Candy Crush. This is one of the big reasons they bought ABK was the money they get from both of these and they’re laying off staff attached to these. And my heart goes out really to Raven Software. Such an unjust amount of layoffs because they are to me the the heartbeat of what makes Call of Duty exciting, at least for fans like me, cuz they’ve done the last two campaigns. They did Cold War, they did Black Ops 6, and I think they’re both excellent. If you look at the history of Raven Software, I don’t think they’ve ever made a whack game. So, I just was hoping when Xbox bought them up that this would be a company freed from the shackles of Call of Duty. Instead, they’ve been tied closer to it and laid off, like forever cementing their status as a Call of Duty support studio. Again, just really messed up when you look at the whole spectrum of games they’ve made. Singularity being excellent here. The company also canceled several projects that had been in development for years, including the fantasy game Everworld in development at UK-based Rare Studio, and an original new online game from ZMAX Online Studios, the makers of Elder Scrolls Online. Both of these studios will cut jobs as a result of the cancellations according to people. And if you want to know just how prepared they were for these layoffs, Jason Shrier reports on his own Blue Sky account. As one illustration of just how sloppy and chaotic today’s mass Xbox layoffs have been, some employees at Zenamax Online Studios are now watching their Slack accounts abruptly get locked out. No message from HR, no word on whether they still have a job, just an ominous Slack deactivation. So, yeah, very classy there. All right, so Zenamax Online Studios, new IP and Ever Wild at Rare. Let’s start off with Zenamax Online Studios. Um, this one sucks, man. I I mean, you’ve heard me in the videos. I was cheering for this team so hard. I did a retrospective recently on Zenamax Online Studios with Elder Scrolls Online and just talked about how much I love that game and how impressive I think it is to have a team that’s not Bethesda Game Studios take that Elder Scrolls IP and make something that feels really worthy of that name, especially when it’s such a dramatic shakeup. You know, I look at Fallout 76 to the rest of the Fallout franchise and then ESO versus the rest of the Elder Scrolls franchise. And I think the way it just blends in perfectly, mostly thanks to its world, but also the hard work that team put in. They earned their right to go and do something on their own. Now, we don’t know what the status of the project was. We don’t know if they were really in development hell, but they kept hiring up for this game. It was like 400 plus people working on it for five plus years. And so, it could have been one of those projects that we’ll talk about with the initiative in Perfect Dark where it’s spinning its wheels for a while and it’s still years out and the investment might not be worth it. But, as a fan of Zenomax Online Studios, my heart goes out to them. Uh, this like was one of the games that I could not wait to learn more about because I think they learned so much with Elder Scrolls Online. And I don’t think it’s the worst fate to be just tied to Elder Scrolls Online, but it’s really cementing them as only doing that. And I just wanted to see them break free. What could they do on their own? Uh, to know that that’s no longer going to be the case. To know that Zenamax Online Studios is just forever the ESO developer. They rolled in teams that they shut down for Bethesda like Alpha Dog and Roundhouse into Zenamax Online likely to help accelerate what was happening with this new IP. The amount of investment and resources gone into it, uh, just a real story of what could have been. And I hope we do get a scoop on this cuz I’m so curious what exactly it was, but what led to its cancellation because it is the one admittedly we’re most in the dark about. He never got an official announcement. And I know a lot of people justify these things like game cancellations happen all the time, but this bad boy leaked years ago. Uh, and I thought any day now we’d get a reveal for it. You’ve saw my Xbox showcase predictions videos. Like I called it, I think, two or three years in a row. Certainly, this has to be the year. I guess now it makes a lot more sense since it was on the brink of cancellation. But how just was it? This is a trend since Xbox bought ABK, going back to Odyssey, the Blizzard survival game, where if you’re a game that’s been in development for six plus years, you’re getting the axe. That gets into Everworld. Ever Wild was announced in 2019. Definitely one of the biggest Xbox mysteries, but also a game that people were cautiously and understandably excited for. Rare has something with Sea of Thieves, but Rare is not known for games like Sea of Thieves. Now, just kind of like with ESO and Zenamax Online Studios, it looks like Rare’s identity is going to exclusively be for a long while Sea of Thieves, what we’re getting into and why these layoffs and studio closures and game cancellations are so unfortunate to me is not just because of what could have been, but also the message it sends. It sends the message that this is like a stagnant company. This is the status quo moving forward. You get your Sea of Thieves from Rare and that’s it. You get your Elder Scrolls Online from Zenamax Online Studios and that is it. And there is not that excitement anymore of, oh, Xbox and Microsoft with all this money and buying these teams that have so much potential. What could they make out of it? They’re taking the safe choice every step of the way to create this quote sustainable business, which is hilarious given the profits that they’ve seen, not just in Xbox, but Microsoft as a whole, that this is how they’re trying to make things sustainable by taking less risks. And I don’t think that makes gaming better. But Ever Wild does fall in that category of unsurprising. But this also goes to how I open the video. This is where I think leadership failed Ever Wild and rare. It’s clear from the outside looking in. This wasn’t working out. You don’t reveal a game in 2019 and disappear until now and things are going well. Things are exciting. We’re making a ton of progress. That is just not how it goes. It is up to the leadership team to identify this issue and be like we need to figure something else out now start from scratch or retool repivot whatever it may be. That is my read of the situation is how leadership has failed a lot of these teams to readjust them or reorient them. And there’s another great example of that in turn 10. Jason Trier posts on blue sky. Many of Xbox’s subsidiaries are getting hit by layoffs this morning including Call of Duty studios such as Raven. Big cuts at Forza Motorsport developer Turn 10. nearly half of the staff per a source half of turn 10. Do you realize how unbelievable that is? Fortune Motorsport has been while it’s not like the sexiest game or certainly not a game I play much or talk about has been part of the Xbox identity since like its very beginning. And the idea that Turn 10 has been reduced so much that it just might, we don’t know for sure, but it just might be like a support team. It might support say something like forts of Horizon 6. It’s what I talked about in our video last week when the layoffs first started to leak. I said I feel like Turn 10 is going to be an easy target simply because when you look at what Horizon is versus the last motorsport, it’s it’s sad to say, but I think Horizon’s laped motorsport. So, you get it. But at the same time, what’s so frustrating is this is a hits only business. And I don’t think that is sustainable at all. By that, I mean, you look at Turn 10, they’ve consistently, look at their Metacreditit score. Ryan McAffrey had a great post on his Twitter account. They’ve never made a bad reviewed game, but Fortza Motorsport, the last one in 2023, did not really light the world on fire in the terms of player count, in the terms of sales. And despite all that heritage and all they’ve contributed to the Xbox business, it took one miss for them to just get half their staff removed. In a sense, I get it because Forts Horizon’s a thing. And it seems like we’re getting Fors Horizon 6 next year, but man, it sends a really bad message if key studios like Turn 10 are getting half their staff removed, likely reduced to a support role. Then I look at other companies like Compulsion, which we haven’t heard anything about, or Ninja Theory, which we haven’t heard anything about. Games that were more prestige pieces, smaller games, and had really bad player counts. What happens to them? Even if it’s not now, this year, what happens next year, the year after? That is the message that is being sent here. And speaking of messages sent, let’s go over to Windows Central where they write, “Microsoft is closing down Xbox studio the initiative with Perfect Dark killed as well, joining Ever Wild and Zenamax’s new IP and other unannounced projects.” Quote, following Phil’s note, by the way, this comes from Matt Booty. I want to share more about the changes to the studios business units. We’ve made the decision to stop development of Perfect Dark and Ever Wild, as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, the initiative. These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape. We did not make these choices lightly as each project and team represents years of effort and imagination and commitment. Our overall portfolio strategy is unchanged. Build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters. We have more than 40 projects in active development. Continued momentum on title shipping this fall and a strong slate headed into 2026. For those directly affected, speak with HR yada yada yada. To everyone across our studios, thank you. Your creativity and resilience continue to define who we are. I believe in the strength of our teams and the direction we are taking on the path ahead. Yes, quite the path. Four rounds of massive layoffs in 18 months. And I actually put out a tweet. So, let’s go down the receipts here and have a little fun at just how great this leadership core has been since they bought ABK and finalized that deal. You have the Initiative that closed down. Perfect Dark got cancelled. Ever Wild got cancelled. Zenax Online Studios new IP got cancelled. 50% of Turn 10 is gone. 10% of King is gone. There were layoffs at Raven Software. Arcane Austin closed down. Tango was nearly lost forever. Fortunately, Craftton saved them. Alpha Dog Games closed down. Roundhouse closed down. And Blizzard’s Odyssey cancelled. And to add on top of that, Sea of Thieves and Banjo Kazoui director leaving Rare after 35 years following the Ever Wild cancellation according to sources at Video Games Chronicle. Zenamax Online Studios president Matt Ferrer is leaving the company according to Insider Gaming. So, not only is Xbox bleeding games, bleeding studios, they’re bleeding talent. More importantly, the talent that made these companies worth buying to them in the first place. And that is the story that will haunt Xbox for years to come. It is not just about the canceled games today. Don’t think now in the near term. This is about long-term talent loss that made these companies who they are going away and in turn they will be shells of themselves. That is with no disrespect to the people who do work at these teams still. It’s just saying that hey, when you have someone who’s there for 35 years, that’s a really important member of the team you probably want to keep. Again, this gets back to what I’m saying earlier. You’ll notice a trend there of a lot of these games that were shut down or studios that ended up being closed were attached to games that have been in development for a long while. But you got to bring a pair of scissors to some of these games and hit the reset button. I think a great example of that is how Sony and PlayStation have completely mismanaged Ben Studio and how Ben has spun their wheels for so long since Days Gone and all they had to do was make a Days Gone sequel, but they haven’t gotten that opportunity. they had to make like a God of War live service game and then all the stuff that they made before ended up being cancelled. So, it’s just greatly frustrating. So, Perfect Dark, uh, this is really disappointing because it just feels like the immersive sim genre is dead. And I thought the slice we saw of Perfect Dark looks really good. I remember my reaction immediately being, okay, you know, let them cook. This looks really good. And there was part of me that did watch that gameplay a bit with a eyebrow raised of is this real? And I think this cancellation and shutdown confirmed something to me. Again, just a complete assumption here. But it seems to me like that was just a really nice polished vertical slice. Everything surrounding it was not good to go and this project probably needed more than another two to three years to get out the door. And why this is all happening is in a hits only business or when your management lets you spin your wheels for so long and your budget gets higher and higher and higher. This is not rocket science to any of us on the outside. Yeah, you’re going to end up having budgets that are skyhigh and that puts pressure on the product to perform sometimes in very unrealistic ways. Like I think Perfect Dark had a ton of potential, looked great. I think it would have spoken to the immersive sim fans out there provided it delivered on what we saw in that vertical slice. But how would it have done long term, right? We have the initiative that starts from scratch is like an all-star team of talent. That whole squad pretty much leaves and then they start replacing that team. I think over half that team left and I remember covering and being very like what’s going on here is not okay. Remember the Xbox fans out there like breathing down my neck and borderline harassing me over it. I backed off. I went okay let’s see how it goes. They bring in Crystal Dynamics because the head of that studio at the initiative originally worked at Crystal Dynamics. I went, “All right, this makes sense. This should help the project.” We see a little bit of an update at the showcase. I go, “All right, looks like it’s on the right track.” And then we see this. Clearly, it wasn’t ready to show. Why do that to yourselves? But also, I think if you invest in a team building it from the ground up and most of that team leaves before you have anything to show for it, I do respect the idea of holding on trying to make it work. But there is the idea of the sunk cost fallacy that many of us are familiar with. It’s just not worth continuously investing in something that isn’t working. it’s time to pivot. But instead, we keep trying to brute force Perfect Dark and trying to make it work. And here we are now with no game to show for it. Oh my god, thousands of dollars wasted. And of course, worst of all, a ton of people with nothing to show for it, no jobs, and a lot of wasted time. It’s frustrating. And as I’ve said before, with these mass layoffs, how do you expect people to want to get into game development, especially when you don’t see accountability at top, whether it be Xbox or Bungie, and the list goes on. When these layoffs happen, you see who’s making the statements. It’s pathetic. There’s literally no accountability. And the people who make these experiences worth having. The people who make the Xbox brand what it is are the ones who always take the fall. I think the saddest part about these layoffs, as I’ve said numerous times, and I’ll say it one final time, is how avoidable some of this could have been with proper leadership and oversight and actually understanding just how [ __ ] of a spot these projects were in. Because I think as fans, we know no updates and no news doesn’t spell anything good. And when, say, for example, Ever Wild, the game announced in 2019, has no updates for over half a decade, that usually spells disaster. Probably if you’ve gone two or three years and nothing’s really happened, that spells disaster. But will things change? No, clearly not. That’s the sad part. Clearly not. And that sends a message unto itself. And I don’t know how you start to build new gaming talent outside of people who are ridiculously passionate um when when this is kind of the fate they’re subjecting themselves to. I think just operating gaming as a hits only business is stupid and project management needs to be better. That’s all I got for you. I’ll see you in the next one. Stay sexy. Stay active. I love you all. Peace.