With that being said, there’s always a lesson or two to be learned from adversity, and it’s always good to take a look at where things went wrong and how they can be improved. To that end, we’ve put together a list of events in the gaming world that garnered quite a response from the gaming community, and not in a good way. Let’s dive right in!

1. GTA 6 Delayed To November 2026

We’re sure you saw this one coming and thought it best to get it out of the way early. It’s always a bummer when a highly anticipated title faces a delay, and that becomes a lot worse to bear when that title has been a very long time in the making.

While we’re not going to hold a grudge against Rockstar for this one, as we suspect that the delay is only going to make the final game even better, it still rankles to know that there’s still such a long way to go before we get to dive into what we’re sure is a banger from the studio.

2. Microsoft’s Xbox Hardware Price Hikes

The Xbox hasn’t had a great run in the last few years, and Microsoft certainly didn’t help its case when it hiked the prices on Xbox consoles and a few games in May of last year. While we’re not going to get into the politics that are rumored to be behind the decision, it certainly wasn’t great news for Xbox fans in the market for a new console, with the flagship Series X’s prices going up by around 22% – a significant increase on a console whose popularity has been gradually eroding away.

However, Microsoft might not be entirely to blame for the situation; it was a choice that still didn’t sit well with many, never mind the fact that the PlayStation also saw its prices increase as a response.

3. Price Hikes On PlayStation Hardware In Some Regions

In Europe, the UK, and Australia, Sony hiked prices on the PS5 Digital Edition by around 10%, the reason given being economic turmoil around the world. It’s probably not as bad as the hike on Xbox consoles but is still quite an increase on an already pricey machine despite the excellence it brings to the table.
We’re just glad that the PS5 Pro remained unscathed through it all, and Sony probably deserves a bit of praise for managing to keep things under control for the most part.

4. Game Pass Price Increase

It wasn’t just consoles that saw unpopular price hikes, with Xbox Game Pass Ultimate becoming dearer by quite a significant margin, prompting backlash from existing and potential subscribers. Despite Microsoft issuing a statement saying that such occurrences were “never fun for anybody”, it didn’t help with stopping a string of cancellations as frustrated gamers decided to speak up against the price hikes with their wallets.

We’re just glad we didn’t have to deal with the consequences of the decision, as things certainly got nasty.

5. Sony’s PS Plus Pricing Hike

Sony’s PS Plus wasn’t safe from global economic conditions either, and the service saw price hikes in Indonesia, Malaysia, Singapore, and Thailand. Once again, Sony must be commended for restricting the fallout of turbulence in global supply chains, but the price hikes were still quite unpopular among gamers.

It’s interesting to see how Sony managed to keep things in control in comparison with Microsoft, but the price hikes did raise concerns about the value of gaming on consoles versus the same costs on a PC. That’s an interesting facet of this equation that does merit close observation over the next couple of years, and the Steam Machine’s debut might be quite a twist in this tale.

6. AI In Video Games

Generative AI made things quite complicated for a few studios in 2025, with many players and critics calling out its use in video games as a step in the wrong direction. A great example would be ARC Raiders, where lines of NPC dialogue being handled by AI received quite a bit of backlash and review bombing on what was an otherwise solid game. And we suppose there’s no need to mention the controversy surrounding The Alters, Call of Duty: Black Ops 6, and Fortnite.

7. Call of Duty Black Ops 7

While disappointment with the annual Call of Duty franchise has become something of a recurring tradition, it wasn’t really surprising to see Black Ops 7 fall as flatly as it did. The story, gameplay, and overall presentation failed to gain the momentum needed to stop the franchise’s slump, and the game has been among our worst shooters of 2025 thanks to the likes of ARC Raiders.

Some might be holding out hope that the franchise can turn things around with subsequent instalments though, but that’s looking pretty unlikely now.

8. Mario Kart World’s Hefty Price Tag

Mario Kart World was certainly incredible, and a great title to show off what the Switch 2 could do. But its pricing left a bitter taste in the mouth of those who bought it, and perhaps even put off some players who might have otherwise chosen to dive in.

While an $80 price tag on an excellent game might be palatable to people who want quality, it did raise concerns about a new pricing standard that could isolate quite a few gamers whose budgets might not allow them to pick up great games consistently.

9. Industry Wide Layoffs

There’s a long list of studios that have been shut down, and teams that have faced layoffs over a variety of factors. Studios like Monolith, whose Nemesis System is now probably locked away in a vault somewhere, are great examples of talented teams who were unfortunately let go thanks to a variety of factors.

2025 also saw layoffs across Electronic Arts, Supermassive Games, People Can Fly, Amazon Games, and several others, with thousands of developers ultimately losing their jobs. Here’s hoping that all of the talented folks who were affected it managed to land on their feet.

10. MindsEye

Boy, was this one an annoyance. We went into MindsEye expecting great things from Build A Rocket Boy but were left with a bitter taste in our mouth after its lifeless world, lackluster story, and uninspired combat. This was a game that should have been so much more, and was perhaps the most egregious fail that 2025 brought to the gaming world.

The studio’s response to the criticism aimed at their debut title was also quite lacking, showcasing a poor attitude that did it no favors, and perhaps can act as a lesson to other studios whose offerings fail to get off the ground at the outset.

11. Monster Hunter Wilds PC

This one’s another instance of a disappointing end to a very long wait. With Worlds being as good as it was, Wilds should have been a sequel that took the popular franchise from the developer to new heights. And while the game did manage to put up a good show on consoles, its PC performance left players quite irate with the studio thanks to its poor optimization.

Frame rate issues, poor VRAM optimization, crashes, stutters, and so many more problems ruined what should have been an incredible time hunting monsters in visually stunning environments. This one’s a classic example of a game that should have been more popular right off the bat but was let down thanks to its problems. We’re happy it managed to get back on track though, somewhat.

12. Where Winds Meet’s UI Issues

If you’ve been with us for a while, you already know that Where Winds Meet has been quite a surprise for all of us who got to play it. However, its UI is one area that could certainly use some polish. In fact, we’d go so far as to say that it’s so confusing it runs the risk of making its players miss important parts of its gameplay loop, and needs to do better and communicate all of the myriad systems it contains.

This isn’t a game-breaking problem but it does need to be addressed nonetheless considering the amazing quality of everything else on offer in the experience.

13. Valorant’s Text Verification

Valorant might be among the best esports shooters out there, but that might have worked against the game in this particular instance. With Riot Games aiming to minimize cheating within the game and requiring users to use multi-factor-authentication to be able to play the game, it was obvious that there was going to be a bit of backlash.

With accounts being tied to specific mobile numbers and stringent checks against shady practices, players with multiple accounts who actually played the game without resorting to malpractices were forced to adhere to the new rules. Although necessary, it could still be seen as uncomfortable. We’re all human, after all.

14. Lacking Features At Launch

Several titles released with content that wasn’t available at launch, causing dissatisfaction among players thanks to how crucial they were to their overall enjoyment of the game in question. Borderlands 4’s excellent visuals might have tempted many of its players to take a break and grab some awesome shots of its world, but the lack of a Photo Mode at launch made that an area of frustration.

Ghost of Yotei should have had a New Game+ mode from the very start but that wasn’t the case. Its distinct lack of enemies out in its open world after you finished its story should have been a reason to have the option to get right back into the action but at least it’s there now for those who want it. Several other titles had notable omissions that had us scratching our heads at why they weren’t in the game in the first place.

15. Cancelled Projects

Sony pulled the plug on Bend Studio and Bluepoint Studio’s live-service projects in its pivot towards more profitable (and probably safer) ventures, while Microsoft also cancelled Everwild and Perfect Dark, both of which seemed like solid additions to their respective lineups of titles.

It’s always disappointing to see games with potential be denied the chance to show what they have but it is what it is.

And that’s a wrap on some of 2025’s failures that had gamers shaking their heads at dismal decisions and poor execution of great ideas. Here’s to hoping that 2026 manages to make lists like these a lot shorter!

“I was as shocked, surprised, and devastated as everyone else was when the funding was pulled, and the studio was closed,” she said. “I did not see it coming. I was absolutely blindsided when the project was defunded.”

According to Wilton-Regan, voice recording work on Perfect Dark had taken place throughout 2023, with a lot of performance capture taking place in 2024, as well as 2025. She noted that the work was pretty far along, with recording work entire chapters having been completed before its eventual completion. The Initiative “had delivered several milestones that the client was really happy with,” she noted.

“We were basically recording bits and bobs throughout ’23,” said Wilton-Regan. “We were also doing lots of performance capture for it in ’24, and we were even recording more stuff for it in ’25. To my knowledge, we were pretty far along. I’d done entire chapters of this universe.” She doesn’t quite know how much of the development work had been completed, however.

“It was devastating. So many people lost their jobs. An entire workforce was disbanded,” she said about the project getting cancelled and the studio getting shut down. “There was an ecosystem of creativity and collaboration that was in place that we lost overnight. It was really difficult, really difficult for everybody.”

Interestingly, Wilton-Regan also acknowledged the efforts to revive development on the Perfect Dark reboot, which was slated to take place through Embracer Group acquiring the IP rights from Microsoft and selling it to Take-Two Interactive, who would then bankroll the development. This deal, however, would ultimately fall through, with Tomb Raider developer Crystal Dynamics facing lay-offs as a result.

“That was the day I was really sad because that was the day I lost hope,” Wilton-Regan said about the attempt to reboot development. “Initially, when it made it to the press that Perfect Dark was being defunded, a lot of people reached out for comments about it, both in the media, as well as personally, friends, and professionally, colleagues.

“I couldn’t say too much about it because I knew The Initiative was in talks to keep Perfect Dark up and running in some shape or form. Possibly a slimmed-down version, possibly something slightly different. But certainly, everyone was working really hard behind the scenes to bring Perfect Dark back. And then one day, I heard from the creative director that the deal hadn’t gone through, and that really everything had fallen apart, and production was fully stopping.”

Looking to the future, Wilton-Regan also spoke about the uncertainty of the times. Since she’s playing Lara Croft in the upcoming Tomb Raider games, she spoke about how working on both Lara and Joanna felt like “genuinely one of the most creatively exciting times” of her life. She went on to note that, while her work as Joanna might not see the light of day, “I just felt so relieved that I still had Lara, but I also felt really frightened about losing Lara. I’m still frightened of losing Lara.”

You can experience Wilton-Regan’s work as Lara Croft in 2026 with the release of Tomb Raider: Legacy of Atlantis, as well as in 2027 with Tomb Raider: Catalyst. Both titles will be coming to PC, PS5 and Xbox Series X/S. As for the Perfect Dark reboot, while the title may not be in development anymore, former studio head Darrel Gallagher and Perfect Dark director Brian Horton have been hired by Take-Two Interactive to form a brand new studio under the 2K umbrella.

Gallagher was hired alongside former Perfect Dark developer at The Initiative Brian Horton by the company to form a brand new studio under the 2K umbrella. While it is currently unknown what new project Gallagher will be working on alongside Horton, he did made confirm that he had joined 2K as a senior vice president and studio head.

“I’m excited to share that I will be joining 2K as SVP, Studio Head, where I’ll be building a new studio and leading an ambitious opportunity unlike anything I’ve taken on before,” wrote Gallagher on LinkedIn. “I’ve spent my career believing in what’s possible when great people come together with a bold vision. I can’t wait to get started with the exceptional team at 2K!”

Horton has similarly taken to LinkedIn to announce his new position as head of creative at 2K where he will be working alongside Gallagher at a new studio. “Happy to announce I joined 2K as VP, Head of Creative at a new studio with Darrell Gallagher!”

Gallagher had announced his departure from The Initiative back in September – just a couple of months after reports of the studio’s Perfect Dark game being cancelled first came to light. At the time, Gallagher wrote about being proud of the time he had spent under the Xbox Game Studios banner alongside the other developers who were working on the game.

“While this chapter is ending sooner than hoped, the spirit, talent, and achievements of the team will live on well beyond the project,” he wrote. “I’m grateful to Xbox for the opportunity, to our partners for their support, and to the community for their belief in what we were creating.”

“I leave with nothing but pride in what we accomplished together and excitement for what’s next — both for myself and for the amazing developers I was fortunate enough to work with. Here’s to new adventures and to celebrating the journey we’ve shared.”

In the meantime, Crystal Dynamics had been hit with another round of lay-offs, and while it didn’t seem connected to Perfect Dark at the time, reports later on indicated that the lay-offs happened because of a deal being facilitated by Embracer Group falling through. The deal, according to the report, would have involved Embracer acquiring the Perfect Dark IP from Xbox before then selling it to Take-Two Interactive, who would then fund the development of a new game in the series.

It is worth noting that while Gallagher and Horton may be creating a new studio under 2K, whether or not they are working on a new Perfect Dark game is currently unknown. For more details on the cancelled project, check out a report from September that indicated that the title would have a seasonal model, and would have given players time slowing abilities.

Earlier this year I broke the news that Take-Two was close to rescuing Xbox’s Perfect Dark but the deal fell apart.Now, a new development: Take-Two has hired Perfect Dark studio head Darrell Gallagher and director Brian Horton to start a brand new studio within 2K.

— Jason Schreier (@jasonschreier.bsky.social) 2025-12-08T21:51:37.009Z

To kick things off, the Perfect Dark project was seemingly greenlit to capitalise on a lack of spy fiction-themed games in the market, with major franchises like Metal Gear Solid and Splinter Cell being dormant, and there not being any James Bond game announced at the time. The vision was to take similar vibes as these genres while still hanging on to the core of Perfect Dark on the Nintendo 64. HBO series Westworld was seen as an inspiration for how the studio could tackle an older IP with a modern approach.

A proof-of-concept prototype of Perfect Dark was being developed by The Initiative, and this was reportedly happening until April. This vertical slice—referred to in the document as Vertical Slice 1—was meant to represent the feel and style that the title would embody, and was stated to be part of “Season 1” of the ultimately-cancelled project.

A few details about the gameplay were also written about in the document, including the use of various abilities that would be powered by a resource dubbed adrenaline. Abilities used through adrenaline would have included increased damage, a defense boost, and even self-healing. There were also seemingly some time-based ability, like being able to slow down the time. This was also described as being extendable by taking down enemies during the time slow.

Screenshots part of the set of documents indicate that this adrenaline system would also be tied to the appearance of protagonist Joanna Dark in some way, with some screenshots showing her with disheveled hair and a more agitated facial expression.

Darrell Gallagher—head of The Initiative—announced last week that he was leaving Xbox. The announcement came a couple of months after the closure of the studio, and came in light of Crystal Dynamics also reportedly suffering lay-offs in its development team that was working alongside The Initiative on Perfect Dark.

“After an incredible journey, my time at Xbox has come to a close with the wind-down of Perfect Dark and The Initiative,” announced Gallagher. “I couldn’t be prouder of the talented and passionate team I had the privilege assemble and lead. Together, we set out to reimagine an iconic franchise and poured creativity, craft, and dedication into every step of the way.“

“The public reception and excitement for what we were building has been inspiring and deeply appreciated by all of us.”

Crystal Dynamics had announced its own lay-offs just last month, stating that the employees being let go from the studio would not affect the development of its Tomb Raider project. “This decision was not made lightly,” wrote the studio in its announcement. “It was necessary, however, to ensure the long-term health of our studio and core creative priorities in a continually shifting market.”

A report from earlier this month indicated that the lay-offs were the result of a deal that fell through. This would have involved Embracer acquiring the Perfect Dark IP from Xbox and selling it to Take-Two Interactive, the latter subsequently funding the further development of the cancelled project.

“After an incredible journey, my time at Xbox has come to a close with the wind-down of Perfect Dark and The Initiative,” announced Gallagher. “I couldn’t be prouder of the talented and passionate team I had the privilege assemble and lead. Together, we set out to reimagine an iconic franchise and poured creativity, craft, and dedication into every step of the way.“

“The public reception and excitement for what we were building has been inspiring and deeply appreciated by all of us.”

Further in his post, Gallagher also wrote about how thankful he was to Xbox for the time he had spent under the company while working on Perfect Dark, as well as the general support that The Initiative was seeing from the overall community.

“While this chapter is ending sooner than hoped, the spirit, talent, and achievements of the team will live on well beyond the project,” he wrote. “I’m grateful to Xbox for the opportunity, to our partners for their support, and to the community for their belief in what we were creating.”

“I leave with nothing but pride in what we accomplished together and excitement for what’s next — both for myself and for the amazing developers I was fortunate enough to work with. Here’s to new adventures and to celebrating the journey we’ve shared.”

The cancellation of Perfect Dark was revealed back in July to have ultimately led to the closure of developer The Initiative. The announcement was caught through an internal email by Matt Booty of Xbox Game Studios. In his email, Booty wrote about cancelling Perfect Dark and Everwild, along with “several unannounced projects across our portfolio”.

The effects of Perfect Dark’s cancellation ended up being quite far reaching, and earlier this month, reports have indicated that even Crystal Dynamics—a studio that was helping The Initiative to develop the title—was hit with lay-offs. The report indicated that the lay-offs were the result of a deal falling through where Embracer Group was trying to acquire the Perfect Dark IP from Xbox to then sale to Take-Two Interactive, the latter company ultimately funding the development of the game.

While Crystal Dynamics had confirmed the lay-offs, the studio also noted that the development of its Tomb Raider project would not be affected. “Today we made the very difficult decision to part ways with a number of our talented colleagues as the result of evolving business conditions. This decision was not made lightly,” wrote the studio in its announcement. “It was necessary, however, to ensure the long-term health of our studio and core creative priorities in a continually shifting market.”

“To our teams, players, and partners, thank you for your continued support as we build a creative, sustainable, and resilient tomorrow together,” it continued. “This includes the future of Tomb Raider, which remains unaffected by this decision.”

According to the report, the deal would have involved Embracer acquiring the IP from Xbox, which currently owns the rights to Perfect Dark, and selling it to Take-Two Interactive. The latter company would then fund the development of Perfect Dark at Crystal Dynamics and act as its publisher. However, this deal didn’t come to pass, with the report citing sources requested anonymity that the companies weren’t able to come to an agreement about the long-term ownership of Perfect Dark as a franchise.

With this report in mind, it looks like the lay-offs affecting Crystal Dynamics largely had to do with parts of the studio still working on Perfect Dark. The studio was seemingly still developing the game while its leadership, along with the leadership of now-defunct studio The Initiative, was looking for a new publisher that would help fund the game. As part of its lay-offs announcement, Crystal Dynamics didn’t really provide a reason or even details about how many of its employees were affected by the lay-offs.

“Today we made the very difficult decision to part ways with a number of our talented colleagues as the result of evolving business conditions. This decision was not made lightly,” wrote the studio in its announcement. “It was necessary, however, to ensure the long-term health of our studio and core creative priorities in a continually shifting market.”

Perfect Dark, which was being developed jointly by The Initiative and Crystal Dynamics, had reportedly been cancelled back in early July, coinciding with a number of lay-offs affecting Microsoft. Along with this, Xbox Game Studios’ Matt Booty also revealed in an internal email that projects like Everwild were also being cancelled. As a result of the game’s cancellation, reports also indicated that Microsoft was shutting down The Initiative.

Despite this, however, Booty’s email did note that Microsoft still had more than 40 projects in active development, with the company maintaining a release schedule for “this fall, and a strong slate headed into 2026.”

While the Perfect Dark project might ultimately be dead for the time being, Crystal Dynamics had confirmed in the announcement of its most recent lay-offs that its still-in-development Tomb Raider project was unaffected. While this Tomb Raider project was announced all the way back in 2022, there have been no details revealed for it as of yet aside from the fact that it is being developed on Unreal Engine 5.

The last major release by Crystal Dynamics was Marvel’s Avengers – a live-service title that was released to poor critical and commercial reception, and was ultimately de-listed from online storefronts.

Now imagine that those leadership figures approach you and your team to tell you that your project, which you’ve poured years of your life into, has been cancelled. Actually, don’t, because what happened (allegedly, of course) is that studio leaders locked your team out of their Slack accounts while telling them that the same project has been cancelled. Oh, and hours later, you don’t even know if you’re still employed.

You could also try imagining a similarly aggravating situation at Halo Studios, formerly 343 Industries. After working for years to help turn around what one developer called a “dumpster fire of a live service,” you’re fired for the sake of “agility and effectiveness,” that too as a memo from Spencer touts that the company’s “platform, hardware, and game roadmap have never looked stronger.” At the same time, Microsoft continues to invest more into AI, to the extent that one anonymous developer told Engadget, “They’re trying their damnedest to replace as many jobs as they can with AI agents.”

Perhaps it’s better to imagine life at Turn 10 Studios. Truth be told, you’ve had a rough year and a half. Forza Motorsport, your long-awaited reboot, is finally available…and fans hate it. Thus begins the slow process of fixing everything – the progression, the online play, the Car-PG mechanics your team so proudly displayed, and, of course, the numerous bugs. Months of new cars, tracks, events, and features later, it’s incomparable to past titles. But things are steadily improving.

Then you’re told that 50 percent of your studio is gone and that the Forza Motorsport franchise is essentially dead. That last point is still somewhat contentious, as it comes from a former Turn 10 Studios employee who left in 2016 (and may or may not still have connections). Regardless, based on the number of departures, it seems that those lucky enough to keep their jobs are relegated to mere support. For now, of course.

Following Microsoft’s mass layoffs, many more stories have begun to emerge about the studios affected. Romero Games, established by  John and Brenda Romero, has shut down. Xbox didn’t acquire it but rather provided funding for the studio to develop a new triple-A sci-fi first-person shooter. That’s since disappeared, according to an employee on LinkedIn, resulting in the game’s cancellation. And this isn’t a small operation – over 100 employees are affected.

Then there’s the story about last year’s demo for Perfect Dark reportedly being fake. It led to a bit of back and forth before former senior level designer Adam McDonald weighed in to reveal that the demo was in-engine and that, “It worked best if you played it the way the person playing in the video plays it, but it still worked even if you didn’t hit the marks perfectly.”

While acknowledging the existence of “some fake stuff,” McDonald said that the “real gameplay systems shown off worked juuust enough to look good in the video.” The parkour and hacking/deception systems were real – even the combat was quote-unquote real if played in that exact same way. What could have truly been with the final product? We’ll never know for sure, even as Alix Wilton Regan, Joanna Dark’s voice actor, asked fans to “speak up if you wanna see Perfect Dark survive.” Quite frankly, I approve of more people shouting at Microsoft for its incompetence or just in general.

As overwhelming as the number of stories has been, there also haven’t been enough. What’s going on with Compulsion Games? We know there were layoffs at Undead Labs, but to what extent is a mystery (and considering State of Decay 3 had its share of development troubles over the years, there’s reasonable concern over what happens next). Where is Contraband, the co-op title that Xbox Game Studios teamed up with Avalanche Studios to work on? How will the cancellation of Perfect Dark affect Crystal Dynamics, which was working on it alongside The Initiative?

Amid all this, one thing is for sure – Phil Spencer isn’t retiring anytime soon. Yes, there was actually a rumor that he would be retiring as Microsoft Gaming CEO, but almost as swiftly as it gained traction, the company was quick to clarify to The Verge that he is, in fact, staying. A salary cut, maybe? No? Alright.

To me, it feels like Xbox is a creature perpetually dreaming. Dreaming of the Xbox One as an all-in-one living room console centered on Kinect to reach a wider audience – the true endgame of the Xbox 360’s Kinect success. Dreaming of owning all these studios and just leaving them to their devices to make great games without any oversight. Dreaming of every platform being an Xbox and telling as many people as possible, as much as possible, in the hopes that they eventually believe it.

Yet, try as it might, it can’t control the contradictions that keep popping up and interrupting its obliviously peaceful slumber. Of players vehemently rejecting a Kinect-centric console and the executives who drone on about crossover media and TV shows. Of studios failing to meet deadlines, lacking the resources to address issues, or even just hoping that their projects are cancelled before launch because their leaders lack the first clue on what to do. And, my favorite – telling everyone that, “This is an Xbox,” while not even mentioning the PS5, where their titles are actually performing well sales-wise.

My second favorite is probably laying off all these employees and shuttering projects, then reportedly accepting ideas for the future. It happened with Tango Gameworks and Arkane Austin, who allegedly pitched Hi-Fi Rush 2 and a new Dishonored, and Microsoft decided it made more sense to shut them down. Then-Xbox Game Studios head Matt Booty turned around shortly after and allegedly told remaining employees that the company needed “smaller games that give us prestige and awards.”

More recently, VGC’s Andy Robinson heard about reported pitches for a new Banjo-Kazooie with names like Toys for Bob and Moon Studios popping up. Time is a flat circle, wearing one of Spencer’s leather jackets and hyping up how the next year – the next year, for sure, guys – will be great for Xbox.

The bloom isn’t so much off the rose for Microsoft’s Gaming Division so much as the rose is now mulch. If there was hope about Xbox turning its fortunes around amid declining hardware revenue and gaming revenue only propped up by Activision, or at the very least, cautious optimism in its transition to a multi-platform publisher, maybe even the faintest glimmer that the next generation of Xbox could possibly reignite the brand, it’s dead.

Then again, Microsoft as a whole doesn’t seem to think in those terms. It seemingly functions to follow the money, no matter what trends it must plunge into or how much must be butchered, burned or buried in the process. The only constant in the company is change – changing what it will chase next, inevitably sacrificing the people who carried it so far, all in the name of revenue. Unfortunately, if there’s any other constant, it’s that no matter how much one dreams, eventually, you need to wake up.

Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.

After cutting three percent of its workforce worldwide in May this year, a new wave of layoffs has hit the company. The Seattle Times reported roughly 9,100 employees affected across all of Microsoft, with the overall impact on its Gaming Division unknown. Bloomberg did note that King, based in Stockholm, and ZeniMax Media’s European offices were affected (with the former losing about 200 employees). However, at the time, the full scale of the cuts was unknown in the United States.

As time passed, it became clear that this wasn’t just a series of layoffs but an all-out bloodbath. Everwild, Perfect Dark and ZeniMax Online Studios’ next MMO, codenamed Blackbird, have reportedly been cancelled. The Initiative has been closed. Rare will allegedly undergo restructuring and see layoffs. Undead Labs, currently working on State of Decay 3, has reportedly faced layoffs (though how extensive is unknown). Turn 10 Studios saw over 70 layoffs, according to The Verge, effectively reducing its staff by almost 50 percent (which is apparently enough to keep Forza Motorsport going).

At the time of writing, it’s unknown whether ZeniMax Online Studios will see layoffs because the overall handling of the process has been, to put it simply, embarrassing. Bloomberg’s Jason Schreier noted that staff who worked on Blackbird were locked out of their Slack accounts without any warning from HR. Leadership and HR have also yet to confirm their job statuses, though they can still use their official work emails and Microsoft Teams (and no, I won’t make the joke).

The way it’s been handled is unequivocally horrendous, but it’s not just in the United States. King’s London and Berlin offices, alongside their remote workers, have also allegedly been hit, according to MobileGamer.biz. Though they noted how it wasn’t very surprising, the process has still “been handled very poorly.”

Back in the US, not even those working on the Call of Duty franchise are safe. Insider Gaming reported layoffs to Sledgehammer Games and Raven Software, with the actual number yet to be known. And yes, Raven is working on Call of Duty: Black Ops 7 alongside Treyarch. High Moon Studios, which serves as a support studio on Call of Duty: Warzone, has also seen layoffs. Halo Studios is also reportedly seeing layoffs – one alleged employee worked on Halo Infinite for the past four years to turn around, quote, “that burning dumpster of a live service.” There aren’t any reports about South of Midnight developer Compulsion Games, but one former employee recently posted on LinkedIn about seeking a new role, having worked at the studio since June 2024.

You’re probably wondering at this point, “Is that all?” Well, no. According to The Verge, the Xbox user research team has also been “hit hard.” For those unaware, it’s a team that “focuses on ensuring quality across Xbox games, the platform, and developer tools.” Windows Central reports that QA in Activision and Blizzard have also been affected, alongside marketing and sales teams. If that isn’t enough, Xbox’s head of family and child safety is also gone.

If we’re talking about senior positions, ZeniMax Online Studios president Matt Firor is leaving after over 18 years, while sources told VGC that Gregg Mayles and Louise O’Connor will be leaving Rare. Mayles has spent over 35 years at the studio and is best known for Banjo-Kazooie and Sea of Thieves (and was also directing Everwild after the reported 2021 reboot). O’Connor has also been at the studio for quite some time, having worked on Conker’s Bad Fur Day, and is also gone after the cancellation of Everwild.

And I would say, “That’s it for now,” but no one, not even Microsoft since this is their fourth set of layoffs in about 18 months, could possibly know. It’s been, for all intents and purposes, a bloodbath. But you know who thinks all of this is the best decision and the one that will position the brand for continued success? Why, Microsoft Gaming CEO Phil Spencer, of course!

Before news of all these cancellations and layoffs fully circulated, Spencer sent out a note (obtained by Windows Central), stating, “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.” However, in the next paragraph, he admits that all of this is happening, while, “We have more players, games, and gaming hours than ever before. Our platform, hardware, and game roadmap have never looked stronger.” So what gives?

Spencer continues, “The success we’re seeing currently 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 efforts 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.”

He offered the usual spiel for those let go – “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” (which is one way of saying, “It’s not you, it’s me”). But perhaps the most notable is, “Our momentum is not accidental—it is the result of years of dedicated effort from our teams.” So naturally, the obvious next step is to lay off those workers to thank them for their work thus far. The worst part about the note is how “the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.” This seemingly indicates that more layoffs and cancellations are coming.

As annoying as all this is, Xbox Game Studios’ Matt Booty followed with an internal email confirming the cancellation of Perfect Dark and Everwild and the winding down of “several unannounced projects” (which seemingly includes ZeniMax Online’s Blackbird). “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,” said Booty. “We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment.”

However, he then goes on to note that the overall plan remains “unchanged,” which is to “build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters.” There are apparently over 40 projects in “active development” and “continued momentum” on games launching this Fall (and no, we don’t know of any new titles outside of The Outer Worlds 2). Furthermore, it has a “strong slate” going into the next year.

What is the point of this section other than to inspire confidence among those left that Microsoft isn’t dying anytime soon or perhaps no further cancellations are on the way? Thinking back to the end of Spencer’s note, now might not be the right time to brag about “continued momentum.” Then again, Booty is the one who looked at rumors about Perfect Dark’s troubled development and said, “It’s quite the opposite.” He also called reports of Everwild’s development rebooting in 2021 as “a little extreme” than what really happened. Do I expect any executive in such a position to be candid and admit fault? Well, no, but then again, I also don’t expect to hear about all the wonderful things Xbox has in the works after my colleagues and co-workers lost their jobs.

So, with all that out of the way, Microsoft’s tally for layoffs in 2025 sits at over 15,000 employees thus far. The real question, at least for the time being, is: What hasn’t been cancelled? Apparently, everything from the recent Xbox Games Showcase (conveniently enough) is safe, according to Windows Central. It’s also been suggested that the company’s next-gen console plans “remain unaffected.” You know, the one part of the Gaming Division’s revenues that have seen constant declines. Then again, I don’t know if you can boast about the revenue from content and services too much since Call of Duty and Minecraft (followed by Game Pass) contributed heavily to the same.

Taking a step back, it’s easy to look at all this and simply blame Microsoft. And make no mistake – it really is that easy, considering Spencer and crew have been at the helm for some of the company’s biggest failings. The closure of Tango Gameworks, Arkane Austin, and Alpha Dog Studios. Increasing the price of major first-party games to $80. Declining hardware revenue. Multiple years with no games to offer loyal fans. High-profile disappointments, like Halo Infinite at launch and Redfall.

Depending on who you ask, even releasing first-party titles to PlayStation 5 and Nintendo Switch, which proved financially successful, was viewed as the company admitting defeat in the console wars. Which, going by the numbers, should be a given. You may think that the cancellations of Everwild and Perfect Dark are justified, given years of troubled development.

Yet Microsoft oversaw both studios and dozens of others. When a 2022 report emerged about a toxic work environment at Undead Labs under its new studio head and HR head, leading to numerous departures and stalled development on State of Decay 3, Microsoft was specifically called out for not acting sooner.

In the past, Phil Spencer has admitted that upper management was hands-off, leaving studios to their own machinations – which was the reason (among many) why Redfall shipped in its sorry state. He then claimed that the team did “a better job” helping with Bethesda’s Starfield, but even if you’re a fan of it, there’s no denying the bugs, glitches, crashes, and quality-of-life issues that it shipped with (after delays, at that).

However, if we’re outlining everything that Microsoft has done wrong with the Xbox brand, you could go all the way back to 2013 (and some people have), pointing to Microsoft effectively nailing its own coffin shut with how it presented the Xbox One. Even after backtracking on Kinect, always-online requirements, used-game ownership and a focus on TV media, it was still effectively sent to die against the PS4 later that year. Some may even go back further and blame its focus on Gears of War, Forza, and Halo – the top three, as it were – and the inability to nurture new franchises, which prompted the acquisition of Ninja Theory, Compulsion Games, Playground Games and many more in the years to come.

Whether that acquisition-fueled mayhem and the less-than-stellar returns are to blame or not, this process of acquiring studios and then shuttering them after however many years isn’t all that surprising. Flashback to 2021, when Sarah Bond, then-head of Game Creator Experiences and Ecosystem at Xbox, reflected on shutting down Lionhead Studios in 2016 after acquiring it in 2006. “What did we learn, and how do we not repeat our same mistakes?” Spencer followed up by stating, “You acquire a studio for what they’re great at now, and your job is to help them accelerate how they do what they do, not them accelerate what you do.” Based on everything that’s happened, it seems that leadership at Microsoft Gaming and Xbox Game Studios has a long way to go.

Many players are still wondering why Spencer – and other leadership figures like Matt Booty – are still in charge, given the brand’s failures over the past several years. We’ve heard Xbox president Sarah Bond talking about a new multi-year partnership with AMD across “a portfolio of devices,” including next-generation Xbox consoles, where one of the stated goals was to deliver “immersive gameplay and player experiences enhanced with the power of AI.”

However, Microsoft signed a deal with OpenAI in 2019, though Business Insider reported tensions between the two companies, casting some doubts on whether their partnership can last until 2030. That being said, Microsoft has still invested a whopping $13 billion into it thus far. All that money has to come from somewhere, and unfortunately, we may be seeing the result of that.

Of course, that still doesn’t excuse the current direction of Xbox – whatever that may currently be. Yes, Forza Horizon 5, Indiana Jones and the Great Circle and Sea of Thieves are successful on PlayStation 5. And while I was somewhat optimistic about Microsoft taking a multi-centric approach to offering its games on numerous platforms, I still don’t understand the whole “This is an Xbox” marketing campaign.

Or why the company had to tie up with Meta to release a $500 Meta Quest 3S Xbox Edition in limited supplies when none of its titles supports VR. As great a deal as Game Pass has been for the company, it hasn’t seen anywhere near the level of growth in the past few years as when it first began. The amount that Microsoft is investing in it continues to grow, however, and even if it’s helping many players discover brand-new titles, the argument that it’s effectively cannibalizing first-party sales will never truly go away.

The industry as a whole has faced unprecedented instability since the COVID-19 pandemic ended, with layoffs regularly happening as early as 2023. As perhaps the biggest games publisher in the world, Microsoft is no stranger to mass cuts – look no further than 2014 when it cut 18,000 employees, though that primarily affected the Nokia division. And while it may have a pretty impressive line-up of titles to come, Laura Fryer, one of the founding members of the original Xbox team, recently said it best.

“What is the long-term plan? Where are the new hits? What will make people care about the Xbox 25 years from now?” She noted that with the 25th anniversary of Xbox approaching in 2026, perhaps it’s “the year that the fog will clear and all of us will see the beauty in these latest announcements.” Whether that will be the case or not, the dark cloud currently hanging over Microsoft and its Gaming Division isn’t going away any time soon.

Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.

“We have decided to stop the development of Perfect Dark and Everwild 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 represent years of effort, imagination, and commitment.”

As for the division’s portfolio strategy, Booty says it remains “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 titles shipping this fall, and a strong slate headed into 2026.”

While Rare is seemingly bracing for layoffs and other studios, including Forza Motorsport developer Turn 10, have been affected, everything showcased at the recent Xbox Games Showcase is reportedly “safe.” This includes State of Decay 3, despite Undead Labs also allegedly facing an unknown number of layoffs.

Windows Central also noted that marketing and sales, alongside QA teams in Activision and Blizzard, have been affected. However, the company’s plans for next-gen console hardware reportedly remain unchanged. Four percent of Microsoft’s total workforce faced layoffs, affecting about 9,100 employees. Stay tuned for more updates, especially as more studios become aware of the total impact of these changes.

The site is currently “investigating reports” from its sources, so we’ll have to wait for more details. However, like Everwild, Perfect Dark has had its share of development troubles. Shortly after its announcement, its design director departed The Initiative. The studio would team up with Crystal Dynamics in 2021 and reported issues over studio structure led to a mass wave of departures.

Another report stated that development essentially restarted from scratch on Unreal Engine 5 in 2022 and that despite an alleged episodic format as of 2023, it was still several years off from launch. Microsoft finally debuted gameplay at its Xbox Games Showcase in 2024, and a recent job listing indicated a possible launch on the Nintendo Switch 2 and PS5. Stay tuned for more details on its alleged cancellation in the meantime.