With plenty of reports coming out about Xbox’s major layoffs and studio closures that are expected to happen in July, a new one by Bloomberg’s Jason Schreier, indicates that Microsoft is punishing its employees for simply having followed prior orders. In his video, which you can check out below, Schreier has noted that Xbox employees are using the word “bloodbath”.
Schreier went into the history of Xbox to see where the company could have started going wrong, and noted that the infamous Xbox One announcement certainly did the company no favors. In that console generation, the company gave up much of the ground it had gained with the Xbox 360 to Sony’s PS4. The last few years have also seen Xbox trying to make major investments, such as its acquisition of Activision Blizzard, in the midst of the Covid-era growth.
“That’s when we see things start to get really bad,” Schreier noted. “We see four mass layoffs in two years, the closure of studios under the Xbox umbrella like Arkane Austin and Tango Gameworks, which wound up going to Krafton, which saved that studio, and the cancellation of projects like Everwild, Perfect Dark, and Project Blackbird.”
Discussing the effect that bringing the Call of Duty franchise to Game Pass had on things like the subscription service’s pricing, Schreier continued, “The last couple of years at Xbox have been quite messy; people start openly questioning Game Pass and saying it’s cannibalizing sales. What might be good for the Game Pass folks may not be so good for the studios and revenue brought in for individual games.”
He discussed how studios like Double Fine and Compulsion Games, while not quite setting the world on fire in terms of sales when releasing games like Kiln and South of Midnight, respectively, were still following Xbox’s orders, which revolved around releasing interesting games that could be used to further pad out the Game Pass library.
“A lot of these studios made plenty of their own mistakes, but in a lot of ways they’re being punished today for following orders,” Schreier said. “For listening to what they were told a few years ago. And that is just a shame, and what is going to happen is pretty brutal. The word bloodbath has been thrown around among people I talk to who know about what’s going to happen. It’s going to be bad.”
“And one of the reasons Xbox studios have struggled to make great games over the past decade is this uncertainty,” he concluded. “It’s really hard to make great art when working under the fear of layoffs and turbulence and cancellations and shutdowns.”
Xbox is believed to be waiting for Microsoft’s fiscal year to end on June 30th before it kicks off its planned layoffs and studio closures in full force. New rumors have indicated that even Bethesda isn’t safe, with anyone not currently working on The Elder Scrolls or Fallout being target of potential layoffs. In the meantime, Compulsion Games, Double Fine, and Hellblade developer Ninja Theory have reportedly begun negotiations to attain their independence.