Microsoft made large-scale layoffs across its gaming division this week, as part of wider cuts that have seen about 9,000 employees of the tech giant let go. It’s the fourth round of layoffs to hit Microsoft’s gaming operation since the start of last year, and the biggest since the company
shuttered four Bethesda studios, including Arkane Austin and Tango Gameworks, in May 2024.
This time, the story has centered on the cancellation of two high-profile games that had been in development for a very long time:
Rare’s Everwild, and
The Initiative’s reboot of Perfect Dark, which took the whole studio down with it. The Initiative, formed in 2018, never released a game.
But there are many more stories to tell among this round of cuts.
Blizzard was hit by layoffs and the end of active support for its mobile game,
Warcraft Rumble. Call of Duty developer Raven Software, currently working on this year’s
Black Ops 7,
lost staff. Forza Motorsport developer Turn 10 reportedly saw nearly 50% of its workers cut.
Elder Scrolls Online developer Zenimax Online Studios had an
unannounced massively multiplayer game canceled. Mobile specialist King, of
Candy Crush fame,
laid off 200 people. The cuts reached smaller independent developers, too.
Doom creator John Romero was working on a new first-person shooter, apparently for Microsoft, which has lost its funding, putting
the future of developer Romero Games in doubt.
The scale of the cuts is bewildering, reflecting Microsoft’s massive stature within the industry after a five-year acquisition spree that ended with the $68.7 billion purchase of Activision Blizzard in late 2023. But there’s a depressing sense of inevitability to it, too.
Some of that inevitability stems from the scale of Microsoft’s expansion in games over the past decade. The seismic consolidation of two giant publishers, Bethesda Softworks and Activision Blizzard, with the Xbox Game Studios group, which itself had been undergoing rapid expansion, was always likely to be followed by a long series of aftershocks as efficiencies were found, duplication was rooted out, and projects and studios fell away. The cuts began very soon after the Activision Blizzard deal closed, and haven’t really stopped since. Microsoft gorged itself on the game industry, got too fat too fast, and now thousands of workers are suffering the consequences of its post-binge purge.
