Xbox layoffs, studio closures imminent

There's no other way of putting it: Things are looking grim at Xbox right now.

A couple of different reports paint a bleak picture of the Microsoft-owned video game console manufacturer. Chiefly, The Verge reported that large-scale layoffs and even studio closures could happen around July 6. This could include Arkane Studios, the French developer behind Dishonored, Prey, and the upcoming Marvel Blade game, which still exists only in vague teaser form. The Verge's report suggests Microsoft could cancel Blade, which was set to launch in 2027.

Arkane joins a list of at least four other Xbox subsidiary studios that could either be shut down or, potentially, spun off and sold to someone else. It's unclear how likely the latter possibility is, though. One other studio on that list includes State of Decay developer Undead Labs, per Gamesbeat. The next game in that series, State of Decay 3, has been in development for years and is set to launch in 2027 at the time of this publication.

Compulsion Games, Double Fine, and Ninja Theory round out the list of studios that might cease to exist as soon as next week, per previous reports. One of Xbox's major issues during the last decade or so has been a distinct inability to consistently ship first-party games, and shutting down or spinning off several studios is unlikely to help in that regard. Layoffs in other parts of the Xbox business that are not otherwise shutting down are also likely, per GamesBeat.

All of these developments follow a leadership change at Xbox earlier this year, though the problems go back much farther than that. New Xbox head executive Asha Sharma has made some small symbolic overtures to win hearts and minds, such as confirming the existence of a next-gen Xbox console, Project Helix, in development. However, Xbox's reputation among video game enthusiasts is at a historical low, thanks to rampant layoffs, a lack of compelling software, and Microsoft's very controversial relationship with the Israeli military.