New 'Substantial' Layoffs Incoming for Xbox Gaming Division

[Cpt.Jank]

Microsoft appears to be planning a new round of layoffs, according to anonymous sources who spoke to Bloomberg. This time around, the layoffs appear to be targeting the Xbox gaming division, although the tech giant has yet to announce layoffs and declined to comment when Bloomberg reached out for confirmation.

Supposedly, the upcoming round of layoffs will affect workers across the entire Xbox group, as opposed to specific roles, departments, or subdivisions, and they will come alongside an internal reorganization at Microsoft. This news comes days after 1047 Studios, the developer behind Splitgate and Splitgate 2, announced a round of layoffs that affected an unknown number of staff, illustrating the continued strain on the gaming industry as a whole. It also follows the recent reveal of the ASUS ROG Xbox Ally. According to Gaming Layoffs, a site that tracks annual gaming layoffs, 2025 has seen an estimated 2,422 workers in the gaming industry be laid off in 2025 so far. Microsoft itself announced a round of layoffs in the Microsoft Gaming division in January this year. In response to the recent uptick in gaming layoffs, a new union has come about. The United Video Game Workers Union announced earlier this year that one of its main goals was to pressure companies in the gaming industry to put people over profits.


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[Why_Me]

They can always 'learn to code'.

 

[LabRat 891]

So, the short of it sounds like MSFT is outsourcing XBOX to other companies

 

[Vayra86]

Well you gotta wonder what all those Xbox employees are actually doing with their time. There isn't much coming out of it, is there, other than a few Stores and APIs to connect stuff together, Xbox is a huge empty shell of outsourced components mashed together. Game Pass similarly, adds nothing to gaming of substance. Its a service, and it'll price itself out of the market at some point, like most on demand services eventually will, because its just not sustainable or there's just nothing really to gain for most. Already, most if not all on-demand services suffer from limitations and price hikes and it won't stop.

First party games are rare, virtually nonexistant even. Beyond that everything is a cobbled together mess that's trying to sell off as an improvement/addition to the gaming scene, but its really not. Every odd few years they launch a new hardware / service offensive to keep people attached to it, or strangled into it because they already have a certain device or OS. But Xbox is empty. It used to be more than it is today, but ever since X1? I don't understand why people even look at it anymore. There are no unique selling points and no system sellers. But MS did go through the trouble to create an underpowered console that can barely play ported shit proper. Its a godforgiven mess.

And now they'll expand the branding to every device. Well yay. Now we can play the shit we could already play... on devices we already had, except they replaced a desktop icon with a massive xbox button to press start on. You gotta be a special kind of naive or total noob to see that as an advantage.

Xbox is just on a long, painful path towards total irrelevance. Meanwhile, Phil Spencer is trying to figure out how to spin this in a good way.

 

[sLowEnd]

Xbox is just on a long, painful path towards total irrelevance. Meanwhile, Phil Spencer is trying to figure out how to spin this in a good way.

Aye, the last time I was excited about anything Xbox-related was during the 360 days. I had zero interest in the XBOne and the Series X/S.

 

[cucol]

Well you gotta wonder what all those Xbox employees are actually doing with their time. There isn't much coming out of it, is there, other than a few Stores and APIs to connect stuff together, Xbox is a huge empty shell of outsourced components mashed together. Game Pass similarly, adds nothing to gaming of substance. Its a service, and it'll price itself out of the market at some point, like most on demand services eventually will, because its just not sustainable or there's just nothing really to gain for most. Already, most if not all on-demand services suffer from limitations and price hikes and it won't stop.

First party games are rare, virtually nonexistant even. Beyond that everything is a cobbled together mess that's trying to sell off as an improvement/addition to the gaming scene, but its really not. Every odd few years they launch a new hardware / service offensive to keep people attached to it, or strangled into it because they already have a certain device or OS. But Xbox is empty. It used to be more than it is today, but ever since X1? I don't understand why people even look at it anymore. There are no unique selling points and no system sellers. But MS did go through the trouble to create an underpowered console that can barely play ported shit proper. Its a godforgiven mess.

And now they'll expand the branding to every device. Well yay. Now we can play the shit we could already play... on devices we already had, except they replaced a desktop icon with a massive xbox button to press start on. You gotta be a special kind of naive or total noob to see that as an advantage.

Xbox is just on a long, painful path towards total irrelevance. Meanwhile, Phil Spencer is trying to figure out how to spin this in a good way.

Replace "XBOX and Microsoft" with "Playstation and Sony" and your are 100% right.

You said "First pary games are rare, virtually nonexistant even." Do you realice that this year Xbox is releasing 12 first party titles? Do you realice that sony is going to release a total of 1 first party title? Thats why im thinking you are talking about Playstation and not Xbox.

And when you talk about Game pass with the standart media inherited phrase "because its just not sustainable or there's just nothing really to gain for most." Ms said so many times that Game pass is profitable. And for me is the best gaming service ever. As a user, i cant gain more for the money im spending on it.

Because all of the above i think you are just a sony fanboy. Thats all.

 

[Jun]

Maybe the reason why people don't realize is because there's nothing worth noticing? Xbox and PlayStation used to be exciting but now it's pretty stale. Nintendo tried something new with the Switch and built on that with the Switch 2, and it's doing well.

 

[Imouto]

They put all their eggs into Game Pass. A service designed around people with crippling video game addiction. When all the addicts were rounded up they discovered that video game players liked to play whatever the fuck they wanted. Games outside the service like Baldur's Gate 3, Elden Ring and many others made the service redundant for several months in a row and there are at least a couple every year.

So it was no surprise when they announced 34M (11.7M LIVE subs included after they were integrated into GP Core) subscribers last year and the last figures from two years prior put it at +36M (25M GP + 11.7M LIVE). Meaning Xbox lost +2M subs in two years.

The result is flat results quarter after quarter with ABK pulling the rest of the division out of the water. Lets not forget that their hardware has seen massive ~30% drops constantly for over two years now and Xbox is totally irrelevant outside consoles so no new users can join their ecosystem.

 

[Vayra86]

Replace "XBOX and Microsoft" with "Playstation and Sony" and your are 100% right.

You said "First pary games are rare, virtually nonexistant even." Do you realice that this year Xbox is releasing 12 first party titles? Do you realice that sony is going to release a total of 1 first party title? Thats why im thinking you are talking about Playstation and not Xbox.

And when you talk about Game pass with the standart media inherited phrase "because its just not sustainable or there's just nothing really to gain for most." Ms said so many times that Game pass is profitable. And for me is the best gaming service ever. As a user, i cant gain more for the money im spending on it.

Because all of the above i think you are just a sony fanboy. Thats all.

This has nothing to do with Sony.

 

[TheinsanegamerN]

I hear repeatedly on other forums that "microsoft is doing amazing" and "you just hate xbox" when I point out their gaming division is struggling, but the fact they are outsourcing and laying off and pulling back everywhere speaks volumes.

If the next gen is as much of a stinker sales wise as the series S/X, I could see hardware xbox consoles becoming a thing of the past.

They put all their eggs into Game Pass. A service designed around people with crippling video game addiction. When all the addicts were rounded up they discovered that video game players liked to play whatever the fuck they wanted. Games outside the service like Baldur's Gate 3, Elden Ring and many others made the service redundant for several months in a row and there are at least a couple every year.

So it was no surprise when they announced 34M (11.7M LIVE subs included after they were integrated into GP Core) subscribers last year and the last figures from two years prior put it at +36M (25M GP + 11.7M LIVE). Meaning Xbox lost +2M subs in two years.

The result is flat results quarter after quarter with ABK pulling the rest of the division out of the water. Lets not forget that their hardware has seen massive ~30% drops constantly for over two years now and Xbox is totally irrelevant outside consoles so no new users can join their ecosystem.

As it turns out, there's only so many people willing to pay hundreds a year to rent boring new games, and if the best you can offer is stuff you can also get elsewhere, your service is gonna fail.

Whouda thunk it?

 

[Colddecked]

First party games are rare, virtually nonexistant even. Beyond that everything is a cobbled together mess that's trying to sell off as an improvement/addition to the gaming scene, but its really not. Every odd few years they launch a new hardware / service offensive to keep people attached to it, or strangled into it because they already have a certain device or OS. But Xbox is empty. It used to be more than it is today, but ever since X1? I don't understand why people even look at it anymore. There are no unique selling points and no system sellers. But MS did go through the trouble to create an underpowered console that can barely play ported shit proper. Its a godforgiven mess.

And now they'll expand the branding to every device. Well yay. Now we can play the shit we could already play... on devices we already had, except they replaced a desktop icon with a massive xbox button to press start on. You gotta be a special kind of naive or total noob to see that as an advantage.

Xbox is just on a long, painful path towards total irrelevance. Meanwhile, Phil Spencer is trying to figure out how to spin this in a good way.

I've never been a fan of Sony, always felt their games were just derivatives of popular Sega/Nintendo games.

That being said, at least they and Nintendo are willing to make actual AAA games. Microsoft would rather sell a service. And ya portability and functionality across devices is cool but as you said, without new experiences you can't hope to expand the market and you're just bleeding your existing fans dry.

 

[TechLurker]

Given Xbox's recent promotions about almost everything being an Xbox now, on top of the major streamlining of Windows just for the Xbox Ally that actually makes Windows good (at least in early testing), I'm of the opinion that Xbox is being transitioned into becoming a brand of Windows oriented for gaming. A tweaked Win11 OS with a custom GUI layer if you will, to compete against the likes of Steam OS. Future devices with the Xbox brand is more like those "Copilot-ready" tags, in this case, meaning "gaming-ready".

Given their long-term partnership with AMD, they'll keep the console division, if only to continue selling gaming-oriented all-in-one PCs, moreso if they also end up using the Xbox Ally's custom "Windows Xbox" OS as a basis and build around it for handhelds and tablets (or even as a sort of desktop replacement; switching to Windows mode for productivity). But they could also start working with various mini-PC makers and possibly offer "Windows Xbox" OS for them, as a means of countering possible "Steam PCs" and allowing for a large install base. Moreso if they can entice more to buy into Gamepass and stream or download games to their mini-PCs.

 

[efikkan]

I have been wondering how long they will keep shoveling good money into that pit (mostly the consoles themselves, not the games).

They can always 'learn to code'.

Yeah, it's strange how everyone stopped saying that after mass-layoffs in the tech industry started in 2021, not just gaming. And those who are laid off struggle to compete with those who have just a few months "experience" with whatever the latest fad is, and often have to resort to unskilled work. Meanwhile, there is huge demand for the various trades, so perhaps the saying should be 'learn to weld' or 'learn to plumb'?

While any company of a certain size should periodically "trim the fat", the cuts are often large and late, and unfortunately often affects the staff unfairly.

I do believe that people going into engineering or other narrow specialized fields (tech or otherwise) should have something to fall back on, whether that's a trade or some shorter education/course like accounting etc. Alternatively, live way below their means in order to handle prolonged periods with low income.

I hope anyone affected by lay-offs finds motivation and uses the downtime to improve their skill set. It's up to you to be relevant for the workforce, not the other way around.

 

[Vayra86]

I've never been a fan of Sony, always felt their games were just derivatives of popular Sega/Nintendo games.

That being said, at least they and Nintendo are willing to make actual AAA games. Microsoft would rather sell a service. And ya portability and functionality across devices is cool but as you said, without new experiences you can't hope to expand the market and you're just bleeding your existing fans dry.

Yeah, though I have to partially agree with the other side that Sony hasn't been making its best appearance lately either. Its not like its raining first party stuff from their end either.

But... the key difference here is, that Microsoft also has the PC market, and Sony is just an occasional appearance on it, IF they have a game they can actually port to the platform. Its like a night and day gap between the two. And this does mean, much like how Microsoft holds a special dark place in our hearts for being the OS-near monopolist on the PC... that they're treated differently.

Microsoft has always bought its way into the gaming market. Its only credit goes to funding games and studios to make games, really. It hasn't produced much if anything in-house. The company is completely irrelevant when it comes to actual gaming markets. They just arm wrestled their way into it with capital, created a series of consoles with a series of pretty apparent problems (RRODs... Kinect bundling... the list can go on) while mixing in some good ideas (Xbox live) that really were mostly good ideas for their own bottom line. I don't think Microsoft has advanced crossplay in a meaningful way, despite all their talk about one Windows and device agnostic gaming - I mean, that's big now because its undeniably easy to facilitate due to the PS4/XB1 being x86 chips. Credit to AMD if anyone, for keeping the PC (at its core) and x86 (at its core) the most important platform for gaming. Its like a trojan horse in the whole 'console war'. The peasants are fighting over scraps, but they're all gaming on PC's now

Microsoft really already has a key role in the gaming market as the supplier of the primary OS to game on, and funneling the entire playerbase, alongside, Sony, into x86 systems. Their job is done. I don't even care what they do next, but whatever they do, it isn't at all to benefit the gamer or gaming. All of the software to enable that is already there. Microsoft's business on the gaming market now is just to earn money, their ownership has reached the limit of their capabilities, and they can buy another dozen AAA studios, but it won't change a thing - the moment they get bought, their innovative power is up in smoke. Indie devs underline this almost daily, with a constant stream of releases that are worth looking at, priced a whole lot lower than anything with MS under it.

If anything, I think MS is going to have an uphill battle on its hands for keeping Windows relevant in the gaming space. It almost seems like they've already given up on that battle, as Linux based gaming proliferates on handhelds. There is a half-assed, typically Microsoft plug into the Windows based handhelds (but who the F wants a different kind of Windows to game on?) but then it really degrades a full fledged OS to a launcher that still isn't mighty efficient or low resource oriented at all.

 

[chrcoluk]

What is the point and value of buying gaming companies to then just lay everyone off? Microsoft brought Fable dev, made maybe 2 more games then it was disbanded?