Five internal Xbox studios, including Ninja Theory, Double Fine, and Arkane Studios, are at risk of being disbanded. Some may be spun off from the corporation. Mass layoffs will affect a large part of the division and could begin on July 6.
The cuts are not limited to personnel. Microsoft is terminating contracts with external partners. Among them is IO Interactive, with whom publishing cooperation on Project Fantasy has ceased. These steps have raised questions about whether the company is gradually preparing to exit parts of the gaming market.
In response to concerns, Microsoft stated that it does not plan to reduce the overall volume of investments in the gaming sector. Budgets for the development of new projects will remain at last year's level.
The priority is shifting towards the largest revenue-generating franchises. Players joke that Microsoft is returning to the Xbox One era model, betting on Gears, Forza, and Halo, while leaving smaller projects or releasing new franchises only occasionally.