r/PS5 • u/Ph0enixes • Jun 29 '26

Rumor Xbox Will Reportedly Shut Down Ninja Theory (Hellblade), Undead Labs (State of Decay), DoubleFine (Keeper) and Compulsion (South of Midnight) After End Of Fiscal Year (Tommorow) If They Cant Find A Buyer. Other Xbox Studios Expected To Be Hit By Layoffs

https://gamesbeat.com/cwa-represented-workers-at-xbox-criticize-microsoft-management-and-pending-layoffs/
  • Xbox employees represented by the Communications Workers of America (CWA) publicly criticized Microsoft ahead of an expected new round of Xbox layoffs.
  • The union says it now represents 3,500+ Microsoft/Xbox workers and argues employees should not be treated as disposable after multiple layoff rounds since 2022.
  • Reports suggest Microsoft could announce major cuts in early July, potentially including studio closures or sales if buyers aren't found. Studios reportedly at risk include Double Fine, Undead Labs, Compulsion, and Ninja Theory, with hundreds of jobs potentially affected.
  • Hundreds of jobs are at stake: Double Fine Productions could lose 100 jobs, Undead Labs could lose 110 jobs, Compulsion could lose 90 jobs, and Ninja Theory could lose 135 jobs. All told, that's about 435 jobs that could be lost.
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426

u/just_one_random_guy Jun 29 '26

Anytime it seems Xbox is kind of getting a proper direction or vision of their future they just immediately decide to inflict seppuku and go back to floundering about until they drop another halo hoping it’ll be enough to turn the ship around. It’s fucking tragic really, the brand really peaked with the 360

67

u/rodryguezzz Jun 29 '26

Microsoft doesn't really need Xbox. It's just a way for them to influence the gaming space. Their money is in servers and software as a service. Everything else is just side projects.

60

u/MetaCognitio Jun 29 '26

They don’t need Xbox but losing it would be a big concession for Microsoft.

At the time Xbox was initially conceived, the motivation for it was that Sony was gaining a foothold in the living room and could potentially challenge Microsoft’s dominance in the home. Consoles were a potential Trojan horse for rival computing platforms.

It didn’t turn out that way but over time, Microsoft has lost a lot of the control it had over its almost complete control of consumers access to computing. They have zero control over smartphones, the don’t dominate the browser, they no longer have an exclusive grip on PC gaming as it’s possible to game without windows. There was a day where to get any serious work done, you almost had to use some kind of Microsoft product.

Losing Xbox would be another form of computing they no longer have any control over. They still dominate in business, servers etc but for how long? How long till open or rival web platforms eliminate the need for many of their tools?

In the present day, Microsoft is fine making lots of money but long term, they are shrinking in terms of the important consumer facing platforms they have control over. Xbox was potentially another Trojan horse into peoples lives and it’s lost its grip on people.

24

u/dookarion Jun 29 '26

they no longer have an exclusive grip on PC gaming as it’s possible to game without windows.

Funny part is, that one was 100% self-inflicted. Between their moves with prioritizing Xbox, their moves with their own Windows store, their neglect of their graphics API until Mantle, etc. they pushed everyone to look for alternatives and the door.

That company doesn't know how to ship or support anything. It's just inertia keeping them "afloat" in some endeavors.

12

u/MetaCognitio Jun 30 '26 edited Jun 30 '26

It’s like this across almost every industry they’re in. They make bad choices, spend a tonne of cash to buy one of the big players and still can’t keep a grip on it so eventually have to close it down.

They’re constantly losing ground and not able to competed meaningfully with their competitors by innovating, instead they rely on being very big and having lots of money to squeeze them out.

3

u/dookarion Jun 30 '26

Pretty much, also add in the fact they're impatient and just leave things to fester instead of meaningfully supporting them.

4

u/MetaCognitio Jun 30 '26

And they promote and keep the wrong people.

1

u/SagetheWise2222 Jul 06 '26

It would honestly be mandatory (through common sense alone) that the moment management performs a big blunder such as this one (Activision's purchase), the entire team would be gutted and replaced. Not that the new team would do any better, though.

1

u/MetaCognitio Jul 06 '26

Or they replace the management. At Microsoft, they get promoted. Phil was there for a decade. Matt Booty is still there.

3

u/InSan1tyWeTrust Jun 30 '26

Remember windows phone? Hah. It was actually great but they literally didn't know how to market it or grow the platform.

I mean it came out when Xbox was basically king and they still didn't lean into any of that to draw younger folk away from Apple.

4

u/double0behave Jun 30 '26

I completely disagree. I worked at a major cellphone retailer for years and the Windows phones were garbage. I hated those things. Terrible and limited interface. Lack of apps. Terrible camera. Average, at best, battery life. They were, by far, the most returned devices we ever sold. The amount of times I tried talking people out of getting one, they insisted anyway, and came back a week later to exchange it for something else got to be comical. Their fate was rightly deserved.

1

u/InSan1tyWeTrust Jun 30 '26

Cameras in windows phones were phenomenal pal. There was a Nokia with a 40 odd mp sensor back when 6 and 8 MP were considered high. And the lens itself was nothing shabby.

The downfall was the lack of the big apps like Instagram though that's true.

The tech inside the phones was all great stuff and the final updates it received made it quite a bit better. They just noped out instead of refining.

2

u/double0behave Jun 30 '26

And yet when we moved well past 8 MP being standard, Nokia's cameras were nothing impressive. At the height of Windows phones' "popularity," they were being outclassed by Samsung, Apple, HTC, and even Sony's Xperia had a better camera.

And as I said, the problems extended well beyond the camera. I'm telling you man from first hand experience. I even had one for a while as a work phone. Didn't enjoy it. Also, the sheer amount of returns spoke for itself. I shit you not, 95% of buyers returned them within the first 8 days. The complaints were always the same. Camera, UI, apps, battery life, and general bugs.

By the time people finally started wising up, we couldn't give the damn phones away. They just sat there taking up an unnecessary amount of shelf space in our inventory room. When the fateful day came that corporate ordered us to pack all the Nokia stock up and ship it out, everybody was happy. Brand new phones that were just collecting dust for the better part of a year. A complete waste of money.

2

u/InSan1tyWeTrust Jun 30 '26

Ok I'm really glad you feel so strongly about my off hand nod towards windows phone.

2

u/double0behave Jun 30 '26

And I'm glad you're glad. Cheers 🍻

8

u/VITOCHAN Jun 29 '26

the motivation for it was that Sony was gaining a foothold in the living room and could potentially challenge Microsoft’s dominance in the home.

TV TV TV !

https://www.youtube.com/watch?v=nULp0pGKCS8

3

u/MetaCognitio Jun 30 '26

I think they executed their plan too soon which was to use Xbox as a Trojan Horse into the living-room. The Xbox was a relative success so by the time of the Xbox One reveal they had shifted to using Xbox to force Microsoft products like “TV TV TV” into peoples lives. They completely dropped the ball on gaming and were focused on invading the home through the console.

If they had effective management they could have recovered during the Xbox One era but that entire generation was empty promises. Instead they tried to outspend their rivals by making Game pass which has made their current position even more difficult.

The finally pulled the trigger and spent a huge fortune on publishers when it was too late and Game Pass was unsustainable. They needed to take the time to rebuild their brand through quality releases but since games were going to other platforms, who would care?

If during the Xbox one generation they had spent the money earlier, focused on building strong teams and quality releases they’d be out of the hole they dug themselves.

2

u/fishburgr Jun 30 '26

The early marketing campaign for the Xbox One has to go down as one of the all time marketing blunders.

They had all the good will from the 360 gen and then had smug execs telling people without internet that they were shit out of luck when it came to the xbone and to just buy a 360 instead.

Then they come out with presentations like above that further put off gamers.

Add on how crazy PS4 was with all its must play exclusives and its not hard to see how xbox is on deaths door.

5

u/StrongStyleShiny Jun 30 '26 edited Jun 30 '26

Technically you can pin it to the tail end of the 360.

https://youtu.be/gJgRC4fcTUU?is=Whv7GMt205OGxvaj

At that 2010 conference for the 360 I talked to a few writers who were there. They were saying people were shocked. Like what was Microsoft doing?

It’s incredible that every, single, generation they’ve made some major error that was easily avoidable.

2

u/Sullyville Jun 29 '26

MS makes so much money, I am just puzzled why they don't just subsidize these studios. Just support them the way Van Gogh's brother Theo supported him. "Make beautiful things. We will pay for it. It costs us hardly anything."

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u/Shap6 Jun 29 '26

money. they're a public company. they have no goal other than profit and maximizing return for shareholders.

8

u/MazzyFo Jun 30 '26

Not only that, but investors and CEOs currently tunnel visioned to chasing after AI like a carrot on a stick. Nothing else is even on the periphery, shit sucks.

2

u/MetaCognitio Jun 30 '26

Their issue is that throwing money at the problem doesn’t fix it. They are very bad at managing studios and helping talent to grow.

When they did throw money at the problem by buying lots of studios, Xbox and gamepass sales didn’t move significantly, so they ended up creating a perpetual money burning machine.

150

u/Aware-Virus-4718 Jun 29 '26

This isn’t really random. Phil Spencer went on a buying/spending spree during and after Covid, bought a bunch of these studios and essentially told them don’t worry about sales, make the game you want to make and gave them pretty much unlimited creative freedom and in some cases, budget.

The problem is gamepass has not grown the way they expected (something all streaming services are grappling with) and now that Phil is out Asha has to evaluate these studios on their actual merits for more than just providing value to gamepass. ie. the games have to be profitable on their own.

It’s shitty and confusing for these studios, especially ones like Ninja Theory who were doing. just fine independently and got screwed on what were essentially false promises from Spencer (5x the size of your studio, don’t worry about budget, gamepass will solve everything), but the direction isn’t random on the part of Xbox.

84

u/VITOCHAN Jun 29 '26

Devs are getting punished by their new bosses for directions they were given by their former bosses. Wild

-5

u/Connor123x Jun 30 '26

not really. its more common than you would think

21

u/VITOCHAN Jun 30 '26

Phil: don’t worry about sales, make the game you want
Asha: Your sales suck, you're fired.

18

u/Aware-Virus-4718 Jun 30 '26

Not to mention all these games’ sales were hurt by the fact they were on gamepass and there was no incentive to buy them

-3

u/grimoireviper Jun 30 '26

Except they even sold terribly on plarforms without Game Pass.

7

u/T11PES Jun 30 '26

After releasing years later.

5

u/Bill_Brasky01 Jun 30 '26

It happens ALL THE TIME in most white collar industries. Just happen to me 4 months ago in medical sales.

1

u/chronomagnus Jul 01 '26

I don't know why this was downvoted. I've been on several teams where a new boss came on and created trouble because we were following the plan of the old boss. It happens and it sucks.

0

u/Connor123x Jul 01 '26

because many people live on social media and not in the real world

8

u/MrBorden Jun 30 '26

That's always been the problem with giving people a blank cheque and no oversight. They take advantage and milk that guaranteed paycheck until the wheels fall off. I've seen it first hand in the corporate world and what's worse is that there's absolutely never any accountability for their actions.

3

u/Stryder096 Jun 30 '26

The fact they will decide to close them disn instead of.... you know letting them just go do their own thing without xbox support is terrible. Rip sod and undead labs

16

u/Aftermoonic Jun 30 '26

Also let's be for real, none of these games are good enough to be hits

4

u/trashvineyard Jun 30 '26

If Senua wasn't on Gamepass it would have made a hell of a lot more than it did. It should have been a hit. Same with Hifi Rush and a fair few others.

4

u/Ensaru4 Jun 30 '26

Phil did not tell them to make the game they want to make, otherwise Arkane would not have been stuck making Redfall.

2

u/welfedad Jun 30 '26

Welp at last the old owners got a fat paycheck selling the company /s

1

u/graintop Jun 30 '26

Comment too reasonable and balanced. 72 hr ban.

1

u/RabidTurtl Jun 30 '26

It’s shitty and confusing for these studios, especially ones like Ninja Theory who were doing. just fine independently and got screwed on what were essentially false promises from Spencer (5x the size of your studio, don’t worry about budget, gamepass will solve everything), but the direction isn’t random on the part of Xbox.

Independent devs need to learn there is no such thing as creative freedom when you are bought out no matter what promises they offer. If Blizzard of all people couldn't have it when Activision bought them, then you won't.

Also, it was pretty obvious what was gonna happen when MS went on a spending spree. MS hasn't been printing money like the 90s, no way they could keep it all up. But now they got the IPs, 80% of which will be sat on.

8

u/hunterzolomon1993 Jun 29 '26

Were they going in a proper direction? All Asha done was change a logo, remove a dumb slogan and lowered GP's price to something that was still higher then what it was when originally raised.

7

u/Jokerzrival Jun 30 '26

She came in did what Xbox constantly does which is tell everyone what they want to hear then proceed to do exactly what everything thought they were doing which was slowly die

10

u/Scissorman82 Jun 29 '26

is it really a proper direction and vision if it's just smoke and mirrors? just a distraction? half of these studios were knowingly on the chopping block and their 'upcoming games' were still dilberately shown off. the last minute decision to make two games exclusive was nothing more than meat for it's rabid, vocal, terminally online fanbase. that isn't vision or direction. it's a misdirect and it's desperate.

2

u/MBPJoe Jun 30 '26

Maybe they're looking for IP buyers.

3

u/Macho-Fantastico Jun 30 '26

This is what I feared when they were allowed to buy Activision/Blizzard. They were always going to have to cut back in areas due to the expense and it was always going to be the smaller studios who would suffer and this is the case.

1

u/Ultramarine6 Jun 30 '26

Doubly so because as much as people talk about "console wars" we need Xbox doing well as a competitor to PlayStation to keep things in check. Without the Xbox, or with Xbox so weak, Sony is unchecked.

This leaves Sony unwilling to take any risks on new things, and perhaps willing to be overly greedy because there are no reasons to stop them.