Xbox is almost certainly planning to lay off a significant number of employees next month. News that the cuts were coming led some to worry about their favorite smaller Xbox-owned studios, and the soon-to-be-subsequent news of layoffs suggests that Xbox users worried about those studios are right to be.
The upcoming Xbox layoffs could lead to the studio's closure
While Xbox CEO Asha Sharma wouldn't directly confirm that she and her team will potentially lose thousands of jobs this July, she did admit that things have to change. Bloomberg reported that massive layoffs were coming to Xbox, and Sharma shared a report that was distributed internally, seemingly in response to Bloomberg's claims.
In it, Sharma admits that Xbox will end this fiscal year with a liability margin of just three percent, and that after spending $20 billion over the past five years, Xbox's annual revenue is down $500 million. Again, no mention of layoffs, but other reports from The Verge claim the cuts could include studio closures or changes to the Xbox studio lineup.
People are afraid of a double fine
This additional information leads Xbox users to fear the worst, where Xbox could swing its ax to end the studios. The top of the pile is Double Fine. While the legendary studio always has more Psychonauts to point to when Xbox asks what it's cooking, Double Fine's last two games were really personal projects that didn't seem to bring much revenue to its publishing overlords.
Double Fine released Keeper in late 2025. Sales figures are not available for the title, but it seems unlikely that it secretly sold millions. This year, Double Fine released Kiln, which, while again there's no sales figures, we know the game didn't do as well as Xbox would have liked due to the number of players on Steam.
Another studio that future Xbox owners are worried about is Rare. Again, like Double Fine, Rare has a big game to point to whenever Xbox asks what it's all about, thanks to Sea of Thieves. A successful live service game that certainly helps. However, with the cancellation of Everwild, it's unclear exactly what Rare is working on for Xbox right now in terms of new games.
Some suggested that the smaller studio under the Xbox banner should speak to Toys for Bob and ask how the studio, which had just announced its new Spyro game, managed to escape the clutches of Xbox ownership. That's a costly endeavor for any studio that wants to do it, because it means buying back your independence, and it's almost certainly too late to tell what, if any, studios will be shut down next month.
- Mark
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Microsoft
- Original release date
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November 10, 2020
- Original MSRP (USD)
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499 dollars
- Operating system
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Proprietary (Windows based)
- Processor
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Custom 8-core AMD Zen 2 3.8 GHz
- Resolution
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720p – 4K UHD
