Xbox is almost certainly planning to lay off a significant number of employees next month. Reports that cuts are coming led some to fear for their favorite smaller Xbox-owned studios, and early follow-ups to the layoff reports suggest Xbox users worried about those studios are right to be scared.
Imminent Xbox Layoffs Could Result In Studio Closures
While Xbox CEO Asha Sharma hasn’t outright confirmed that she and her team will be putting potentially thousands of people out of work this July, she did admit that things need to change. Bloomberg reported that widespread layoffs are coming to Xbox, and Sharma shared a memo that was distributed internally, seemingly in response to Bloomberg’s claims.
In it, Sharma admits that Xbox will end this fiscal year with just a three percent accountability margin, and that after spending $20 billion in the last five years, Xbox’s annual revenue has dropped by $500 million. Again, no mention of layoffs, but further reporting by The Verge claims the cuts may involve a studio closure or changes to the Xbox studio lineup.
People Are Worried About Double Fine
That additional information has Xbox users fearing the worst about where Xbox might swing its studio-shutting axe. Top of the pile is Double Fine. Although the legendary studio always has the next Psychonauts to point to if asked by Xbox what it’s cooking, Double Fine’s last two games have really been personal projects that don’t appear to have made its publishing overlords much revenue.
Double Fine released Keeper at the end of 2025. Sales data isn’t available for the title, but it seems unlikely it secretly sold in the millions. This year, Double Fine released Kiln, which, while again, there’s no sales data, we know that game didn’t perform as well as Xbox would have liked due to its player numbers on Steam.
The other studio whose future Xbox owners are fearing for is Rare. Again, like Double Fine, Rare has a big game to point to whenever Xbox asks what it’s up to thanks to Sea of Thieves. A successful live service game, which certainly helps. However, with Everwild getting canceled, it’s unclear what exactly Rare is working on for Xbox right now in terms of new games.
Some have suggested smaller studios under the Xbox banner need to speak to Toys for Bob and ask how the studio, which just announced its new Spyro game, managed to escape from its Xbox-owned clutches. That’s a costly endeavor for any studio that wants to do it, as it means buying back your independence, and it’s almost certainly too late for whatever studios are getting shut down next month, if there are any.
- Brand
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Microsoft
- Original Release Date
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November 10, 2020
- Original MSRP (USD)
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$499
- Operating System
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Proprietary (Windows-based)
- Processor
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Custom AMD 8-core Zen 2 3.8 GHz
- Resolution
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720p – 4K UHD
