Bethesda is eager to reassure you that its house is not, in fact, on fire in the wake of 3,200 layoffs (1,600 that already happened, 1,600 that are still to come) at Xbox that claimed numerous devs at the studio, including the artist responsible for designing The Elder Scrolls' khajiit and argonians. Thus, its recent announcement that it currently has Fallout 3 and New Vegas remasters in the oven as well as an incoming, Obsidian-made Fallout.

Now, in response to questions from YouTuber MrMattyPlays, Bethesda has said that the layoffs also won't affect its plans for The Elder Scrolls 6. "The roadmap [for TES6] is unaffected," said the studio. That's all you're getting. No, really.

Bethesda was ever-so-slightly more chatty about its plans for Oblivion Remastered. Yes, Bethesda has plans for Oblivion Remastered. I'm as surprised as you are.

Since a one-two punch of patches the game got shortly after it released last year, the UE5-ified re-do of one of the funniest games ever made seems to have been largely forgotten, despite still having its fair share of performance hitches and bugs. MrMattyPlays also asked if Bethesda planned to remember Oblivion Remastered on other platforms when it gets its Switch release in August. Apparently it does!

"The team working on remasters is focused on the Switch 2 launch," said Bethesda, but take heart: that version "has optimizations we hope to bring to console/PC." I also hope that. I had a good time with the Oblivion remaster despite its issues, but I'd quite like to be able to enjoy it, you know, not in spite of anything.

Anyway, Bethesda has said a few times now that it would like to be a bit chattier and more open with fans going forward, and it reiterated that here. It also said its new Glasnost policy isn't because Xbox boss Asha Sharma is making the studio do it: "Look, we read the internet too," said the studio.

"All of our fans and plenty of creators have been asking for us to lay out our road map for a long time. As bits of info or announcements come out individually, they get lost in the larger picture of all we're doing as a studio. So, we felt it was best to do it all at once and paint a clear picture for everyone. This is a shift in our approach to communication that Bethesda Game Studios has been contemplating for some time now."

I'll be honest, I can't say I completely buy that, given the timing of all this, but I suppose I welcome a more communicative Bethesda anyway.

The Halo remake has released for those who forked out for the advance access version, and they're not thrilled with what they've got. At time of writing, Halo: Campaign Evolved is sitting at a humdrum 68% Mixed rating in the Steam user review scores—a mere 2% off the score given to the game by our Morgan Park in PCG's Halo remake review.

Why are fans—who were sufficiently John-117-pilled to pay the advance access premium—underwhelmed? Oh, the classic reasons: bugs, server problems, utterly extraneous account linking requirements. It wouldn't be a 2026 videogame release without those, would it?

"Login failed. Cannot play the singleplayer game as servers are overloaded," reads a review from Steam user GoatMedic󠁳Echoo. "Screw your DRM. Combat was not evolved." That's pretty much the vibe when it comes to how users feel about signing into their Microsoft account to play. "Error 400 or 500 when trying to login to Microslop's online services to connect Steam account," says user LVL13_. "Typical."

On the plus side, Halo Studios is replying to complaints about login issues to let fans know they're fixed. "This login issue should now be resolved. If you're still encountering this issue, please close and restart Halo: Campaign Evolved," reads the dev comment posted in reply to various different login complaints.

It seems to be more and more common for devs and publishers to wade in and start answering negative reviews these days, which makes me feel a little bad for whoever it is that gets saddled with the responsibility.

Anyway, Halo Studios does not yet have a canned answer for the other complaints players have. Many are encountering technical issues, with one user complaining of "constant crashes, graphical shimmering effect with fast movement [and] inability to disable upscaling". "Disgusting frametime spikes and stutters," laments another. They're far from the only ones. Plenty of the negative reviews touch on performance problems at least once.

All Halo Studios can offer in reply to that is a comment that performance feedback is being passed onto the devs, which probably would not mollify me if I had paid extra money for advance access to a videogame.

The Bethesda Game Studios Union says it is filing a legal complaint against Bethesda for "continuing to violate labor laws in Canada" by prematurely terminating Canadian employees on July 17—the same day it dropped a huge announcement about the future of Fallout and other games.

The timing of the Bethesda infodump was suspect, to put it politely. Less than two weeks after Xbox announced that it is laying off 3,200 people and dumping four studios, Microsoft-owned Bethesda suddenly decided that it was time to confirm that Fallout 3 and New Vegas are both being remastered, that Obsidian is working on a Fallout game of its own, and on top of all that, that Fallout 5 is in early development too.

Good news as far as it goes, although as I noted at the time, the obvious intent was to reassure (or convince) followers that the loss of hundreds of employees wasn't all that big a deal, and so maybe just don't think about it so much.

The OneBGS union implied that the announcement was a more purposeful smokescreen, however, saying that Bethesda "flooded news sites announcing every expansion, remake, and sequel they could" while simultaneously blindsiding employees at its Montreal office by terminating them months ahead of a previously promised date, and with no negotiated severance.

"Previously, on Monday, July 6th, dozens of employees from Bethesda Game Studios across the US and Canada were told via video call that they were being laid off," the union said in a message on Bluesky. "They were told they would remain employed until September while the company negotiated severance with our union; this at least provided some solace and breathing room.

"However, at the end of the day on Friday July 17th the affected Canadian employees (part of the Fallout and Elder Scrolls teams) received termination letters via email. This was contrary to what they had been told in the Monday calls. These letters stated that the Canadians are to receive the bare legal minimum in terms of severance: eight weeks of pay in lieu of the minimum legal notice, any outstanding vacation pay, etc. They were to also immediately lose their group benefits health insurance."

CWA Canada president Carmel Smyth confirmed with PC Gamer that the termination letters took effect that day: "Those laid off were told in writing their employment ended effective July 17 (which was also the date of the letter that told them)."

Bethesda Games Studios’ Montreal workers are being treated especially poorly by XBOX and we won’t stand for it. Here are the details.If this upsets you let Microsoft know: feedbackportal.microsoft.com/feedback/ide...

— @bethesdaunion.bsky.social (@bethesdaunion.bsky.social.bsky.social) 2026-07-23T13:29:26.941Z

The Communications Workers of America and CWA Canada unions, of which the Bethesda union is a part, had already filed a joint complaint against Microsoft prior to July 17: Smyth told Game Developer last week that Microsoft had "unlawfully fired people without giving notice to or discussing it with the union as the employer is legally obliged to do when we are in the middle of ongoing bargaining a collective agreement."

Smyth added that the union would continue to file legal challenges against Microsoft as necessary, and the OneBGS union said in today's message that it has done just that.

"Bethesda and Xbox leadership depend on our labor to make them millions, and yet when we do, we are disposed of," the union said in today's message. "The cycle of workers paying for the mistakes of management ends here."

As it continues to try smoothing the waters churned up by the recent layoff of thousands of people, Xbox has followed up last week's big Fallout infodump with the launch of a new "Backward Compatibility on PC" program that will bring old-time Xbox games, previously exclusive to the platform, to PC and compatible handhelds for the first time.

The program is launching with four "classic original XBOX games," as Microsoft described them. I'm not sure I'd use that characterization myself, but to be fair I haven't played any of these games (although I did enjoy the original Crimson Skies), and PC Gaming Show maestro Jake Tucker informs me that "Conker was the shit."

I am not convinced, but anyway, here's the starting lineup:

• BLiNX: The Time Sweeper
• Conker: Live and Reloaded
• Crimson Skies: High Road to Revenge
• Fuzion Frenzy

All four games are now available for purchase on PC and are also offered through all Game Pass plans, and if you already own a license for them on console that will carry over to your PC as well. As well as being playable on new hardware, the PC-compatible versions will offer new features including customizable graphics options, and language and audio settings.

"This marks the beginning of a broader effort to preserve Xbox games from the past and bring them to PC over time," Xbox vice president of next generation Jason Ronald said.

Xbox confirmed with PC Gamer that the games will run on PC via emulation, and you're going to need something a little more powerful than an OG Xbox console to play them:

Minimum system requirements:

• GPU: Nvidia GTX 950 or AMD Radeon RX 550 or Intel UHD 770 or Intel Arc A310
• CPU: Min 4 Cores Intel Core i3-8100 or AMD Ryzen 3 1200 or AMD Ryzen Z2 A Processor
• RAM: 8GB
• OS: Windows 11
• Drivers and Versions: Latest Version as of January 2026

Recommended specifications:

• GPU: Radeon RX 68005 or Nvidia GTX 1070 Ti or Intel Arc A770
• CPU: 6 cores and 12 threads Intel Core i5-10400 or AMD Ryzen 5 3600 or AMD Ryzen AI Z2 Extreme
• DirectX Version: DirectX12 API, Hardware Feature Level 11
• GPU VRAM: 8GB
• OS: Windows 11
• Drivers and Versions: Latest Version as of January 2026

This initial lineup of games is perhaps not socks-knocking, but the real tale will be told by what comes next. Xbox's assertion that this "is another step toward preserving the games from the past" rings hollow for me—dependence on digital platforms is neither ownership nor preservation, and the original Xbox already has a community-made emulator that supports around 80% of the console's library.

Bringing Xbox games to modern PCs isn't likely to be a huge money-maker, but it does comport with Xbox CEO Asha Sharma's 'more exclusives' strategy—and also reflects the aspirations of her predecessor, Phil Spencer, who prior to his departure expressed concerns about the loss of videogame history and said he supported efforts to bring back old games for new audiences.

Just two months after he was appointed the new vice president of engineering at Xbox and technical advisor to CEO Asha Sharma, Jared Palmer is now the former vice president of engineering at Xbox and technical advisor to CEO Asha Sharma. In an update to his LinkedIn profile, Palmer said he's joined AI company Cognition to serve as its vice president of engineering instead.

"I’m grateful to Asha and everyone at Microsoft and Xbox for an amazing year," Palmer wrote in a very to-the-point missive. "Excited for this next chapter."

"Cognition operates Devin, the first autonomous software engineer," the company's website says, in case you were wondering what it actually does. "Devin plans, writes, tests, and ships production code on its own, working inside your codebase and the tools your team already uses."

AI is definitely Palmer's thing: Prior to his brief tenure at Xbox, he was vice president of product at Microsoft's CoreAI division, which Sharma headed up before taking the reins at Xbox. That was a fairly short spin too, lasting just eight months; before that he spent roughly four years as the vice president of AI at AI infrastructure company Vercel.

Sharma said when Palmer was appointed that he would work directly with her "on our most complex product and engineering problems, with a focus on developer tooling, taste, and infrastructure."

That's a pretty big mandate, and I have to assume that at least some of those complex problems remain unsolved. You never want to read too much into these things, and the great likelihood is that Cognition is more up his alley than a struggling videogame platform, and also that it offered him tons of money. But even so, the optics of losing a guy who was hand-picked for such a vital role just two months into the job aren't great.

Thus far, Sharma hasn't publicly acknowledged Palmer's departure. I've reached out to Microsoft for comment and will update if anyone gets back to me to wish him well, or otherwise.

I was born in the early '90s, and thanks to a life marked by periodic socioeconomic turmoil, I've come to accept—as any reasonable person would—that blatant dysfunction is the hallmark of a healthy and developed economy. The free market doesn't have seatbelts or brakes, and that's why it works. If there's any wreckage that might say otherwise, we're driving too fast to see it.

But even though I've learned that business success looks indistinguishable from a runaway vehicle, the games industry's current course feels like it's careening so close to a cliff's edge that I can't help but wonder: Are we sure anyone actually remembers how to drive this thing? Are we sure anyone remembers how to drive anything?

I know it's impertinent of me to question those most devoted to their civic duty of delivering shareholder value, but I mean, can you blame me? Being engaged in videogames over the last decade has meant watching a cohort of publisher executives inherit an industry of products, professionals, and consumers they seem to actively resent for failing to produce instant, infinite profits—profits they only ever had a vague notion how to create.

Faulty service

Take Sony, for example. It committed years to abortive attempts at bottling live-service lightning: Concord burnt hundreds of millions of dollars just to suffer a launch-week euthanization. Blue Point, a studio that built its reputation on remasters, was placed on a live-service God of War spinoff project—a notion that should have been declared doomed before it left the board room, but instead dragged the developer into a February 2026 shuttering once Sony lost patience with its own plans.

And yet, even after cancelling eight of the 12 live-service projects it said it would launch by 2025, Sony's spectacular streak of misguided endeavors somehow hasn't dimmed its live-service ambitions. Last month, Sony Interactive Entertainment CEO and president Hideaki Nishino said the publisher wants to "continue to take on" live-service projects.

That commitment that would have been baffling enough to hear on its own, but it was made farcical by the fact that just days earlier, Sony laid off almost the entirety of Bungie's Destiny 2 team after pulling the plug on its ongoing content development. Yes, years of studio mismanagement had taken a toll on Destiny 2's output. But even though it was well past its peak, Destiny's rank-and-file developers had just drawn in a massive surge of returning players for a final update, closing out almost a decade as one of the longest-running games in a market where most competitors, including Sony's, suffer near-instant collapses.

If I wanted to give my next live-service swings the best chance of survival, having access to the Bungie engineers, designers, and artists who maintained one of the most successful games in the field seems like it would be a blessing. Instead, Sony culled that collective expertise to save on costs, investing Bungie's remaining staff on Marathon, which—though it brings me no joy to say so—doesn't seem to be thriving. (Its game director just quit.)

Meanwhile, Sony has announced the approaching end of its physical disc production, marking 2028 as the year it'll start releasing new PlayStation games exclusively through digital distribution. And while that undoubtedly looks good on its quarterly balance sheet, it's a decision that could quietly damage its future prospects: While the percentage of players buying discs has steadily decreased, ending their production means strangling whatever viability remains for reselling used games. Even among PC users who haven't handled a game disc in years, some of us—myself included—would never have maintained the gaming hobby if reselling pieces of our used console libraries hadn't been an option.

Maybe that won't be an issue. But if Sony ever decides it's dealt lasting harm to its user base—well, who knows whether the leadership responsible will still be around? That's a problem for whoever happens to be answering the investor questions at the earnings call.

Bad reset

And then, of course, there's Microsoft. In an industry that's seemingly lost its ability to place any bets but bad ones, Xbox has spent the 2020s making the worst. With Phil Spencer at the helm, Microsoft's gaming division sank tens of billions of dollars on an acquisition spree that put a sizable portion of the games industry under the Xbox umbrella, staking the futures of those studios as collateral for its all-in gamble on Game Pass.

That gamble failed. Hard. With Game Pass attracting tens of millions fewer subscribers than it needed to sustain itself, Microsoft floundered through misguided marketing campaigns, mismanaged release strategies, and recurring mass layoffs, studio closures, and project cancellations.

The developers it had diligently collected were tossed, even as the company boasted about their work: Tango Gameworks was axed during a mass downsizing in 2024, a year after Microsoft said the studio's Hi-Fi Rush had exceeded "all key measurements and expectations." In 2025, Spencer insisted that Xbox's "platform, hardware, and game roadmap have never looked stronger" in the same memo that informed employees of another wave of Microsoft layoffs and closures. Those cuts included a ZeniMax team that spent seven years developing an MMO which Spencer reportedly enjoyed so much that the controller had to be physically removed from his hands during an internal demo.

Given Xbox leadership's bold strategy of achieving very little as expensively as possible, some amount of continuing fallout seemed inevitable even after Spencer's departure in February. The havoc unleashed this month under the regime of new CEO Asha Sharma, however, is an abandonment of any pretense of good-faith stewardship over the fiefdom Microsoft claimed within the industry.

On July 6, 1,600 Xbox employees were put out of work, with the axe still looming over another 1,600 workers set to lose their jobs before the end of Microsoft's 2027 fiscal year. The cuts are borderline nonsensical in scope and intent, hitting Bethesda, ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios alike, with King and Mojang now reporting directly to Sharma as part of an organizational restructuring meant to help Xbox become "one of the few companies that entertains more than a billion people each day."

Any number of self-assured finance guys will happily tell you that all Xbox did was cut unprofitable employees from its payroll, but it isn't obvious that these cuts are cunning and calculated to any greater degree than the acquisitions that led to them. ZeniMax Online Studios has been gutted of 213 employees, calling into question its ability to maintain The Elder Scrolls Online—a game which, as of 2024, had generated $2 billion in revenue across its lifetime, and had just been gaining promising momentum in the months leading up to the layoffs as it transitioned to a seasonal model.

Maybe most galling are the heavy cuts to id Software, which slashed 136 employees from a studio with one of the most storied legacies in the history of videogames that had just delivered a record-breaking launch last year. Despite assurances to the contrary from Microsoft and id Software's Hugo Martin, some of its laid off staff insist that even the studio's proprietary id Tech engine—a technical achievement that powers not only id's own games but also its sister studio's projects at MachineGames—has been left with an uncertain future.

If Microsoft does have a coherent vision for its bloodletting beyond, potentially, improving Xbox's books in advance of a spin-off or sale, I doubt it's one we'll like. Its new chief strategist, Matthew Ball, is a true believer in the metaverse and the co-founder of a "UGC game studio." The company clearly has Roblox on its mind.

ZeniMax Online Studios founder Matt Firor, who left the company after Microsoft cancelled the studio's upcoming MMO, said this year that "a giant successful videogame" is "not that stimulating" to Microsoft, which seeks a greater scale of profit. What it saw in the project, he reckons, was cost and risk: "We're a number on a ledger, and if that number is large, it is ripe for analysis, shall we say."

For now, Microsoft is making a show of doubling down on big series like Fallout and The Elder Scrolls, even as it lays off many of the veteran developers making them. The confirmation that there's a new Fallout in the works is slim consolation when it's in the hands of an executive culture that's so clearly disinterested in properly supporting the studios making its games and willing to toss out years of work when it decides to change course.

Deep cuts

Launching a successful game isn't as simple as providing game developers with job security; I won't dispute that. But it's been made abundantly, repeatedly clear that layoffs and employment uncertainty during a game's development don't help.

Whatever short-term gains those layoffs provide only intensify the long-standing difficulties driving the industry towards an existential crisis. Overlong production cycles and exponential budget increases are worsened every time a studio is forced to reassemble its detonated workflow to account for the institutional knowledge lost whenever a dev is cut loose. Even if a replacement is eventually hired, proficiency with studio-specific tools, conventions, and workplace dynamics doesn't come immediately—and that lost time isn't free.

The trend isn't hard to identify: Destiny 2's downward slide of expansion delays and disappointing launches followed back-to-back waves of layoffs as Bungie, under its new Sony ownership, tried to stem the bleeding of its leadership's overexpansion. The prolonged and turbulent development of Dragon Age: Veilguard included a layoff of roughly 50 BioWare employees in 2023. In 2024, Ubisoft launched the infamously troubled Skull and Bones, the ill-fated XDefiant, and the underperforming Star Wars: Outlaws—three games whose development cycles coincided with company-wide cost-cutting measures the publisher initiated in 2022, which let it shed 2,000 jobs over the next two years through hiring freezes, redundancies, and studio closures.

Life is Strange: Double Exposure—multiple layoffs before launch. Civilization 7—30 layoffs in 2023 as part of a wider 2K restructuring. Name a game that didn't have a stellar launch, and there's a good chance there were layoffs at its studio or publisher that left its developers with damage to rebuild or doubts about their livelihoods.

Is it any surprise, then, that Capcom's currently enjoying a multi-year hit streak after avoiding mass layoffs since 2018? Or that Larian, a studio with a strong history of employee retention, pulled off a generational breakout hit like Baldur's Gate 3?

Crash course

Acknowledging the long-term damage that layoffs are causing, however, would mean returning to a framework the industry's current leadership has largely abandoned since the ascent of games as services, as platforms, as forever games. Cost-cutting has been the primary economic activity of the games industry for years.

The industry's giants perform so many layoffs for short-term gains that the success of any traditional game launch feels like an oversight. And I'll admit it's not without reason: Data reported by analyst firms like Newzoo indicates that gamers are spending as much as two thirds of their collective playtime on games more than six years old, with a concentration on platforms like Roblox and Fortnite.

But sales successes like Helldivers 2, Arc Raiders, Meccha Chameleon, and Resident Evil Requiem are proof that there remains a lasting hunger for quality, novelty, and variety in traditional, purchasable games. How many more games like those might players have enjoyed had industry giants not maintained a myopic obsession with creating an ex nihilo Roblox of their own? Why would you stop playing Fortnite when it's felt like all anyone's done in the last six years is try to gouge you for the privilege of playing Worse Fortnite?

Roblox and Fortnite didn't become Roblox and Fortnite by choosing to become Roblox and Fortnite. Roblox and Fortnite happened. Neither was an overnight juggernaut: Roblox's original launch was in 2006, almost three years earlier than the first public alpha release of Minecraft in 2009, and it steadily ballooned over two decades. Fortnite as we know it today was cobbled together in 2017 from the six-year-old bones of an entirely different product concept to offer a free-to-play alternative that could capitalize on the ascendant PUBG zeitgeist.

The Roblox and Fortnite we recognize today were created through the years-long accretion of strategic decisions unique to their time-and-date contexts. A major game publisher can't simply choose to make their own Roblox because it's not possible to choose to become a phenomenon.

But these attempts to conjure perpetual revenue platforms continue as companies seek to make more money with fewer employees, build new gig economies, and lobby the public to please, please just accept AI-generated art already. Just making good games isn't an exponential growth opportunity—and those are the only growth opportunities we're meant to care about.

And maybe they're right. Maybe we can finally believe that something can be made without its makers. Maybe you can give the keys to someone who knows they won't be harmed either way, no matter how close they get to the cliff. Maybe the line can keep going up.

Or maybe we could put someone else back in the driver's seat before there's a crash.

One of the biggest questions left in the aftermath of the Xbox layoffs earlier this month is the state of legendary Doom and Quake studio id Software. Some have claimed the cuts ran so deep that the studio's ability to make new games and support its proprietary idTech engine are in question, while id Software itself published a statement, later echoed using almost identical language by TESO studio ZeniMax Online, that it's merely been reduced to a headcount comparable to what it had a decade ago, when it developed the 2016 Doom reboot—so, basically, everything's fine.

Now studio director Hugo Martin has weighed in, and unsurprisingly he's in the 'all is well' camp. Speaking in a new Slayers Club Live stream, Martin said "reports that we've been nerfed into the ground and gutted and we have 50 people [remaining]" are not true.

"We're the size we were when we made Doom 2016, and idTech is very much alive and well. You have to understand, we have idTech engineers both in Frankfurt and at MachineGames. We collaborate quite a bit. So the idTech is there, the Doom team is here, and we're excited to share with you guys more of what we're working on in the future when it is appropriate and approved."

According to an Aftermath report, id's office in Frankfurt—quite small to begin with—was also cut in half by the Xbox layoffs, being reduced from 12 employees to six.

That statement from Martin was fairly safe and anodyne, obviously intended to calm the nervous crowds without committing to anything specific, and I think the truth is that we're not going to know the true impact of the cuts until we know what id Software gets up to next.

But he had more to say, and Martin's subsequent comments struck me as considerably more tone deaf. "The fact that we made a game that people like and is critically and commercially successful ... that's good for everyone. For the people at the studio, for the people who unfortunately we had to say goodbye to, I think that helps everyone, and we really appreciate your support.

"What matters the most is that the games are good, and I'm so happy that people—it's just a good thing for everybody."

As someone who likes and appreciates it when the games are good, I have to say that I'm not sure that's really the most important thing at all, at least not compared to the long-term health of the industry that makes them—which of course means the people who make them. Technology advances at a sometimes alarming pace, it's true, but the headlong rush to embrace those advances, heedless of any consideration beyond the bottom line, is not going to lead us to a better place—or to better games. Pretending that everything is fine as long as the games are good is a quick way to end up in our list of "25 foolproof ways to get laid off in the videogame industry"—which, yes, includes making an acclaimed and commercially successful game.

Martin isn't the only one looking to reassure gamers that everything is a-okay. Earlier today Bethesda dropped a massive infodump on its plans for the future, including confirmation of a new Fallout game being made by Obsidian, remasters of Fallout 3 and Fallout: New Vegas, and word that Fallout 5 is in pre-production.

Less than two weeks out from massive Xbox layoffs that will put 3,200 people out of work, Bethesda Softworks has laid out its plans for the future, including confirmation of a new Fallout game from Obsidian and that remasters of both Fallout 3 and Fallout: New Vegas are happening.

The full message covers pretty much everything Bethesda does, including a confirmation that Starfield, despite a middling reception and flagging player numbers, will continue to receive updates. There's also a nod to "more planned for the future" for The Elder Scrolls Online, even though the game and the studio making it both look pretty rocky right now.

But Fallout is the focus, and there is a lot going on. "Fallout is one of our biggest priorities today," Bethesda wrote. "Fallout 5 remains our long-range destination, and we have multiple Fallout projects in active development right now."

Included among those projects is a Fallout 76 expansion scheduled for 2027 called Raven Rock, which will serve as a prequel to Fallout 3, and as mentioned, the Fallout 3 and New Vegas remasters—no dates were revealed, but simple confirmation that they're both in development is long overdue.

The previously reported Obsidian collaboration is also confirmed in the announcement, and to my reading at least, it sounds like it will be another non-numbered entry to the series, as New Vegas was. Following the mention of Fallout 5, Bethesda seemed to reference the Obsidian game as an entirely separate thing: "The wasteland continues to expand as we team up once again with our longtime friends at Obsidian Entertainment. We're happy to confirm they're working with us on a new Fallout project. We'll have more to share in the future."

It also sounds like Fallout 5 is much further out than the Obsidian joint: Bethesda said that game is currently in pre-production, while the majority of the studio is focused on The Elder Scrolls 6. There's still no date on that either, although Bethesda at least acknowledged that "we know it’s been a very long wait for the sequel."

While the layoffs aren't referenced directly, Bethesda said it will be "bringing our teams closer together so we can get our games into your hands sooner," although to me it sounds more like a straightforward consolidation of studios that were hit hard by layoffs: "ZeniMax Online Studios will partner closely with Bethesda Game Studios on The Elder Scrolls franchise, while continuing to deliver incredible new experiences for The Elder Scrolls Online."

All told, it's quite the infodump, despite being short on specifics, and clearly aimed at reassuring fans that the wounds suffered by Bethesda in the Xbox cuts are not mortal, or even seriously damaging—beyond the hundreds of people who find themselves out of work, that is. How it all actually works out, we'll just have to wait and see.

Xbox's 1,600 layoffs last week were brutal on the developers impacted, and will have uncertain ripples on the industry for years to come—however, a recent report from Game Developer states that the "reset" itself was chaotically implemented.

Speaking with multiple sources, the report shares that employees across Xbox were "informed their jobs were being eliminated during a fleeting video call with management at their respective studios … Chat was disabled. Microphones were permanently muted. In one instance, cameras were automatically turned off—meaning those delivering the news couldn't even see their colleagues' faces."

One source told Game Developer that the call regarding id Software, where over 130 people were laid off, "lasted under 60 seconds," with an additional ask for ousted developers not to come into the office despite the fact that many had already begun commuting.

"Once the news had been delivered, Slack and internal email access was reportedly pulled within 48 hours," Game Developer states. "It left colleagues scrambling to make sense of the situation using unofficial channels—many of which are overseen by union members and organizers."

"Many of us did not know what was happening for weeks," one developer told the site. "Higher ups didn't know or did not say. It was left to all of us to speculate and spiral and worry." Another source from id Software added: "Does Microsoft care? Absolutely not. And they seem to actually put some level of effort and care into making it as painful as possible."

There's also the hanging sword of Damocles that is the additional 1,600 layoffs, which Xbox CEO Asha Sharma said would be happening before 2027. This looming aftershock has understandably been disastrous for morale. Another developer tells Game Developer that they "don’t know how anyone remaining at Xbox studios can feel safe knowing another 1600 cuts are coming.

"And even then, what happens after June 2027? Will we get layoffs in July for the third year in a row?"

I'd honestly be asking myself the same thing—mind, I'm not a CEO responsible for 'returning to growth' or what-have-you, but given the year of shame Microsoft had in 2025, I can't help but ponder if it was the best thing for morale to promise that another 1600 jobs would be lost at some point by 2027.

Point being, people who are waiting for the other shoe to drop aren't usually able to do good work, or might reasonably be looking for new work (not that that's easy, right now). That doesn't, to me, seem like a helpful environment in which to get 1 billion daily players.

One of the major victims of Xbox's "reset" is id Software, which suffered a whopping 136 layoffs—a move one artist likened to reducing it to a "support studio". This is a line that Microsoft itself has tried to counter, both via official studio channels and a statement given to Windows Central last week. More on that in a moment.

One primary concern was that the studio's engine, id Tech, would be scuppered in favour of Unreal Engine. This would be a huge loss. As my fellow PC Gamer writer Wes Fenlon described it, id Tech "runs like a greased-up bat hurtling out of hell at a time when its competition is leaning on AI upscalers to crack 30 frames per second."

Windows Central spoke to Microsoft about that concern, and the site was told "There are dozens of people working on id Tech across multiple locations. Reports that there’s only one person left in Texas are inaccurate."

But now, a comprehensive Game Developer report, speaking to an id Software worker who was laid off, seems to contradict that statement: "They've just gotten rid of all the people who could ever fix, maintain, or change [id Tech], so it's most likely going to end up in the trash can. That's where I just come back to: It completely feels like success is detached from your ability to keep a job, and I think that's basically provable."

They continue: "There were five members of the VFX team, including the lead [that were laid off]. Our technical art and design part department now only has its lead. That's it. All other four of the members of the team were let go. The institutional knowledge [that has been lost] on the id Tech side is immense. [...] I cannot imagine a path forward where they make another game in id Tech."

At the moment, it's Microsoft's word against the laid-off staff's—and to be clear, I am neither surprised nor judgemental that there are developers at id Software who are currently toeing the company line. This is a historically terrible time in the industry to be looking for work, given the sheer volume of talent that has been sloughed out of mainstream studios over the past few years.

If (and I am speaking in hypotheticals, here) Microsoft has ordered these studios to broadcast the message that everything is pretty much fine, I don't resent those studios for doing so. It's not the fault of these studios or their developers to be put in a position where dissent might lose them their work.

But I think it's a little telling that, when a source is allowed to speak anonymously and has nothing left to lose, the picture painted is far more pessimistic. Whether id Software is able to make another game in id Tech will be proven in the years to come—but it's clear there is a stark difference in optimism between the company message and the experiences of those laid off in last week's massacre.

ZeniMax Online head Joseph Burba is among over 200 staff laid off at the Elder Scrolls Online studio last week as part of Xbox's recent round of mass layoffs. Burba has been with the studio for 14 years, and has worked on The Elder Scrolls Online since its 2014 launch. He was promoted to studio lead in July last year.

The news comes via Game File, who obtained a list of roles impacted by Microsoft's recent purge from the state of Maryland, where both ZeniMax Online Studios and its parent company, ZeniMax Media Inc, are based. In addition to Burba, ESO executive producer Susan Kath, game director Rich Lambert, and production director Ala Diaz have all lost their roles.

According to documents seen by Game File, all four will remain at the studio for "the next few months" to help transition a new leadership team, which will consist of ESO game lead Nick Giacomini, and business operations lead Josh Henderson.

"We have tremendous confidence in Josh and Nick, the future of this studio, and the continued growth of ESO," an internal memo penned by the outgoing leadership read. "With exciting experiences still ahead for our players as we wrap up work for Update 51 and beyond, we believe that your passion, creativity, and commitment to each other and the community will continue serving as the heartbeat of ESO."

ZeniMax Online has shrunk considerably since late 2024, when its headcount was roughly 461 if union membership is any indication. After layoffs in 2025 and 2026 the studio has lost at least 40% of its workforce. Lopping off executive staff is probably a quick and easy way to save money, but it also means destroying—especially in the case of Burba—decades worth of institutional knowledge.

It's unclear how "growth" will be achieved for ESO in light of how severely the studio's head count has contracted, but according to ESO community manager Kevin Gbolie, writing after news of the layoffs, "the plan is still to deliver great content, and we will hopefully have an update soon."

Last week's seismic Microsoft layoffs also impacted ZeniMax Media: of the 379 in total, 213 were from ZeniMax Online Studios, and 166 from ZeniMax Media, the latter including Bethesda Game Studios and Bethesda's publishing concerns.

The Steam Machine might have turned out to be a disappointment (mostly down to its price), but the Steam Controller remains a very useful thing.

Should you be the tinkering sort, the OpenPuck project doubles down on the Steam Controller's Swiss Army Knife-like tendencies, allowing it to emulate Xbox, Nintendo Switch, and PlayStation controllers.

The OpenPuck is the work of Github user safijari, and the project is based around a Pro Micro NRF52840 board. This $8 device can be flashed to emulate the Steam Controller's regular wireless puck, and translates the controller inputs to their console equivalents while also enabling Steam-specific features (via Hackaday).

Although safijari says "the Switch and PS3 modes have been verified to work on real consoles," so your mileage may vary. By the looks of the project's page on Github, DualSense emulation is currently supported for PC only, and there are various caveats for emulation support to consider for each potential mode.

Pairing involves connecting the board and the Steam Controller to a PC with a USB Type-C cable and flashing the microcontroller, after which the controller itself can be wirelessly connected.

"At any point you can hold all four back buttons and press X to switch over to Xbox mode which maps all canonical inputs to their expected counterparts," safijari confirms. "In this mode the right trackpad acts as a mouse, but at present this only works in Android and SteamOS."

Holding the back four buttons and Y switches to, err, Switch mode (with gyro and haptic support), whereas the same buttons + B puts it in "Lizard" mode, where the Steam Controller behaves as it does when Steam is closed—while it's still open.

"This has a few advantages," says safijari. "The biggest one being that you can use inputs when a high privilege application is in the foreground (like the Task Manager, when using Steam if you wanna be able to do that Steam must be run as admin)."

The project seems to be a work in progress, and the author warns that "Every part of this project HEAVILY used LLMs," so take that for what it's worth. Should you wish for a chassis to contain the puck properly, you'll also need to 3D print one for yourself—with several options offered.

Unfortunately, the OpenPuck isn't capable of charging your Steam Controller like the regular puck, as it lacks any pins. Otherwise, though, it seems to be a multi-talented little marvel.

As part of this project, safijari also includes reference to ReversePuck, which is their way to emulate Steam Controller inputs (except the grip controls) on the Steam Deck in order to use it as one of the world's most expensive console pads. It's an interesting part of the project for sure.

I had a feeling Valve's new hardware would excite the imaginations of the maker community, and by the looks of things, they're already beavering away finding all sorts of uses for the latest Steam-branded offerings.

Caught up in the wave of Xbox 'reset' layoffs that occurred last week, id Software has been hit particularly hard. And while official statements given by the studio maintain that it's still of a decent enough size to make the kinds of games it used to, that sentiment's at odds with many of the developers who were laid off.

It's even at odds with some of the devs still working there. id Software producer Andrew Willis, who was a large part of the studio's efforts to unionise back in 2025, has made a series of posts on LinkedIn which are still (understandably) furious, despite the studio's official stance that things aren't all ruined.

"I think the only way to fix the video game industry at this point is for developer owned studios to start rising from these studio closures and layoffs," writes Willis, "We've got to learn from the past, be fiscally responsible, and create an environment of sustainable growth (though growth should be a byproduct of success, not a goal in and of itself)."

A "return to growth" was, after all, mentioned in Xbox CEO Asha Sharma's announcement. "we will return to growth in 2027", Sharma said. Mind, that was also in the same post that announced there'd be another 1,600 layoffs happening by 2027, but hey. It's a pretty standard tag-line for most big businesses—something to keep the shareholders happy.

Either way, Willis remains unimpressed: "It's the only path forward I can see, and these large publishers and monopolies have proven themselves terrible stewards and somehow even worse financial managers. If the people who create the value own that value, good things will follow."

In a follow-up post, Willis adds: "The games industry must change if it is going to create art and franchises that have long term sustainable value—right now it feels like the monopolies that control it are simply trying to extract as much goodwill and value (that took decades to build) as they can with little concern for the diminishing returns it's leading to.

"This is what happens when the people who control it (most ivy league MBAs) do not play games, have never shipped a game, and fundamentally do not understand the industry they manage. You'll never get another WoW or Morrowind in the current climate."

While I'm not wholly convinced that you need to play videogames to be in charge of a company that makes them, I do think you need to be humble enough to delegate or listen to the people who do—and humility is clearly rare within the executive suite.

I also agree with Willis' assessment that you probably wouldn't get another World of Warcraft in this climate—it's something I've spoken to on our MMO column before. But, and this might be proving his point, I think we're getting plenty of games that are at least on-par with the classics from smaller independent studios.

That doesn't mean it's easy, though. Studios like Larian, which is shareholder-free (okay, Tencent has a non-controlling stake, but it's Tencent. Those guys are everywhere), are a bit of an anomaly—Larian itself surviving brushes with bankruptcy in the past. Point being, sticking it to the man is hard bloody work—worth doing, mind, but not a guarantee of safety for anybody.

Just a week after South of Midnight developer Compulsion Games returned to independence amidst the latest round of sweeping layoffs at Xbox, the studio is looking for work. In a message posted on LinkedIn, Compulsion said it is "expanding opportunities to collaborate with studios across the games and entertainment industry."

"We invite partners to leverage the talent and creativity of the award-winning team behind South of Midnight, a game that was honoured with a BAFTA Award, a Peabody Award, seven Canadian Game Awards, and recognized on multiple 'Best Games of 2025' lists," Compulsion wrote.

"With deep experience in creating acclaimed original IP, we bring our artistry, technical expertise, and collaborative approach to every project. We are excited to support the development of memorable experiences that engage and entertain players around the world."

It's a disheartening message. South of Midnight did indeed win all those awards and more—one high-profile win that went unmentioned is the Games for Impact crown at the 2025 Game Awards—and we liked it quite a lot too: It earned at 83% in our review, and reviewer Andrea Shearon went on to play through it twice after after the fact, selecting it as her Personal Pick Game of the Year for 2025.

It wasn't a huge seller, though, and all that critical praise wasn't enough to secure Compulsion a future as an Xbox-owned studio, much less ensure it a follow-up release. Microsoft, which acquired Compulsion in 2018, earned some plaudits for allowing it to go independent rather than simply closing it, but my worry at the time seems reinforced by this post. Cutting Compulsion loose as an "independent" studio, especially in the oxygen-deprived environment the game industry has blundered into, may have merely delayed the inevitable falling curtain—and, one might argue, gives Xbox a way to avoid blame should that happen.

Compulsion launched as a support studio—its website says it got its start in 2009 "as a home office providing services to other game studios," including THQ and Atari—so this isn't entirely unfamiliar territory. But the environment then was very different than it is today: Sweeping layoffs and studio closures over the past several years have left countless developers without work in an increasingly constrained industry.

Quite a few Compulsion employees seem to share that feeling: A couple weeks before the independence announcement, numerous people at the studio began actively looking for new jobs, reportedly with the blessing of studio leadership.

As reported by Massively OP, senior developers at ZeniMax Online Studios said that the company has returned to its circa 2015-2018 headcount, before it staffed up for the development of canceled MMO Blackbird. The estimate is similar to one recently proffered by id Software in a statement on X, "The Everything App."

Unofficial Elder Scrolls Pages (UESP) Discord moderator Baratron relayed the statement from the Elder Scrolls Online Tavern event in Hesse, Germany, where a number of devs are interacting with fans.

"According to both Jason Barnes (Associate Design Director) and Jessica Folsom (Associate Director of Community Management), ZeniMax Online Studios is now at the same size as it was when they made both Wrothgar and Summerset,” Baratron told the UESP Discord. "Which, as we know, are both highly acclaimed DLCs.

"So while the layoffs are extremely upsetting for everyone involved (of course including players), this is not necessarily the end of new content or the game going into maintenance mode."

For context, ESO's Orsinium (containing the region of Wrothgar) and Summerset DLCs were released in 2015 and 2018 respectively. In id Software's statement last week, it wrote that "The team today is about the size we were when making Doom (2016)." According to WARN Act filings, ZeniMax Online and id Software laid off 213 and 136 employees respectively. ZeniMax also laid off 62 people in 2025 immediately following the cancellation of Blackbird.

I have some sympathy to members of these studios wanting to counter narratives of their decline⁠—see also Outer Worlds 2 director Brandon Adler's harsh words for outsiders who flippantly claim the studio no longer has the same developers who made classics like KotOR 2 or New Vegas. It is also not inherently sinister for two studios with the same parent company to adopt a similar PR line.

At the same time, it doesn't sit right with me. It is an admission of undoing a decade of growth and development at these studios. Even if the headcount is the same on paper, a studio on the upswing is a vastly different environment from one that's just been gutted. The 136 people fired from id and 213 from ZeniMax were brought in for a reason. Game development has changed in the span of 10 years.

Bungie and BioWare probably hit similar headcounts as in their golden ages amid wave after wave of layoffs in the 2020s, and it did not improve their output or efficiency. It did not bring back Halo: Reach or Mass Effect 2.

If this is a PR justification Microsoft would like to exploit in the coming days, I have no interest in indulging it. It carries the tacit implication that those who were laid off did not matter, and beckons to that nasty "lazy devs" rhetoric.

It's a line of thinking that, at its heart, allows for this wanton misery and mismanagement to have been a necessary course correction by the adults in the room. I have no patience for it.

I'm somewhat prone to pessimism in this column, though that's not without cause. MMOs aren't exactly a dying breed, per se—we've got Guild Wars 3 to look forward to, and most of the old guard, while a little grey in the beard, have respectable playerbases and are thrumming with things to do.

But it's hard not to feel my blood pressure notch up a few numbers at this week's Xbox layoff news for… well, a number of reasons, really. I'm irate in particular, however, at the current state of Zenimax Online Studios (ZOS), developers of The Elder Scrolls Online, who seem to have become Microsoft's punching bag.

Left hook

I'm hard-pressed to think of a more depressing set of facts than Zenimax's past couple of years—back in July of 2025, Microsoft put thousands of people out of work, including those at ZOS and, more to the point, the cancelled Project Blackbird.

Blackbird was Zenimax's next major project, and while I can't say for certain it would've revitalised the MMO market or anything, we sure as hell need more new MMOs. It was in development for over half a decade, something the then-founder Matt Firor had described as, admittedly, a bit of a "large bet."

Still, the odds weren't bad. The then-CEO of Microsoft Gaming Phil Spencer reportedly had to be torn away from it, and it was slated for a tentative 2028 release. And listen, even if you've got a cynical heart—five years of work from a development team of around 300 people getting flushed right down the toilet, along with 62 jobs (per a WARN notice), is a damn shame.

It was something that shook Zenimax to its core—but the studio did manage to pull through. I actually spoke to some of them back in January, speaking with executive producer Susan Kath who said that "the team has very much rallied … I see a lot of enthusiasm from the team as we're going forward. Folks are excited about their work. I'm excited for them to be doing this. We're looking forward."

Game director Nick Giacomini also echoed: "We are excited by what we're doing. We're excited by this transformation, this change, this evolution. It's like a second wind, and we've definitely got our eyes on the future, because this is our home. We are determined to make it continue to be so for us, for our players, for as long as we possibly can."

Indeed, things were looking up for ESO. It had found itself in a bit of a rut, as most MMOs do from time to time—but a new commitment to a seasonal model and a whole heap of reworks seemed dedicated to addressing long-held quality-of-life complaints and shaking things up.

The air, to me, felt like a smaller-scale version of the turnaround that World of Warcraft had after the disasters of Shadowlands, commitment to roadmaps and all.

Right hook

Fast-forward less than half a year later—an unconscionable amount of time in shareholder land, I have to imagine—and Zenimax Online Studios has been all but gutted. As PC Gamer's own Ted Litchfield figured out earlier in the week, an estimated 60% of the studio has been laid off between 2025 and 2026, with 213 of those layoffs happening this week.

That's a reduction of 275 developers at the studio in a year and a half, and, look—I don't want to cry that the sky is falling for ESO. Quite the opposite, I am hoping against hope that it'll manage to find a second wind somewhere down the line—but you simply cannot lose the contributions of 275 people without a massive dip in quality.

It's a response echoed by employees at the studio itself. Andrew Young, who left it in 2024, wrote: "There’s really no one left and no changing it now". Other employees were sent reeling, stunned at the absence of teams they'd been working with for years and forced to pick up the pieces.

I want to point out that Xbox saw fit to lay these people off literally as its first season launched—with layoffs occurring on Monday July 6, and the season launching on July 8.

Just imagine it—you work on ESO, the layoffs from last year hit you hard, but you're determined to turn things around. You're using words like "rallied" in interviews, you're finally getting to sort out complaints players have been having for years, you're trying new things. And after a year of work, your first season of the new era of your game is coming out. Two days before it arrives, Microsoft lays off 213 of your team. That, or you're shown the door yourself.

This is despite the fact that your game has brought in over $2 billion in revenue over its lifetime. That figure, posited in 2024, was touted 10 years after the game's launch. That means that ESO was raking in an average of $166 million a year.

Now obviously, that figure's going to have dips and peaks, that's just the nature of doing business—but the sheer boneheaded, next-quarter blinders you have to have on to believe that a game that historically brings you in $166 million annually somehow isn't profitable seems absolutely absurd to me.

And sure, maybe this reaction holds water if the fanbase wasn't liking your new changes—except they did! Here's just a few quotes from the Elder Scrolls Online subreddit:

• "What the fuck man. ESO was really getting a second wind," says u/PompeiiSketches.
• "The game seemed to be on the up and up, what happened?" says u/Crimsonmaddog44.
• "Absolute insane behavior to make cuts to the team that has gotten tons of players (myself included!) back into engaging with the game" says u/Ion_bound.

In a post on the game's forums, understandably stating that Zenimax'll have to be shifting its schedule around a bit, support is present, too:

"I just came back because of your roadmap for the future, and knowing now the people working on it are getting cut by a company that's billions in the green is really heartbreaking," writes one user, "know we haven’t always been happy with you all but those affected, whether they remain or not, did not deserve this. Especially in an era where things were finally looking up again. I am horrified," writes another.

This really does paint a picture of an MMO that was finally getting its sea legs back, just for Xbox to sweep in and knock it right off its feet again.

Holding shares

I will state it plainly: I think the way that Zenimax Online Studios has been treated is cruel, senseless, and short-sighted. There's no capitalist argument to be made about shareholders or prices or changing industries that's going to reach my ears on this one—it's downright unconscionable.

This is a studio that was making a profitable MMO with big dreams for the future, one that had somehow, miraculously, recovered from having a massive project that'd been in development for half a decade shuttered overnight. One that was just about to release the first proper season of its new imagined identity for the game that earned Microsoft over $160 million a year for the past decade.

It has been sacrificed almost wholesale on the altar of growth, by a company that spent over $68 billion on Blizzard, with Microsoft itself spending over $80 billion in 2025 on AI pipedreams. Its developers have been laid off to support a fantasy of getting 1 billion daily players, somehow, in a portfolio that's down 1,600 working roles and will be down 1,600 more by 2027.

More than that, this is an MMO we're talking about. If ESO takes a nosedive from here on out (and god, I am hoping it doesn't), that'll be one less game in an already-dwindling genre that's struggling to put up a fight amongst the unhealthy ambitions of the current industry's gluttony. ZOS deserved better.

A star in the games business Twitter circuit, investor and analyst Matthew Ball has made waves in the industry over recent years with his "State of Video Gaming" slideshows, which in some corners have become doctrinal explanations for gaming's 2020s woes.

Now Ball has the chance to put his analysis directly to work at one of the biggest gaming companies on the planet: Xbox CEO Asha Sharma brought him on as chief strategy officer not long before initiating her "Xbox reset," which will result in 3,200 layoffs and see multiple studios cut loose.

Speaking to The Game Business after he was hired (before this week's "reset"), Ball said that step one for Xbox is shoring up its console business. But new Gears of War games are unlikely to achieve Sharma's ambitious goal to entertain "more than a billion people each day." So what's the plan?

The big-picture Xbox strategy hasn't been shared (and is surely still developing), but Ball's history suggests that Tim Sweeney and Roblox will be major inspirations.

Ball is a big believer in "the metaverse." He authored a book on the idea, "The Metaverse: Building The Spatial Internet," which was published in 2022 and revised in 2024, and co-founded the Roundhill Ball Metaverse ETF, an investment fund with stakes in Roblox, Microsoft, Nvidia, cryptocurrency exchange Coinbase, and a variety of major game publishers and tech firms.

Ball also co-founded a "UGC gaming studio" that says it's creating virtual worlds for Fortnite, Roblox, and Minecraft. The company, Prosimetrum, is credited as the creator of Steal the Shark, a Fortnite island developed by Brazilian studio Dojo Maps.

Ball is a passive partner in the business, not a decision-maker, according to a source familiar with the matter. Also associated with Prosimetrum is former Square Enix director of business development Jacob Navok, who currently runs AI company Genvid and has argued that "Gen Z loves AI slop."

The metaverse according to Ball

A universal definition of "metaverse" doesn't really exist, but in his book, Ball describes it as: "A massively scaled and interoperable network of real-time-rendered immersive virtual worlds that can be experienced synchronously and persistently by an effectively unlimited number of users with an individual sense of presence, and with continuity of data, such as identity, history, entitlements, objects, communications, and payments."

Essentially, it's the virtual world described by '90s sci-fi novel Snow Crash, and more recently Ready Player One: A network of immersive virtual worlds in which everyone's identity is persistent.

Ball does not suggest that this sci-fi vision will come to pass without friction—skeptics have had "a real basis for their skepticism," he says in his book—and it's certainly faced a lot of friction this decade.

Facebook's 2021 rebranding as "Meta" and Mark Zuckerberg's goofy VR avatar were mocked rather than embraced, NFTs were written off by many as worthless status symbols for gullible celebs and vectors for outright scams, VR and AR headsets have yet to sweep away old-fashioned screens, and after a metaverse hiring boom, the tech industry shed thousands of workers.

Above: Ball's recent interview with The Game Business

But among metaverse true believers, it's an inevitability, not just a dream. Ball concludes that he is "certain that the future will be increasingly centered around real-time-rendered 3D virtual worlds and networks" and predicts that computers and the internet "will evolve and be redesigned in support of the Metaverse." (A thought that could influence future Xbox hardware.)

Similarly, Epic Games CEO Tim Sweeney said in a 2024 conversation with Ball and Snow Crash author Neal Stephenson that, while a certain social media company's attempt to get everyone working in chic virtual offices was "just totally lame," the metaverse is the "inevitable future of real-time 3D in gaming."

Epic continues to pursue its metaverse vision: The recently announced Unreal Engine 6 is all about helping developers link up their in-game economies and social features so that players can take friends and purchases from one game into another.

Hints at Xbox's future

During his interview with The Game Business, Ball recalled Sharma asking him whether Xbox was "fixable." His response: "I'm a strategic optimist. I think it is incredibly defeatist to think that there is any scenario that you can't do better, that you can't improve."

So far, improvement has meant reduction: Aside from parting with four development studios and laying off thousands, Sharma has announced a desire to simplify Xbox's management structure and to invest "with greater focus, greater discipline, and greater clarity."

But Sharma also says that Microsoft is not reducing investment in Xbox, and there are hints about where the money will go (aside from toward getting The Elder Scrolls 6 out the door). The CEO said, for example, that rather than trying to own all the good indie studios, Xbox "will help independent creators succeed by providing open development tools and audiences to realize their vision." There are echoes of Epic's tools and platforms strategy in that remark.

Ball's interest in the metaverse doesn't necessarily mean that he was hired by Xbox to pivot the publisher toward that medium, but it stands to reason that the subject he dedicated book-length analysis to will feature in his advice. At the least, an increased focus on user generated content feels likely, and Microsoft could strengthen its relationship with Epic Games and Unreal Engine ("Fortnite is the future," Ball wrote in 2019).

Regarding UGC, it is notable that Minecraft developer Mojang will now report directly to Sharma, as it's the closest thing Microsoft has to Roblox.

For now, Ball has not hinted at any radical plans for Xbox's future. He said in his Game Business interview that Xbox's console business is "durable and valuable and important" and that upcoming shooter Gears of War: E-Day "looks terrific."

In his book, however, he predicts that the metaverse will be with us quite soon, suggesting that if Xbox is going to take advantage of such a radical transformation—should it actually come to pass—it ought to get to work on it with urgency.

"Though skeptics will shape the discourse," Ball wrote in his book, "I'd guess that by the end of the current decade many if not most of us will agree that the 'Metaverse' has begun (though even in hindsight, there will be no precise date of its start, nor will we be able to predict when it will arrive in full)."

I've seen a lot of complaints and concerns about the layoffs at Xbox that put 3,200 people out of work and resulted in the spinoff of four studios—eventually five, once the Arkane situation is sorted. One I haven't run across is a claim that it's all part of an effort to take jobs away from Americans and replace them with non-Americans on H-1B visas. That changed today, though, when Microsoft chief communications officer Frank X. Shaw took to social media to deny the claim.

The allegations are apparently rooted in stories like this one from Fox News, with the headline, "Fury erupts as US brand fires 1,600 employees after securing thousands of foreign worker visas."

Fox noted that Microsoft is laying off roughly 4,800 employees in total, the bulk of them from Xbox, while at the same time acquiring authorization "to hire from foreign countries 2,273 employer-sponsored, non-immigrant workers under what is known as the H-1B visa program."

Quoting a series of random people on X, the report states that "furious online critics claim that American jobs are being unfairly handed to foreigners," adding that "some online critics [have] claimed Sharma's Indian heritage played a role in firing the Americans, given the percentage of H-1B workers from India."

The H-1B is a non-immigrant visa that allows US business to hire foreign workers to fill certain speciality occupations. Criticism of the program and its impact on US workers has waxed and waned over the years, but it's taken on particular prominence during the second Trump administration: Earlier this year, Trump attempted to impose a $100,000 application fee for H-1B visas, although that was eventually overturned by courts. The Republican party continues to lean into it as a wedge issue, however: Vice President JD Vance, for instance, said during a recent speech that "American jobs ought to go to American workers and not foreign fraudsters, and the Department of Labor is fighting back against it."

It's the sort of rhetoric that can lead to bad places, and the accusations of H-1B visa abuse, accompanied by plenty of naked racism, has spawned countless posts, re-posts, and likes, particularly on X—enough to prompt Shaw to speak out.

"Lots of bad information out there—let's clear it up," Shaw wrote in his message. "Recent workforce changes were made to restructure the Xbox business because it is not healthy. They were not made to replace employees with foreign workers.

"The H-1B figures being referenced are Microsoft-wide visa renewals and new hire applications. They are not specific to Xbox and represent a small percentage of Microsoft's overall workforce. And the majority of roles impacted were not American roles."

Shaw also made a point of saying that "Xbox is the largest employer of American workers in the gaming industry and the largest American gaming company," and that its CEO is "American born, raised, and educated."

Earlier this week, the US Federal Reserve appointed Sharma to a new Productivity and Jobs task force, where she will help "assess the economic impact of new general-purpose technologies, including artificial intelligence, to inform the Federal Reserve's policy judgments."

Xbox's 'reset' layoffs have hit Bethesda hard, with long-term institutional talent shown the door—Zenimax Online Studios, which is part of the same studio family as Bethesda and works on the Elder Scrolls Online, was also particularly dismantled by Xbox, with over 60% of its staff laid off in the past year.

Understandably, Bethesda developers are irate. Partially because in some studios HR forced them to take down tributes to their laid off colleagues, but also because these layoffs seem to—as the Bethesda Game Studios Union (OneBGS) put it earlier this week—be part of a "stressful annual routine" for Microsoft.

And with 1,600 layoffs yet to come, a sword is left dangling over the rest of Xbox's studios, wondering who's to come next—prompting OneBGS to action. In a statement (shared here by Kotaku), the union said: "The company wants us to accept this as a done deal and quietly disappear. We won’t let that happen. Our next steps are to mobilize. We need every single member visible and unified.

"To that end, we are announcing our Save Our Devs March across all studios on Wednesday July 15th."

The objective, it seems, is to make sure that Microsoft understands it can't just keep doing this without adverse impacts on the developers left, who have the technical power to leave Xbox without one of their flagship studios:

"We need to show management right now that we mean business, so they will properly take care of our fellow co-workers today and think twice before ever attempting something like this again. Stay strong, look out for one another, and we look forward to seeing us all marching together on the 15th."

The scale and damage of these layoffs is yet to be properly tallied, but we know at this point that they include a near-hollowing out of id Software, the aforementioned ransacking of Zenimax Online Studios, and multiple hits to accessibility leadership.

It's a waste of talent and legacy, by all accounts, but not one that's unprecedented, mind. In addition to similar layoffs and project cancellations that occurred last year, Xbox has closed studios that've landed major hits before, including Hi-Fi Rush and Prey.

In 1984, an upstart retail company called Costco had just opened its first handful of voluminous warehouse stores on the west coast of the United States when it decided to try an experiment. It installed a hot dog cart in front of its San Diego store and started selling Hebrew Nationals with a drink for $1.50. People, it turned out, liked the hot dogs. The cart became Cafe 150, named for the combo price.

The company sold 245 million of them last year. When the CEO of the company in the 2010s complained to founder Jim Sinegal "we can't sell this hot dog for a buck fifty. We are losing our rear ends," Sinegal, likely then in his 70s, famously shot back: "If you raise the effing hot dog, I will kill you. Figure it out." A Costco hot dog and a 20 oz soda still costs $1.50.

In 1992, just a year-and-a-half after releasing a cutesy 2D platformer called Commander Keen, a tiny squad of game developers barely out of their teens started a studio called id Software and pioneered the first-person shooter. Then they followed it with Doom, maybe the most important computer game of all time. It was installed on more PCs than Windows. That tiny squad hired more people and then made Quake, maybe the most important 3D computer game of all time.

Decades later, a new generation of people at id dedicated to that legacy defied expectations to make another shooter so good it could proudly stand beside the ones that defined videogames. Then they made an even better one.

On Monday, Microsoft, which owns Xbox, which owns Bethesda, which owns id, laid off 136 developers from the Texas studio, which 12-year art veteran Derek Best described as "nuking a team into the dirt." Neither id Software or Doom were mentioned in CEO Asha Sharma's "Resetting Xbox" announcement. But the studio's new game, released one day after much of the talent behind it were laid off, currently occupies the top banner on Xbox.com.

What does it say about a company when it doesn't understand—or at any real level seem to care about—something it has become the steward of?

Doom, as a series of videogames, has generated hundreds of millions of dollars. But Doom is not just the money it's generated. It's the literally countless mods, maps, and entire games built on its bones; incredible ones are still coming out right now. Doom is the countless people making games today who cut their teeth mapping or had their neural pathways permanently altered the first time they picked up the Super Shotgun. The original game's labyrinthine levels and pulsing music and gory kills were revelatory enough, yet it's literally impossible to overstate its impact on the history of videogames from that moment forward. John Carmack programmed in the network code that enabled multiplayer in one month, in November 1993, and the game came out 10 days later. John Romero called the multiplayer deathmatch, and we're still calling it that today.

id Tech, the studio's ever-evolving engine, is not just a modern marvel that runs like a greased-up bat hurtling out of hell at a time when its competition is leaning on AI upscalers to crack 30 frames per second. It is the origin of yet more careers, thanks to its history of open source releases; one of the best indie games of 2025 uses it. It is a creation that any executive with any amount of vision would see as both a point of pride and an invaluable asset. You bought your way to the inner chamber, the very beating heart, of videogame software. Is that not a thing to revere?

Ahhh, but how much money does id Tech make? How much is it really worth? Xbox, its leadership says, is "not healthy," and as a result hard choices have to be made. That's just sensible business, not a short-sighted attempt to maximize shareholder value this quarter by kneecapping an incredible asset.

How else could this have gone? Last year Costco took home $275 billion in revenue (just $6 billion shy of Microsoft), and its former CEO—the one whose life was threatened over the sanctity of the hot dog—bluntly said "we have never been a company that puts the shareholders on top." A few months ago his successor housed a hot dog in a viral Instagram video before declaring: "The hot dog price will not change as long as I'm around."

He also said, through a mouthful of meat, that it's a good hot dog. And it is a good hot dog! But that's not why people love it.

People love the Costco hot dog because it's a symbol for the whole operation: that you're paying the membership dues because the deals are worth it. That they're going to give you a good value for every goddamn cent you give them. It stopped mattering years ago if the hot dogs themselves made money or not.

Costco's founder Jim Sinegal, who declared the buck fifty frank more valuable than a human life? The hot dog cart wasn't even his thing back in 1984. The idea started at a competing warehouse chain, Price Club, which merged with Costco in the '90s. But Sinegal knew what he had and expanded Cafe 150 into the food court, now one of Costco's biggest draws. That's how you treat a legacy.

The people at id Software—or the people who were at id Software as of four days ago—knew how to treat a legacy. They got it so deeply that it was evident from the very first moments of Doom 2016, as PC Gamer's James Davenport wrote in the very first paragraph of his review 10 years ago:

This thing here? It's important.

How does the company that's for decades been synonymous with the PC—much as we now wish it weren't—end up with its hands on the game studio that's synonymous with the PC, and not see it as a priceless asset?

"Xbox has many of the most beloved franchises in entertainment history," Xbox CEO Asha Sharma wrote on Monday. id wasn't mentioned. What does it say about the people in charge that they paid to get their hands on that kind of legacy, and then gave it less respect than a $1.50 hot dog?

The full scale of Xbox's rash of layoffs is still to be properly tallied up—partially because CEO Asha Sharma is yet to announce a further 1,600 axed roles. One particularly harsh casualty is id Software, which has taken around 136 job losses on the chin. A move that one employee described this week as reducing it to the size of a "support studio".

We're just now learning about the projects that the developer, which had just released a large DLC for Doom: The Dark Ages, was cooking—courtesy of Gamesbeat. The report states that id Software was looking to pitch a Perfect Dark reboot:

"The team was also considering doing a game based on Perfect Dark, the franchise that hasn’t had a new addition since Perfect Dark Zero in 2005 on the Xbox 360 game console … Concept art was in the works."

And, listen—it's not confirmed this pitch hasn't been picked up, or even that it's been impacted the layoffs. But I think we can all take a deeply educated guess that it's unlikely id Software is going to have the resources to make it. It's a studio whose majority of staff has been shown the door, forced off its homegrown game engine and forced to work in Unreal. Chances of it happening are microscopically slim.

Which wouldn't be the first time Microsoft has killed a Perfect Dark reboot in the past five years. Back in 2025, a staggering 9,000 layoffs saw developer The Initiative closed, and their version of the game—which had an impressive gameplay demo in 2024—tossed into Microsoft's growing landfill of shuttered projects.

Another project from the hollowed-out studio that likely won't see the light of day is a John Wick-inspired game dubbed "Fury", says the Gamesbeat report:

"It had elements of sci-fi, noir, and Louisiana and Chicago gangsters. It had a modern, cyberpunk-like feel. It had a concept called Gun Fu, which combined gunplay with martial arts. The game was supposed to feel a lot like a John Wick movie, but it was not formally greenlit for production."

Sounds awesome, and I figure if anyone could've pulled it off, it would've been id Software, progenitors of Doom—shooter experts in their own right. Will it ever see the light of day? Well, Microsoft would have to restore an estimated 3/4ths of its staff, first. I legitimately can't think of a game that a studio who has lost that much talent could even make. When your co-founder's mourning their own former studio, you're probably in trouble.

Back when Microsoft acquired Bethesda, our first thought was, 'I wonder if this will be bad,' but our second thought was, 'Ooh, maybe now Obsidian will make Fallout: New Vegas 2.' And when the Fallout TV show turned out to be a hit, we scratched our heads over the continued absence of a new Fallout game.

Now it looks like a new Obsidian-made Fallout RPG may actually happen. Word on the street is that Microsoft has put Obsidian's Josh Sawyer—who directed Fallout: New Vegas—at the helm of a new Fallout game as part of the "Xbox reset" shakeup, which will see 3,200 people lose their jobs.

The situation is "still in flux," according to the Bloomberg report that broke the news, and could change. But supposing that Obsidian and Sawyer do dive into this project, are you excited? There's a poll below, and the comments are open.

I'm feeling ambivalent. I like Obsidian and Sawyer, and a new Fallout game seems like a perfectly good pursuit for the developer and director, and a good thing for fans of the series who've been asking for just this for years.

But the news comes alongside thousands of layoffs across Xbox, including a substantial number at Obsidian itself, which has reportedly cancelled an Avowed sequel and other projects to make way for Fallout. It's not exactly an auspicious way to kick off a new project, and it's hard to sustain feelings I'd describe as positive after a bunch of people were just put out of work.

A Bloomberg report says Obsidian Entertainment, which was recently hit hard by mass layoffs at Xbox, has cancelled projects including a sequel to Avowed and will instead begin working on a new Fallout game.

The plans are "in flux" and could change, according to the report.

A California WARN report shared by GameFile says 52 employees at Obsidian were let go in the layoffs, which Bloomberg says represents roughly a quarter of the studio's workforce. The sequel to Avowed, the outstanding 2025 first-person RPG set in the studio's Pillars of Eternity universe, is one of multiple unannounced games in development that have been cancelled amidst the bloodletting.

Instead of that, a new Fallout game is reportedly being headed up by Obsidian design director Josh Sawyer. Sawyer has an enviable record of RPG credits to his name, most notably in this moment as the lead designer and director of Fallout: New Vegas.

Still, I'll be the first to say it, in this story at least: This sucks. I'm as down for a new Fallout as much as the next guy, but I could also really go for more Pillars, or whatever non-Fallout RPG Sawyer was reportedly directing before his attention was diverted to this.

I also can't help wondering how the circumstances will impact what ultimately comes out of this. Sawyer has previously said he'd head up a new Fallout game if Microsoft asked, if he could do it on his own terms, but I doubt his terms would ever have included seeing a quarter of the studio put out of work, or that the mood among those who remain is going to contribute positively to the project.

I've reached out to Obsidian for comment on the report and will update if I receive a reply. In the meantime, if you want to see what Sawyer and Obsidian can do when they don't have shareholder-obsessed overlords breathing down their necks, I would urge you to check out Pentiment, an astonishingly good slow-burn journey through 16th century Bavaria. It's currently on sale for $10/£7.49/€10—that's half-price—in the Steam Summer Sale. (Also, a bit of advice: Don't spoil it for yourself.)

If you've played a new Elder Scrolls game anytime since 2002, you've seen Christiane Meister's work: The senior character artist spent 27 years at Bethesda, contributing to games from Morrowind to Skyrim. As of this week's round of Xbox layoffs, however, her tenure is over.

The news came to my attention via a post by Lady Nerevar on Bluesky, though I double-checked Meister's LinkedIn and, sure enough, she is currently looking for work: "I was in charge of design, creation, and management of character art assets throughout all of the Elder Scrolls projects, starting with Morrowind to our latest title, Skyrim.

"This included drawing concepts and seeing the art piece through to the final stage of getting the object in the game as well as handing off concepts to other artists in the character group. I also oversaw outsourced assets from design to final in-game models."

As for her role in Skyrim, Bethesda still (bitterly) has a 'meet the artist' blog from 2022, wherein Meister talks a little bit about how she gave the khajiit and argonians a facelift between Oblivion and Skyrim:

"The beast races have always been a challenge, technically. In Oblivion, we went the route of everyone having the same face and using FaceGen to morph that face into the beast races. That was a… look. In Skyrim, I just [made] the faces how I wanted and then provided them with their own facial features to change. This looked much better! The only thing that it required was that we make separate helmets to fit their heads."

To me, it speaks to the depths of Xbox's cuts that such an incredibly crucial part of The Elder Scroll's visual identity has been let go. As some have pointed out, Asha Sharma, the current CEO of Xbox (who bravely claimed she'd steer the company towards an improbable 1 billion daily players), would have been either nine or 10 years old when Meister started working at Bethesda for the first time.

If you were to be a ruthless capitalist about it, you could argue that long tenures in game development lead to higher salaries—which'll often be the first in the crosshairs when layoffs inevitably come calling. The 'if' there is important, though, as I cannot think of a single situation in which booting someone with this much experience and expertise is the right move.

It's no wonder the industry writ large is spooked. There's no real world in which any of these layoffs and studio closures are a sign of good health—especially given the industry isn't exactly poor, right now. Global games revenue surpassed $200 billion in 2025; the money is there, it just seems to belong to the shareholders, and not the people who've been making games for nearly three decades.

Yesterday's layoffs at Xbox took, and will continue to take, a terrible toll. Some trumpeted the fact that no studios were closed, although the practical impact of spinning them out to independence or new ownership remains to be seen, but that has no bearing on the blow to morale caused by such deep cuts to long-standing dev teams.

One former Elder Scrolls Online developer put words to those feelings in a short, poignant thread on X, lamenting the state of the game and developer ZeniMax Online Studios, which was reportedly purged of half its employees in the layoffs.

"I’m just so angry today," wrote Andrew Young, a content designer on Elder Scrolls Online who worked at ZeniMax Online Studios from 2012-2024. "People will never know the blood, sweat, and tears that went into making ESO or how we basically funded other failing projects while never getting enough resources to really keep up with our release cadence. The team deserved much better."

The Elder Scrolls Online has had a tough go of it over the years. Its launch in 2014 did not make a great impression, and while the shift to Tamriel Unlimited a year later turned things around, it always felt to me a bit like an afterthought MMO: The second cousin to World of Warcraft and Final Fantasy 14 whose face you recognize in photos, but whose name you can't quite put your finger on.

But things seemed to take a darker turn in 2025. Just a year after a GDC talk extolling the actually-quite-remarkable success of TESO, game director Matt Firor—also the president of ZeniMax Online Studios—suddenly left the studio, a move he later said was the direct result of Microsoft's 2025 bloodbath layoffs that also saw the cancellation of a new ZeniMax Online MMO known as Project Blackbird.

That Microsoft saw fit to cut even deeper into the studio just a year after that has some concerned about its future. Following the layoff announcement, TESO community manager Jessica Folsom reaffirmed the dev team's commitment to the game but added that previously announced roadmaps for the new seasonal structure "will be shifting." There's no indication of anything more serious in the offing but I can't help thinking of Amazon's New World, a moderately successful MMO that was nonetheless canned when Amazon decided that its own "go big" strategy for gaming wasn't working.

"I've been gone for a while, but talking to people today and realizing there's really no one left and no changing it now makes my heart ache," Young concluded. "For the people, our game, who we were as a team and a studio. This is a serious loss, and I don’t think people know how much."

US senator Bernie Sanders is famous as not-exactly-a-friend of powerful corporations: He's previously called for OpenAI to be broken up, for instance, and earlier this year announced a bill that would pause the construction of data centers in the US, to give lawmakers a chance to catch up with, and regulate, AI companies.

But AI isn't Sanders' only PC-centric bugaboo: He's also pretty pissed off about the Xbox situation.

"Last year, Microsoft made $101 billion in profits, got a $12.5 billion tax break from Trump and paid its CEO $96 million," Sanders blasted out on X, not long after the announcement of sweeping layoffs at Xbox.

"This year, it’s raising the price of an Xbox by $150 and eliminating 3,200 jobs. Please don’t tell me corporate tax breaks create jobs. It never trickles down."

The concern is clearly more about the deeply unfair and unhealthy oligarchy we're living in, and not how much Sanders has to pay for the next Xbox, but I find it interesting that the relatively mundane dealings of a game company are enough to attract the attention of such a high-profile politician.

Of course, this isn't ol' Bernardo's first bit of Xbox-related criticism: In 2022, he joined with fellow senators Elizabeth Warren, Cory Booker, and Sheldon Whitehouse in calling out Bobby Kotick's golden parachute following Activision Blizzard's acquisition by Microsoft.

That, sadly, might lead to a certain amount of cynicism about what Sanders and other lawmakers can actually do here, aside from posting about it. The US Federal Trade Commission actively opposed Activision Blizzard's buyout, but its efforts to halt the deal, or even just pause it while legal challenges worked their way through the system, were repeatedly thwarted. Former FTC chair Lina Khan, who headed up the agency during the acquisition, pointed out in 2025 that Microsoft's actions since the merger are pretty much exactly what she tried to warn everyone about.

Xbox CEO Asha Sharma has made a number of big changes since taking over from former chief Phil Spencer. Some of them—dialling back Game Pass, leaning into exclusives—collectively represent a pretty clear repudiation of Xbox's choices under Spencer. In a new interview with Fortune (via Game Developer), Sharma said that Xbox spread itself too thin under its previous strategy.

"In order to grow, we made a bunch of bets ... and as we did that, we inherently didn’t focus on the core business," Sharma said. "The number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin."

The Fortune interview was published on the same day that Sharma announced 3,200 layoffs at Xbox, and the spinoff of four of its studios.

Sharma also returned to one of her key points in that layoff announcement: That the Xbox business is not "healthy."

"A healthy Xbox could weather the shock of the hardware crisis," Sharma said in the interview. "With an unhealthy Xbox, it becomes really challenging, and it accelerates a lot of the changes we need to make."

The reference to "health" presumably means that, with better profit margins, Xbox would be able to better absorb the hit of the rampocalypse (that Microsoft, ironically, is helping make happen) because it would have more flexibility when responding to price hikes: Profits might go down in order to keep retail prices palatable, but there's more room for them to shrink without actually causing losses.

Regardless of the "health" of the Xbox, component prices are astronomically high and likely to get worse, and that impacts everyone. Materials costs alone for the next PlayStation console are currently estimated to exceed $900, and the cheapest Steam Machine you can buy is $1,049.

That's an enormous amount of money for a game console. True Xbox optimists might imagine that Microsoft could use those wider profit margins Sharma aspires to in order to bring prices down to a less eye-watering level, and sure, it could. I wouldn't hold my breath.

Sharma said Xbox executives are also experimenting with new business models, such as "buy now, pay later" financing program, which will nominally reduce the barrier to entry but—speaking as someone with a bit of experience in the retail electronics field—may also leave customers who don't read the fine print and sufficiently mind their money burdened with far heavier debt than they expected.

However it shakes out, Sharma said the process is going to take time, and hinted at the possibility of more unpleasantness ahead: "I think our core has to be healthy, and that will be necessary but not sufficient."

The latest mass layoff at Xbox will see roughly 3,200 people lose their jobs—1,600 today, and 1,600 more over the next fiscal year—and four game studios turned loose into the forest: Compulsion and Double Fine as independents, Ninja Theory and Undead Labs under new ownership. It's bad no matter how you look at it, a reflection of flailing leadership at Microsoft and a dreadful state of affairs for the game industry as a whole.

The bloodletting has inspired a range of reactions across the internet—and yes, there is a small subset of the gaming population celebrating what it sees as a victory of 'real gamers' over some imaginary ideology that holds too many game studios in its grasp.

For the most part, though, the responses are shocked, sorrowful, angry, and even among those who insist these cuts were necessary, filled with regret.

Griffin DeClaire, who was laid off from Bethesda Game Studios today, said the cut came as a complete surprise because he was just told he'd be getting a raise. "I really don't know what my next steps are," DeClaire wrote on LinkedIn.

Arkane founder Raphael Colantonio, who left the company in 2017 and now heads up WolfEye Studios, embraced a bit of dark humor in response to Sharma's statement:

We initially thought that Obsidian, which isn't mentioned in Sharma's announcement, had escaped the axe, but that later proved to be false: Narrative lead Kate Dollarhyde said on Bluesky that the studio "lost many excellent developers and wonderful people" in the layoffs.

Among those let go was Daniel Alpert, who joined the studio in 2005—just two years after it was founded—and most recently served as art director on The Outer Worlds games.

Alpert said he was grateful for having spent more than two decades at Obsidian but added, "We are clearly at a turning point in the games industry. These past months have been difficult for so many talented people, and unfortunately, it seems the challenges aren't over yet."

Larian's publishing head Michael Douse was as surprised as any of us to discover that through all these years, Xbox did not have a chief operating officer.

Gloomwood developer Dillon Rogers pointed out the incongruity between Sharma's stated commitment to Bethesda's biggest franchises, and gutting the studios that make them:

Mike Kern, who was laid off after nearly 14 years at ZeniMax Online Studios, noted the obvious difficulty that many in his position don't talk about publicly: The videogame industry simply cannot reabsorb all these people. Talent is going to be lost on a massive scale.

Dan Callan, a former designer who was let go amidst last week's layoffs at that company, reflected on the deep and inescapable shittiness of pre-announcing 1,600 layoffs that will happen over the next fiscal year.

This was the best part about the last year of Bungie, through multiple layoff cycles it was a daily battle between survivor’s guilt and waiting for the other shoe to dropI would reiterate people will not make a good video game under these conditions but that assumes any of these ghouls care

— @danjamin.bsky.social (@danjamin.bsky.social.bsky.social) 2026-07-06T22:08:18.292Z

Jason Schreier of Bloomberg shared the same sentiment, saying that Blizzard employees are being left hanging until further notice.

Case in point: the staff of Blizzard Entertainment were told today that they won't hear how the reorganization impacts them until "further communications"

— @jasonschreier.bsky.social (@jasonschreier.bsky.social.bsky.social) 2026-07-06T22:08:18.063Z

Others pointed out that the cuts come as Microsoft continues to pour billions of dollars into a pursuit of AI that seems to be growing increasingly desperate, including notable AI industry critic Ed Zitron, who had some harsh words for all involved:

This sounds insane until you remember that Microsoft is ALL IN on Ai. These folks believe most of us will be out of work in the next 5 years, drawing from UBI. What will we do with all that time? XBox hopes we'll spend our time & money with them. Dystopian thinking.www.pcgamer.com/gaming-indus...

— @crobertcargill.bsky.social (@crobertcargill.bsky.social.bsky.social) 2026-07-06T22:08:18.814Z

Sure Microsoft may have fired thousands of people and gutted its games division but at least it had more money to pour into Copilot, the 4th most popular AI, a product nobody wants or likes except rich executives, that is constantly losing horrendous amounts of money

— @oldpappythomas.bsky.social (@oldpappythomas.bsky.social.bsky.social) 2026-07-06T22:08:18.503Z

But AI-focused employees aren't immune: Kevin Flynn, a commerce growth and AI product manager who said he'd increased "PM AI adoption from 12% to 91% in 3 months by building a PM specific AI harness," revealed on LinkedIn that he'd been let go.

"The last four years have been brutal in the industry," Epic Games lead level designer Scott Maclean said in his own post about the layoffs. " I’ve not seen anything like this in my 25 year career. I keep expecting it to normalize, to balance out, but that seems to not be the case."

Keith D. Boney, a former user researcher at Bethesda whose entire team was impacted by today's layoffs, shared a similar thought, writing that "this recurring trend in the Games industry is one that is extremely detrimental to psychological safety, let alone fiscal stability."

There's more, of course, but the inherent absurdity of supposedly serious executives talking nonsense about entertaining "more than a billion people each day," which PC Gamer's Harvey Randall aptly described as "delusional," has a way of making it all feel a bit futile.

Layoffs like this, which have become par for the course since Microsoft swallowed up Activision Blizzard in 2024, are outrageous and heartbreaking, and there has to be a better way. But as we careen from "never looked stronger" to "our business today is not healthy" over the course of a single year—both of them resulting in layoffs—I find myself wondering if we're ever going to find it, or if we're just going to keep howling into the social media void until there's nothing left.

Original story: Curiously absent from today's mass layoff announcement at Microsoft was legendary RPG studio Obsidian Entertainment, which thus far had navigated Xbox's 2020s layoff waves unscathed. Not anymore: An indeterminate number of developers has been laid off from the company, according to social media posts from current and former employees. I have reached out to Obsidian for comment, and will update this story if I hear back.

Rebs Gaming on Twitter documented four developers who shared their own experiences on LinkedIn, and I was shocked to see artist Daniel Alpert among those laid off. Alpert has been with the company for 21 years, with credits on Neverwinter Nights 2, Fallout: New Vegas' DLC, Alpha Protocol, and most recently The Outer Worlds 2. On the opposite end of the spectrum, engineer Wenzheng Huang had only just started at the company in May.

In addition to Huang, Alpert, area designer Tyler McCombs, and communications producer Geoffrey Fogle, writer Jay Turner has shared that he was laid off from Obsidian. Turner's only credit with Obsidian was Avowed, but his industry experience stretches back to the golden age of BioWare: Turner is credited on Jade Empire, Dragon Age: Origins, Mass Effect 2, and many more games.

Pentiment artist Soojin Paek, Avowed narrative designers A.K. Fedeau and Katie Tenney, as well as Avowed area designer Bre Seale also number among those affected by today's layoffs. That brings the total count to nine at the time of writing. Both Turner and Obsidian narrative lead Kate Dollarhyde (who remains at the company) characterize the layoffs as significant in scope.

As a company of over 100 employees (285 in 2025), Obsidian is obligated by the WARN Act to provide advance notice of layoffs in excess of 50 employees. The California WARN Act Tracker does not show Obsidian as having reported its layoffs. This would have put today's count at between nine and 49 people, though Kotaku reports that the final count is 60-70 employees laid off.

Numerically a drop in the bucket compared to the 1,600 laid off across the entirety of Xbox, with 1,600 more in the next 12 months, but every one of those figures is a life that's been upturned. What's more, Obsidian is a legendary RPG studio, one with four games in our 2025 Top 100 list (Pentiment, Knights of the Old Republic 2, Deadfire, and New Vegas). In recent years, the studio has gone from strength to strength with the heartbreaking Pentiment, breakout Grounded series, as well as the criminally underrated Avowed and Outer Worlds 2.

Obsidian followed Xbox's presumed previous mandate, to release a high volume of quality games to support Game Pass, to a T, pushing a pace largely unheard of in the modern industry: Five games in five years, from 2020 to 2025. Its developers have been punished in spite of that success.

With Xbox floundering and 1,600 more layoffs expected at the gaming division in the next 12 months, I've never been less secure in Obsidian's future⁠—and let me tell you, I'm rooting for its 100-year plan. Obsidian reached its 25th anniversary despite almost going under multiple times in its history.

It would be criminal to lose the studio in the coming years because Xbox was not profitable enough, and Satya Nadella needs to fish more change out of the couch cushions to throw at AI datacenters and Copilot, the fourth most popular chatbot that lies to you.

Today's Xbox layoffs may have hit Bethesda and ZeniMax particularly hard, as reports of "significant" cuts have begun to surface and the Bethesda Game Workers Union says that "many" employees at Bethesda Game Studios have been let go.

Today's announcement of major layoffs at Xbox and the spinoff of four studios—Compulsion Games, Double Fine, Ninja Theory, and Undead Labs—also included word from CEO Asha Sharma that company is "making reductions across other units, and in some cases, shifting investment to focus on higher priority projects. These changes vary in size across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios."

Details on studio-specific cuts haven't been announced, but Bloomberg's Jason Schreier said on Bluesky that ZeniMax Media, the parent of id Software, Bethesda Softworks, ZeniMax Online Studios, and others, "will be impacted significantly by the reorganization," although he added that Bethesda will not be pared down to just Fallout and The Elder Scrolls teams, as some reports have claimed: "The publisher will also still work on Wolfenstein, Doom and Quake."

But some of the studios responsible for those games are also reportedly being hit hard: "Studios in the Bethesda organization like id Software (Doom) and ZeniMax Online Studios (Elder Scrolls Online) are not shutting down but are cutting a significant number of staff this morning, per sources," Schreier added in a subsequent post.

A separate statement from the Bethesda Game Workers Union, the "wall to wall" union that formed in 2024, also indicated that the cuts run deep.

In what is becoming a stressful annual routine, Microsoft has decided to lay off thousands, including MANY of us at Bethesda Games Studios. With over 10k developers already cut from previous rounds, those at the top have deemed that insufficient in fixing their mistakes.

— @bethesdaunion.bsky.social (@bethesdaunion.bsky.social.bsky.social) 2026-07-06T16:29:42.450Z

"In what is becoming a stressful annual routine, Microsoft has decided to lay off thousands, including MANY of us at Bethesda Games Studios," the union wrote on Bluesky. "With over 10k developers already cut from previous rounds, those at the top have deemed that insufficient in fixing their mistakes.

"Today we say goodbye to many of our friends and colleagues and to hundreds more across Xbox, including folks that have worked at Bethesda Games Studios for decades. When will this cycle of cuts in pursuit of ever-greater profits end?"

I've reached out to Bethesda and the Bethesda Game Workers Union for more information and will update if I receive a reply.

In today's announcement of a staggering 3,200 layoffs at Xbox, the fate of one fan (and PC Gamer) favorite studio was left up in the air. Arkane Lyon, the remaining half of the modern immersive sim maestros, appears to be entering negotiations for an indie exit similar to other former Xbox studios.

"In France, Arkane's management is beginning required consultation with its Works Council to review potential strategic options," Xbox CEO Asha Sharma wrote in her missive on the mass layoffs. Former Kotaku editor Stephen Totilo has more context in his newsletter, Game File.

According to Totilo, Arkane is "also slated for an exit" similar to Double Fine, Undead Labs, Compulsion Games, and Ninja Theory. "Given local laws, though, Microsoft has been unable to explore its future—ranging from sale, to management buyout to shutdown—until today," Totilo wrote. "The fate of the Blade game is contingent on the studio’s future."

On Bluesky, Totilo wrote that Arkane's negotiations with Microsoft could lead to "100+" layoffs at the studio, depending on what form its future takes. Similar to the UK, which mandates a month-long redundancy process in the event of layoffs, muscular French labor laws prevent the sort of abrupt, day-and-date layoffs we're used to seeing in the United States.

You can see the contrast most clearly with the fate of Arkane Lyon's dearly-departed, Texas-based twin. Arkane Austin was shut down by Microsoft in 2024, one of the first casualties of Xbox's ongoing disintegration.

Arkane Lyon's most recent game was 2021's Deathloop, the excellent Groundhog Day time loop immersive sim. Arkane announced an adaptation of Marvel's Blade in the summer of 2023, and we've heard little since⁠—though Blade has consistently remained one of our most-wanted games.

Previously, Arkane Lyon developed our 2016 game of the year, Dishonored 2, and Arkane Lyon level designer Romain Barrilliot was lead designer of Thief: The Black Parade, ModDB's 2023 mod of the year and a modern triumph of the immersive sim genre.

As for those affected, I've only seen a telling non-comment from Arkane level design director, author, and Through The Looking Glass forum co-founder Dana Nightingale. "All I know is I'm really excited for everyone to read and love my upcoming book," she wrote.

Arkane founder Raphael Colantonio, who left to start Weird West developer WolfEye Studios, had a cheeky response to Asha Sharma's layoff announcement post on Twitter: "Regarding Arkane… how much? I’m asking for a friend." Colantonio was likely joking, but stranger things have happened, and I think we're all waiting on a hero here.

You can imagine the golden path: Minimal layoffs and an independent Arkane, or maybe ownership by an eccentric-yet-benevolent French billionaire who loves immersive sims. But that's far from certain, and like many immsim fans, I'll be contributing spirit bomb energy in hopes of a happy outcome. All I know is that Arkane has a design pedigree stretching all the way back to Origin Systems and Looking Glass Studios in the early '90s, and it would be a tragedy to have that ended by feckless corporate spreadsheet thinking.

The time has finally come for Xbox's massive reset—in a statement on the official Xbox site today, recently-minted CEO Asha Sharma revealed the fate of several studios. I won't be focusing on them in this article (although you can read the words of my fellow PCG writer Andy Chalk first, if you'd like).

Instead I want to highlight (with the deserved scrutiny of a post announcing the threatened livelihoods of thousands and people) Sharma's closing paragraph, because it's borderline delusional.

"I want XBOX to be one of the few companies that entertains more than a billion people each day and gives everyone the opportunity to create and connect. I know we can achieve this goal. XBOX has many of the most beloved franchises in entertainment history, talented studios around the world, and we will return to growth in 2027."

A billion, need I remind you, is a thousand million—to give you a sense of scale, a million seconds is 11.5 days. A billion seconds is 31.7 years. A grain of sand is around 0.4mm in diameter. If you made a chain of them, a million grains would get you 0.2 miles, a distance you can walk in about five minutes. A billion grains would get you 248.5 miles, which'd get me, in the UK's south, halfway up to the top of Scotland.

Or, hell—let's talk about videogame subscribers as a metric. World of Warcraft, a videogame Microsoft currently owns, hit a peak of 12 million subscribers during Cataclysm. 12 million players, the absolute highest point of one of the most popular MMORPGs ever created, the literal biggest fish in the genre? That is 1.2% of a billion.

And we're just talking about subscribers, not daily players. Sharma wants a daily playerbase that is the equivalent of 83 World of Warcrafts at their highest peak, all logged in at the same time. Counter-Strike, the most popular game on Steam, had an all-time peak of 1.8 million. She wants 555 Counter-Strikes every day.

Speaking of Steam, the platform hit 41 million concurrent users last year. Sharma wants 24 Steams at their all-time record heights. 24 of them. Even if we're a bit more charitable and assume that, say, Steam hitting a peak of 41 million means 60 million players logged into it on that day. That's still 16 Steams.

It's a quite frankly delusional figure that's nonetheless a perfect encapsulation of the runaway irresponsibility of Microsoft in the past few years. Multiple promising studios shut down, huge acquisitions, rampant AI spending—all of which, you might think, would make the executive class wonder if they were maybe aiming a little too high.

But not Sharma, no no no. We must entertain a billion people each day, she bravely shouts, we must be 24 Steams, and we can be 24 Steams.

And, naturally, we must do so by demanding that fewer people do more work. Sharma says she wants all of this with the same breath in which she announces Xbox will have 3,200 fewer people working for it by 2027.

The quite frankly insulting final paragraph of Sharma's corporate diatribe is an example of the exact plague that's boiling the videogame industry alive. There is no room for humility or self-reflection. Sharma must promise the mathematically impossible to save face, or, I can only assume, violate some arcane dogma and burst into flames. Microsoft's year of shame is getting a sequel.

Today, Xbox announced what it calls "the most significant restructure in Xbox history": Part of a larger downsizing at Microsoft that's putting 4,800 employees out of work, the reorganization will eliminate 1,600 Xbox roles today, with the division aiming to reduce its headcount by 3,200 throughout the 2027 financial year.

Alongside the layoffs, four game development studios are leaving Microsoft ownership for new management, including South of Midnight and We Happy Few developer Compulsion Games. Previously reported as facing imminent closure, the award-winning Montreal-based developer is instead returning to independent studio status and maintaining ownership of its IP and games catalog.

An important update from Compulsion Games.

— @compulsiongames.bsky.social (@compulsiongames.bsky.social.bsky.social) 2026-07-06T15:50:11.169Z

"Today, we're sharing that Compulsion Games will return to independent management following our time as part of Xbox. As part of this transition, we will retain the rights to Contrast, We Happy Few, and our award-winning South of Midnight," Compulsion Games said in a statement on Bluesky. "We're grateful for the years we spent with Xbox, for the support they provided our team, and for the opportunity to bring these games to players around the world."

While the studio says it's "excited to continue building the distinctive games that define Compulsion," its first steps with its newly-regained independence will be focused on its staff.

"Our immediate priority is to support our team throughout this transition period," Compulsion said.

Last month, reports suggested that Xbox's looming reorganization has placed Compulsion at imminent risk of closure—a suggestion made more credible by Compulsion employees who had posted on LinkedIn and other platforms indicating they were seeking work. The status of those employees, and whether Compulsion can be expected to make further cuts to account for the financial pressures of transitioning to independent management, is currently unclear.

"We are confident in the future of Compulsion Games and look forward to this next chapter where one thing will remain constant: We will create unique games that tell important stories, all with the goal of touching the hearts and minds of our players."

The axe has fallen on Xbox, which announced another major round of layoffs that will see approximately 3,200 people put out of work, with 1,600 losing their jobs today and another 1,600 to follow over the course of the company's fiscal year. Four studios—Compulsion Games, Double Fine, Ninja Theory, and Undead Labs—will also "leave Xbox to new management," as CEO Asha Sharma put it.

None of those studios will close as a result of today's cuts, which is the only upside to the whole thing: Compulsion and Double Fine will go independent again, "with their IP, catalog, and runway for their next games," Sharma said, while Ninja Theory and Undead Labs are being sold to unnamed new owners.

The situation may be grimmer for Arkane, where "management is beginning required consultation with its Works Council to review potential strategic options." Further details aren't provided but in France, where Arkane is based, and other EU nations, employee consultations are a mandatory part of the layoff process. There's no mention of the Blade game Arkane is currently working on.

Xbox is also "making reductions across other units," including Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios, although Sharma said no ongoing projects will be cancelled. Minecraft studio Mojang and the mobile studio King will also now report directly to Sharma.

Sharma declared that "our business today is not healthy" as a prelude to the cuts, a statement made almost exactly one year after her predecessor, Phil Spencer, declared that "our platform, hardware, and game roadmap have never looked stronger" as he imposed mass layoffs of his own in 2025. Sharma also repudiated Spencer's all-in bet on Game Pass and multi-platform releases, saying that while they "created meaningful value, they did not grow at the pace we expected."

I like handheld gaming PCs. Note that I've carefully used the word "like," rather than love. In all honesty, I wish they were faster. Or more portable. Concessions need to be made if you want to play demanding games on the go, it's true. But, in recent months, it's the price that's really put the tin lid on the whole handheld gaming affair for me.

The Lenovo Legion Go S SteamOS, a handheld we fell in love with last year at its $830 MSRP, is now listed for $1,332. Or how about the MSI Claw 8 AI+, a mega handheld I personally gave a 90% score to (while admitting it was rather expensive) at $900? Now you'll be lucky to find one for under $1,200. Its recently-announced, Panther Lake-powered successor? That'll rack you up $1,799 at pre-order prices.

I know, I know. It's another article from me complaining about pricing, and I realise I probably sound like a stuck record. But I cannot think of a PC gaming hardware category more screwed by the memory crisis than the handheld market right now. I update our handheld gaming PC deals every week, and recently I had to make an admission:

The Asus ROG Xbox Ally X, a machine we rightly criticised for having a "super-high price tag" on its release just eight months ago, is now what I'd call the best value proposition on the market. For one thousand smackeroonies. A cool grand. Serious cash.

That's the price of a budget, yet soul-affirming, weeklong beachside holiday for two. And yet, if I were to recommend you buy any gaming handheld under today's ridiculous pricing conditions, it'd be this one.

It's properly fast, for a start. With an AMD Ryzen Z2 Extreme APU furnished with RDNA 3.5 graphics tech and 24 GB of LPDDR5x-8000, it's got a specs sheet that allows it to monster pretty much every other handheld we've ever tested.

You get a 1 TB SSD as well, which should allow room for plenty of modern games. There's also the ROG Xbox Ally (non-X) to consider at $600, but the Ryzen Z2 A chip at its core feels a little underpowered—although it's still worth some thought at that price.

Compare and contrast either with the Steam Deck OLED, which now runs you $949 for the 1 TB model. Sure, it's got a nicer screen. But the now-aging internals simply don't make any sense for this sort of money. A bit like the Steam Machine, now I come to think of it—although I digress.

Plus, the ROG Xbox Ally Xs Windows Xbox full screen experience (what a horrible mash-up of terms) is pretty darn good. It's no SteamOS, but it's nevertheless a pretty seamless way of interacting with the system via the medium of thumbsticks. And Steam's Big Picture Mode is still an option for sorting through your games library, of course.

It's quiet, comfortable, and—again I can't believe I'm saying this—reasonably priced given what you receive compared to the competition. Somehow, the Xbox handheld has managed to place itself within the market at the right price, at almost the right time.

Which makes me wonder how much longer it'll be before that MSRP jumps. Given the state of *gestures wildly* everything else in the consumer electronics industry right now, I'd imagine that within the next few months, this column will become defunct.

I'm kind of astonished that the ROG Xbox Ally X is still sitting at its $1,000 MSRP as we speak, and something deep in my bones tells me that won't be the case for much longer.

This isn't a call to action, I should stress. Honestly, if I was curious about buying a gaming handheld right now and already owned a PC, I would probably save my money instead.

But if you're dead set on buying a portable gaming machine to shove in your shoulder bag for your next flight, this is the one that makes the most sense in the current market.

And that's a wild state of affairs. With reports indicating that the memory crisis, and the associated tech price increases will continue (and likely worsen) throughout 2027, and possibly 2028 as well, I genuinely can't fathom what sort of price/performance metrics I'll be using to write handheld reviews over the next couple of years.

How do I score what are essentially hobbyist devices, pleasurable adult frivolities, when they all command such eye-popping amounts of cash? How do I square any real concept of "value" with devices that I know damn well would cost much, much less, if it wasn't for AI holding us all over a barrel?

Gaming is already an expensive hobby. Even more so when you want handheld convenience combined with high performance. But pricing seems to be rising at such a rapid rate, I wonder whether handhelds will survive as anything other than boutique devices for the very well-heeled.

They're very difficult to wholeheartedly recommend in 2026, I'll tell you that much for free.

Six years ago, PC Gamer's Evan Lahti wrote a headline that captured the feeling of the moment, when PlayStation announced it would be bringing more of its exclusive games to Steam: Well, I guess we won the console war.

The walls between platforms had crumbled. Everything but Nintendo was or would soon be playable on PC. Steam, not Xbox Live or PSN, was the kingmaker for new indie games, and the best place for devs to keep steadily selling their back catalog.

Things feel a lot different half a decade later, as AI wreaks havoc with hardware prices, Xbox panics about all the money it's spent on acquisitions, and Sony retreats from the PC—and physical media—back to its exclusive digital garden. And yet it still seems like the PC won the console war.

Because what are Xbox and PlayStation at this point other than PCs, but worse?

Sony's dual announcements—that it will cease producing physical discs in 2028 and also shut down the older PlayStation 3 and Vita online stores next year—seem to have been published simultaneously with a ripping-the-band-aid-off PR mentality. People are going to be mad, so get all the bad news out at once and hope you didn't remove too much flesh with the band-aid in the process. The takeaway of those two announcements landing simultaneously, though, is highlighting that you can only buy games on the PlayStation how and where Sony says you can. The executives have already literally said they want to wring more money out of every PlayStation owner; clearly cutting the Walmarts and GameStops of the world out of the equation is one way for them to do that.

Obviously the games industry has been trending towards digital-only releases for years; to the spreadsheet-brained it was just a matter of time until the cost of manufacturing and shipping of physical discs no longer made sense. The PC even led the charge on that front, meaning consoles clinging to the option of buying physical releases was one of their last true differentiators. Microsoft gave up on Xbox exclusivity, bringing all of its games to its own Windows Store and then to Steam. But those were just digital releases. If you really wanted to own a disc with Halo Infinite printed on it, you still needed an Xbox.

In 2020, Sony killed Microsoft's entry level Xbox Series S, an underpowered $300 machine, by selling its discless but otherwise fully capable PS5 at just $400. In the midst of the crypto mining craze making graphics cards unobtainable, the PS5 was a great console for the price. Today it costs $250 more, and Sony has also started raising prices for its PlayStation Plus subscription service needed to play games online.

Even with the painful prices of storage and memory hitting PC gaming hard, the consoles seem to be pricing themselves into irrelevancy. In the six years since the PS5 launched, Sony has produced so few of its once-system-selling blockbuster exclusives that it's hard to imagine spending close to $1,000 to play one new Naughty Dog game, one new Insomniac game, and a new God of War. The prestige just isn't prestiging as hard as it was on the PS4. Add to that the uncomfortable reminder that Sony can revoke the licenses to stuff you've bought on its platform, and that it will inevitably stop selling old games whenever it becomes too much work to bother maintaining an aging digital store, all while you pay it $80 a year just to play games on the internet, and you've gotta ask what the point of that device really is.

I guess it makes a nice sound when you turn it on.

Okay, less sarcastically—the system is designed to work nicely on a TV. The user interface is relatively easy to navigate. It's got apps. Those old chestnuts have been used to defend consoles against the scawwy computer for as long as I can remember. It was true in, like, 2004. But console interfaces get more annoying and ad-infested every year, while their games now offer multiple performance options to pick from in a shallow approximation of the PC experience. Valve's SteamOS, meanwhile, has made tremendous strides towards a controller-friendly interface without sacrificing the flexibility that has always been the PC's core identity.

Install SteamOS on a giant tower PC or a tiny box built from the guts of a PS5! Use whatever controller you want! Buy your games on Steam (the prices are always better) or get them DRM-free on GOG, or grab them from a legally questionable "abandonware" website if they're no longer on sale. Still have a soft spot for physical discs (or disks) and want to do everything on the up-and-up? A USB drive will cost you all of 20 bucks, and decades of PC games remain available on Ebay. There are probably even cool mods or fan projects that make them play nice with modern hardware.

The PC may have led the charge on digital games years ago, but the thing is: anyone can still make, sell, or play physical PC games if they want to. The only person who can take away your PC disc drive is you.

To sum it all up:

• The last PlayStation and Xbox that were meaningfully different from PCs under the hood came out in 2005 and 2006.
• Price was once their biggest asset—AI has killed that.
• Simplicity was their second biggest, but while they've been making that experience worse for years, Valve (and the open source developers behind great initiatives like Bazzite) have been making the PC's better.
• Genuinely compelling exclusives other than Nintendo's are anomalies, and it's hard to be heartbroken over missing one or two given the number of interesting games hitting Steam every single week.

Sony now sells an overpriced entry ticket to a walled garden that kinda looks worse than the forest just outside it, while Xbox is actively lighting its own grounds on fire. Simpler and cheaper used to be worth the price of admission for a lot of people. But the way things are going, by the time the PS6 arrives anyone who buys it will just be paying more for worse.

Microsoft has been extremely busy lately, taking a well-earned break from polluting the world with AI to eviscerate the videogame industry. The reports of potential layoffs and closures—coupled with the short-sighted strategies of other publishers, including main rival Sony—are devastating. And the bad news just keeps coming.

According to The Verge, Arkane's Blade is now on the chopping block as well. This wasn't entirely unexpected, granted. While Arkane's games tend to be critically acclaimed, immersive sims continue to be a hard sell. Dishonored 2 and Prey didn't meet Bethesda's sales expectations, and Redfall was just a complete mess.

Now, a vampire-hunting dhampir stalking the streets of Paris sounds like a pretty good setup for an Arkane romp, but while Blade is highly anticipated, we've heard so little about it since the reveal that there have been concerns that development isn't going smoothly.

Todd Howard recently attempted to put these concerns to rest only last week, saying Arkane was "doing a really, really good job" on Blade. This vote of confidence, coupled with Arkane art director Jean-Luc Monnet saying the game wasn't being cancelled and that fans need to let Arkane cook, seemed like good news.

But Todd Howard ain't in charge now—he might have confidence in Arkane, but that doesn't mean Microsoft and Xbox's leadership feel the same way.

The Verge reports that Arkane is one of at least five studios being considered for closure as part of a cost-cutting strategy. Blade was meant to arrive this year, the report says, but the unannounced release date has since moved to late 2027. Coupled with it running over budget, this has given Xbox the fear.

Arkane's death would be tragic—the immersive sim genre is not a large one, and Arkane's one of the few major studios still making this type of game. Arkane's also been around for a whopping 26 years. It's got an important legacy.

However! There might be light at the end of the tunnel. Microsoft is apparently considering selling Arkane off, a move that would salvage the studio—and hopefully the talent. Though the latter is far from guaranteed. Still, Arkane escaping Xbox might actually be a good thing. Bethesda really didn't get Arkane, and Xbox hasn't shown much more understanding. This is a studio that likes to take risks, working for a publisher that's terrified of them.

Certainly, things aren't going to improve at Xbox. AI-loving CEO Asha Sharma's big Xbox reset will gut Microsoft's gaming division, with at least 1,000 jobs rumoured to be at risk, and that's not including the layoffs due the reportedly impending studio closures.

Basically: Xbox is digging its grave, but there's still hope for Arkane.

Microsoft's likely got another wave of layoffs and studio closures coming, it's my displeasure to say—with multiple studios on the chopping block. It's another pip in a pattern of scattershot project cancellations and studio closures, in the same vein as the company shutting down Project Blackbird despite Phil Spencer loving it, or closing Tango Gameworks despite Hi-Fi Rush being touted as a success.

Basically, for Microsoft (and the wider industry at large) there's no real guarantee that good work will keep you in a job. And union members at the Communications Workers of America (CWA) spoke out in a press call (shared here by GamesBeat).

Morgan Goin, a senior encounter designer at ZeniMax Online—who has been through the wringer already, being caught in the shock closure of Arkane Austin and losing out on a month's employment before finding her feet—says that "there's a clear gap between what we need, how Microsoft talks about us publicly, and how we're being treated across all of their studios."

As a union rep, Goin feels like Microsoft's only talking the talk: "I have been entrusted with the responsibility to advocate for my coworkers. I cannot do my job when Microsoft refuses to do theirs. This isn't just affecting one studio or one department, it's affecting all of us. We refuse to be left in the dark as the company decides to restructure in a way that seriously affects us all.

"We're being treated as expendable, valued one week and cut the next. Why would a game developer bother to put forward their best work under these conditions? Hard work and great games do not save you from layoffs under Microsoft."

Allison Veneto, a senior editor for franchise development at Blizzard, a studio which also endured a game cancellation and a rash of layoffs after being acquired by Microsoft, comments: "Every time these layoffs happen, we lose incredible talent in years of institutional knowledge … We want layoffs to be treated not as a quick fix to a quarterly balance sheet, but only as an absolute last resort."

Senior environment artist at Blizzard Mahreen Fatima points out how little having a full-time job means under Microsoft's layoff-happy business culture: "In this climate of layoffs, it feels like there's really no difference between being contract and being full-time, we're all just as equally dispensable in the eyes of the company.

"Leadership points to revenue margins to justify fighting us. And then this week they raised console prices on players for the third time since 2025. They are not short on money. Look at the billions that they're using to invest in AI. They're just choosing not to protect us."

It's a feeling I generally agree with even as an outsider, and one I won't stop being exhausted by. The videogame industry has been experiencing massive growth, and CEOs like Microsoft's own Satya Nadella take home hundreds of millions of dollars. In fact, Nadella's pay jumped 22% between 2024 and 2025.

Last year, Microsoft made $27.2 billion in three months. It also planned to invest $80 billion in AI infrastructure. For the record, $80 billion is enough to keep a studio of 200 median-salary game designers ($113,000 annually) paid for 3,539 years, for a piece of technology that Nadella has openly said we need to do something useful with. You cannot convince me there isn't the money to keep these studios afloat.

As reports that major layoffs are coming to multiple Microsoft-owned game studios continue to swirl, numerous developers at South of Midnight studio Compulsion Games have indicated that they are leaving the studio and looking for new work.

Posting "open to work" messages on LinkedIn is a very common way for game industry employees to search for new opportunities—and, sadly, it's also often a first sign of layoffs at game studios.

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That was initially thought to be the situation here as well, but according to Bloomberg's Jason Schreier it's not the case: Schreier said on Reddit that with layoffs looming, "studio leadership gave their employees permission to openly look for work because they almost certainly will be losing their jobs."

Still, it's clear that the move caught at least some Compulsion employees by surprise: Principal level designer Mike Sklavounos, for one, described it as "an unexpected turn of events." According to Eurogamer, at least a dozen Compulsion employees have indicated that they are looking for new work in some capacity, a significant number for a relatively small studio of about 90 employees.

More worryingly, the sudden spike in employees looking for work is also pretty close to confirmation that another Xbox bloodbath is in fact coming. Along with Compulsion, reports earlier this month claimed that Double Fine, Ninja Theory, and "several other studios" were at risk of closure as part of an "Xbox Reset" being shepherded by CEO Asha Sharma and CCO Matt Booty; the pair said in an open letter published earlier this month that Microsoft "over extended" itself with a rash of studio acquisitions over the past few years—in other words, yet another management failure that thousands of employees will have to pay for.

The current expectation is that the layoffs will be imposed in early July, following the end of Microsoft's fiscal year, which wraps up on June 30. Microsoft did the same thing in 2025, laying off thousands of employees and cancelling multiple videogame projects on July 2 of that year.

OD is Hideo Kojima's return to horror, and while I'd like to say it's cloaked in mystery we actually know a fair bit about it: it's co-written with Jordan Peele of Get Out fame, and stars Sophia Lillis, Hunter Schafer, and a posthumous Udo Kier. According to Kojima, early trailers may point to "a standard horror game" but it's definitely not that at all.

In fact, we've been told repeatedly that OD is like nothing else that's come before: what it actually is, is a mystery Kojima seems pretty eager to exacerbate. In a new Entertainment Weekly feature which seems designed, maybe with poor timing, to celebrate the virtues and achievements of Xbox as it enters its 25th year, Kojima is called on to comment about OD, which will be published by Xbox Game Studios.

"I wanted to do something new. I wanted to do something different," Kojima told EW. "I had this OD concept since I was working on DS1 [Death Stranding] and I was working on it just by myself. I can't reveal much detail, but it's something that no one has ever seen before. A new game system."

He goes on to say that despite being Hideo Kojima, the creator of Metal Gear Solid and Death Stranding, and perhaps the most beloved (maybe only) auteur in the biz, many weren't receptive to his pitch. "I pitched to many people, to the big companies, and also to the up-and-coming companies. All of them said the same thing," Kojima said. "They said that I'm crazy, and that they really don't understand the concept—that they will not be able to do it."

Phil Spencer, former Xbox head, was pretty keen on the concept though. Or else, he was keen to secure a crowdpleasing exclusive after Kojima's decades-long association with PlayStation. Most of the Metal Gear Solid games didn't or haven't launched on Xbox consoles, though the majority have since been reissued on that platform. Death Stranding and its sequel both launched as PlayStation exclusives: the first eventually came to Xbox, but the second is yet to make the jump.

New Xbox head Asha Sharma supports OD, calling it "deeply moving" and representative of "another kind of game". She also seems eager to conflate Xbox's support of the game with its broader vision for the medium as a whole. "We need to make sure our platform is sufficiently open so more creators and developers can come on board and be successful, because the next Kojima is yet to be known." (True, but perhaps he was among the thousands laid off by Microsoft in the last two years).

Kojima has a tiny bit more to say about OD: "I wanted to go beyond the limit of the 'scariness' that other games had reached. It's a single-player game, and I wanted to make it as scary as possible. But for those that might stop playing when it gets too scary, I have thought of a system that will allow them to keep going. I can't say much more, because it'll give too much of a hint on the system, and I could get in trouble for saying too much!"

OD has yet to get a release date.

White hardware aficionados, you'll want to prick up your ears for this pre-Amazon Prime Day deal. Recently, I decried the fact that white hardware often comes at a premium, before expounding the virtues of the RTX 5070 model of the Thermaltake LCGS NE gaming PC (which is still only $1,400 from Newegg, by the way). Now, I'd like to bend your ear for a gaming headset that matches that gaming PC's clean look.

As someone who wears makeup, a white gaming headset is not typically what I'd reach for, but I must admit the SteelSeries Arctis Nova 3X looks crisp. You may remember that I've already waxed lyrical about this wireless headset in my SteelSeries Arctis Nova 3X review and, though my colourway of choice is lilac, much of the same praise still applies to the black and white versions of the headset. That's just as well because those are the SteelSeries Arctis Nova 3X colourways that are $76 from Amazon right now.

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One more caveat before we get into the good stuff: this deep discount only applies to the version of the headset that features built-in connectivity to Xbox. You can still wirelessly connect to your PC and Nintendo Switch via both Bluetooth and the included 2.4 Ghz dongle, but Xbox gamers will already be well aware that Microsoft's console is very particular about the devices it will connect to. The SteelSeries Arctis Nova 3P is the version you want if you're also a PlayStation gamer, but the white version of that costs a little more.

Right then—appealing colorways aside, why is the SteelSeries Arctis Nova 3X worth the deal spotlight shoutout? Well, for one thing it's the 40 mm set of cans I use everyday. Though primarily a gaming headset, its stylish looks, detachable mic arm, and extremely comfortable floating headband design make this a versatile bit of kit that I frequently wear far away from my desk. If your budget simply won't stretch to one audio device for your desktop and separate headphones for everywhere else, then the SteelSeries Arctis Nova 3X has you covered with its versatility.

It's certainly got the battery for adventures away from your desk too, offering up to 40 hours of play over a Bluetooth connection. Fast charge also means you get another nine hours of up time from only 15 minutes spent charging. Now, that's all well and good but we're PC Gamer, so how do these bad boys sound in-game?

The SteelSeries GG desktop app offers both customizable, game-specific EQ profiles as well as a few presets geared more towards media and music. Academics will know it's always a good day when you can quote yourself, so if you'll indulge me, here's what I said in my review last year:

"Over a 2.4 GHz connection, in-game audio is clear, detailed, and wonderfully immersive. For instance, Hi-Fi Rush enjoys a subtle bass boost that brings the rhythm running through its heart to even more vibrant life without upstaging the details of its brash soundscape.

"DOOM: The Dark Ages is bolstered by its own game-specific EQ profile, too. Gibbing demons is all the more immersive for one thing, as you really hear the viscera splatter across environments that could've done with a deep clean long before all hell broke loose. The slayer's footfalls enjoy a real sense of heft here, too, making it an absolute joy to crash through Khalim and beyond."

Now, if you're not a fan of the soundscapes SteelSeries has cooked up, the GG software's intuitive parametric UI makes it easy enough to put together an EQ profile more to your liking. The biggest drawback to this software is that you may end up accidentally stacking EQ settings over a Bluetooth connection, or if you've got Dolby Atmos enabled, resulting in deep fried audio.

Thankfully, this is only a minor annoyance as checking the software's Engine tab and setting the EQ to a flat profile usually fixes this. Besides, most PC Gamers will prefer to use a 2.4 GHz connection over Bluetooth, and thankfully that really is where the SteelSeries Arctis Nova 3X sings.

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Xbox is under fire yet again. It's teasing layoffs as part of a "reset", reportedly closing Double Fine, Ninja Theory, and more, and it can't present a coherent plan—all just days after unveiling upcoming games at its Xbox Games Showcase.

Rightfully, Xbox has been criticised by industry figures in response, including a former PlayStation exec. Now, Moon Studios CEO and Ori creator Thomas Mahler has taken to X (spotted by VGC), damning Xbox Game Pass.

"The Game Pass strategy could've worked if people would've shown up for it," Mahler claims, suggesting that the service's offerings (particularly new, exclusive games) weren't enough to keep people paying every month.

"You need those games your studios are producing to become smash hits, cultural events that everyone wants to play—but what was the big Xbox game in recent years that was just delightfully good? That game doesn't exist.

"Almost every single first-party studio in recent years has been floundering. You'd want Bethesda to create a 'Skyrim in Space' that ought to be better than Skyrim was cause that was an old game: But we got Starfield instead…[Xbox] need to have good deals with devs so developers are actively incentivized to produce massive hits, not just slop out mediocre content like a factory."

Mahler adds that Game Pass is "a little like Communism," in that if you don't give people an incentive to pitch in and subscribe, then the whole system "comes crashing down". When Xbox raised the price of Game Pass last year, it lost "millions" of subscribers, according to Matthew Ball, games industry analyst and newly-installed Xbox chief strategy officer.

It's worth noting that while Xbox's first-party lineup has struggled arguably since the launch of the Xbox One in November 2013 (ouch), Game Pass has served up some third-party hits. In fact, three of last year's game of the year nominees—Expedition 33, Hades 2, and Hollow Knight: Silksong—were available on the service day one. Kingdom Come: Deliverance 2 joined a while later, too.

The issue is that these games are available elsewhere, so they're not solid incentives for players to sign up for an expensive subscription. Forza Horizon 6 is the first big exclusive game for Xbox in a long time, breaking the records set by its predecessor. But one (timed) exclusive isn't going to move the needle to the degree the company demands.

Microsoft has spent the past few years laying off thousands of workers from its collection of game studios, which ballooned under former Xbox CEO Phil Spencer. Now it's set to cut more jobs and close more studios as part of new CEO Asha Sharma's "Xbox reset."

That years-long Xbox cost-cutting campaign has led to more game cancellations than we know about, ending huge projects that, at least on the surface, were exciting.

Were these "hard decisions" genuinely the pragmatic ones? The 2020s certainly have been marked by some massive flops, and it's possible that some of these projects were money pits. A couple of them were especially risky propositions: big, hard-to-make online games.

But as Microsoft doubles down on console exclusives and tries to hurry along heavy-hitters like The Elder Scrolls 6, I've got to wonder if it was wise to toss so much in-progress work, some of which was highly praised internally.

It's the risky games that are the most exciting, and while Gears of War: E-Day looks impressive in ways, it's not exactly an electrifying proposition this far removed from the 2010s. Given how profitable Microsoft is as a whole—it's making billions even as it dumps money into AI—was it really pragmatic not to let some of its best cooks cook?

Here are five of the big games Microsoft recently crossed off the upcoming list.

'Odyssey,' Blizzard's survival game | Cancelled in 2024

We first heard that Blizzard was making a survival game in 2022. Codenamed Odyssey, it had been in development for almost five years at that point, and Blizzard devs on and off the project were hyped about it.

Former Blizzard president Mike Ybarra said that he'd "played many hours" of the game and was "incredibly excited about the team's vision and the brand-new world it presents for players to immerse themselves in together."

"All I can say is it's gonna absolutely rock," said novelist and Blizzard writer Christie Golden. "Hella beautiful too. I cannot wait!"

Microsoft acquired Activision Blizzard in 2023 and cancelled Odyssey in 2024. Ybarra left the company at the same time.

According to a Bloomberg report, development of Odyssey had started in Unreal Engine, but struggled under a mandate to switch to "an internal engine that the company had originally developed for mobile games." Odyssey was not close to release when it was cancelled, the publication reported.

Maybe it was a classic case of development hell, but a survival game with Blizzard's polish, storytelling, and art direction sounds like a good idea to me, and unlike some genres, co-op survival hasn't calcified. Even in a quite unfinished early access state and after lots of corporate drama, Subnautica 2 sold over 4 million copies this year.

Everwild | Cancelled in 2025

We never got a complete picture of what Everwild was going to be. Rare is best known these days for Sea of Thieves, in which players battle it out on the high seas in search of treasure. Everwild, by contrast, appeared to be a game about being kind to animals.

Everwild had been development for a long time when it was cancelled, and was reportedly rebooted once, which probably didn't help convince Microsoft that it should continue to fund a game that contained no exploding barrels or grimacing men.

But the pitch for Sea of Thieves probably raised eyebrows, too. A casual game to play with your friends, but it's PvP and players can grief each other? No progression beyond cosmetics? And you want to spend how much time making the water look awesome?

Rare's creativity shines in the trailer above: I don't know what's going on with the giant amphibian that carries fish (or its young?) around in its mouth, but the vibe is great.

Everwild was cancelled in 2025 during one of Microsoft's mass layoff waves.

Perfect Dark | Cancelled in 2025

The 2025 cuts also claimed a reboot of classic Rare first-person shooter Perfect Dark and one of the studios that was making it, The Initiative. ("Several unannounced projects" were also vaporized that day.)

The gameplay video above is the last we saw of the FPS. An immersive sim-ish shooter campaign with sci-fi gadgets is perhaps not a cutting-edge concept in 2026, but you can say the same about Gears of War: E-Day and the Halo campaign remake. Perfect Dark is a beloved classic, and the response to the gameplay reveal was positive.

Take-Two reportedly tried to take the game off of Microsoft's hands, but couldn't reach a deal. The GTA publisher clearly believed it had potential, though, because it snatched up the former leads on the game to found a new studio.

Contraband | Cancelled in 2025

Contraband was a collaboration between Microsoft and Just Cause developer Avalanche Studios Group. It was going to be a co-op smuggling game set in the '70s, but Avalanche announced in 2025 that active development of the game had ceased. It could theoretically still happen without Microsoft, but it doesn't seem likely.

We never found out much about Contraband, which was announced in 2021 with the gameplay-less teaser above, but an open world co-op crime game from the Just Cause developer sounds like a good time.

Project Blackbird | Cancelled in 2025

ZeniMax Online Studios, the developer behind Elder Scrolls Online, had quietly been working on a new MMO—codenamed Project Blackbird—for over six years before Microsoft cancelled it alongside the other games it tossed out in 2025. Phil Spencer reportedly liked the game a lot, but that wasn't enough to save it.

ZeniMax Online Studios founder Matt Firor resigned as a result of the cancellation, and said earlier this year that he'd been waiting his entire career to make a game like Project Blackbird. In a separate interview in April, Firor said that Blackbird would've been "fantastic" and that Microsoft missed an opportunity by not following through.

The reason it got the axe, Firor says, is that public companies like predictable, consistent revenue growth, and an MMO with lots of front-loaded development costs represents "a very large bet."

"It's just: Big business is big business," he said. "Microsoft is Microsoft, right? And a giant successful videogame on the Microsoft level was frankly not that stimulating to them."

Some of the laid-off Blackbird team went on to form a new studio with a wry name, Sackbird, and are now at work on a new project.

"After years in AAA, we wanted the freedom to take smart risks without waiting for a greenlight or chasing quarterly targets," Sackbird COO David Worley said when the studio was announced. "We're fully employee-owned and funded, which means we only answer to people who are passionate about games."

Xbox is flailing again. Major studio closures loom, the AI boom continues to erode the affordability of console hardware components, no one seems to want those consoles anyway and, according to Microsoft CEO Satya Nadella—a fierce advocate of the AI industry crippling the rest of consumer tech—the corp isn't making enough money from its first-party games.

All this, despite Microsoft having a market value of over $2 trillion, and owning some of the biggest games studios and IPs in the world, including Call of Duty and Minecraft.

What's going on? Everyone has an opinion, some more authoritative than others. Among those opining include Shawn Layden, a high profile former Sony executive who helped usher in the PlayStation 5 before his resignation in 2019. Overall, he spent 32 years with Sony.

Sony's PlayStation, of course, has troubles of its own, but Layden bowed out long before the worst of them manifested. He's criticized the industry's pivot to live service—which has proven a terrible tactical shift for Sony—and the continued reliance that major publishers and platform holders have on blockbusters. He also thinks industry consolidation is "the enemy of diversity", and that subscription services stifle creativity.

In other words: the beliefs he espouses would seem to put Microsoft firmly on his shit list.

In a LinkedIn post, game design consultant Tadhg Kelly reiterates some of the blunders, strategic shifts and curious tacks taken by Xbox since Asha Sharma took the reins in February. "The Xbox identity crisis will continue until morale improves," he writes. "We've had:

• A new CEO after previous leadership was beheaded
• A rebrand that was kinda just the old brand
• A reaffirmation of expensive Helix
• A claim that hardware can't be expensive to win
• A claim that 30% margin is done
• A claim that 3% margin is trouble
• Matthew Ball and some new tech-industry hires
• A claim about refocusing on core franchises
• A showcase of new games
• A killing of studios making those new games
• A claim that gaming is important to Microsoft
• A comment that gaming at Microsoft needs to stand alone

"And on and on and on," Kelly adds. "Strategy isn’t a collection of contradictory decisions that might matter. That's just tactics. Bob and weave. Let's just get through this. Sad times for Big Green."

Layden sounded off in the comments. "At the risk of sounding like a 'hater' (which, I'm really not), the moves evince a basic misunderstanding of how the interactive entertainment world moves."

He added: "Iykyk [If you know you know], which also means if you don't you don't."

Those are strong words. It'd be like a carpenter evincing "a basic misunderstanding" of how a lathe works, 25 years after their apprenticeship.

Reading this comment I can't help but remember the words of former Activision boss Bobby Kotick, who said in an interview last year that he once told Satya Nadella that he shouldn't be in gaming at all. "We [Kotick and Nadella] had half an hour together and he said: 'what can you tell me about gaming'? And I was like, dude, you shouldn't be in gaming. You're not a creative company. You should buy Workday or something, SAP. This is not a creative DNA company."

Kotick continued: "When he called to do the deal I said the same thing to him. You need us, because you're not going to figure out gaming with what you have. But is this really the priority?"

One thing's for sure: if Microsoft is, as Nadella claims, "not monetizing" its entertainment despite its clear advantages in terms of wealth and IP ownership, then it can hardly be labeled a smart or even halfway capable business. Certainly not one well-equipped to handle an existentially consequential technology like AI is proving to be.

Either that or, as a diabolically wealthy, publicly traded corp who makes the majority of its money from cloud services, it isn't fit to work in the creative industries.

Bloomberg reports that Compulsion Games isn't the only Microsoft studio fighting to stay open during the great "Xbox reset" announced last week by new Xbox CEO Asha Sharma.

Double Fine, Ninja Theory, and "several other studios" are at risk of closure, reports the publication, which cited undisclosed sources who are familiar with Microsoft's plans.

According to The Verge, Ninja Theory will close unless it finds a buyer, despite just having announced a new Hellblade game at the recent Xbox showcase.

Double Fine is "in active negotiations to spin off," Bloomberg says, but job losses are expected even for studios that manage to buy their independence.

Double Fine was founded 26 years ago by former LucasArts developer Tim Schafer, and is best known for Brütal Legend, crowdfunded adventure game Broken Age, and the Psychonauts series, as well as candid documentaries about the gamemaking process. The studio recently released Kiln, a multiplayer party game, and Keeper, a puzzle adventure game about a sentient lighthouse.

Microsoft acquired Double Fine in 2019 under the direction of former Xbox CEO Phil Spencer, who oversaw a spree of studio purchases, including the landmark Bethesda and Activision Blizzard acquisitions.

Schafer and Spencer appeared together at a media summit last year, a few months before Spencer announced his retirement. At the event, Schafer praised Spencer and Microsoft for respecting Double Fine's creative independence.

"When we talked about becoming acquired, it was a big thing for me, like, 'How do we keep our culture intact?'" Schafer said. "And everyone was like, 'No, we really want you to stay who you are.' And that's been true all these years … You know, creatively, we can be like, 'Hey, we want to make this game about a walking lighthouse,' and they're like, 'Cool. Sounds cool.'"

Now Xbox is "over extended," according to Sharma, although Microsoft as a whole made nearly $32 billion in profit last quarter, and has invested billions into AI.

We also learned today that the head of Xbox Game Studios and its chief of staff have stepped down.

Xbox Games Studios head Craig Duncan has stepped down after just over a year-and-a-half in the role, reports The Game Business.

Duncan led Sea of Thieves developer Rare for nearly 13 years before being promoted to head of Xbox Game Studios in 2024, which put the rest of Microsoft's studios under his stewardship, including Double Fine, Halo Studios, inXile, Obsidian, Playground Games, and The Coalition.

Xbox Game Studios chief of staff Louise O'Connor has also resigned, according to the publication. O'Connor also hails from Rare, which she joined all the way back in 1999 as an animator. O'Connor was promoted to Xbox Game Studios chief of staff in August last year.

The news comes as Xbox's new leaders, Asha Sharma and Matt Booty—who took over after Phil Spencer retired earlier this year—begin to implement an ominous-sounding "Xbox reset."

In an open letter last week, Sharma and Booty said that Xbox's studio acquisitions have left it "over extended," and Bloomberg reported that "significant" layoffs are being planned. Word on the street is that award-winning studio Compulsion Games is on the chopping block, and Bloomberg reports that Double Fine, Ninja Theory, and others are also at risk.

I have reached out to Microsoft for comment on the reported departures.

Just days after signalling that large-scale layoffs at Xbox are imminent as part of its ongoing overhaul, Microsoft's gaming division is reportedly planning to shutter Compulsion Games, the award-winning studio behind South of Midnight and We Happy Few (via Kotaku).

Neither Xbox or Compulsion Games have yet made an official statement regarding the studio's closure or associated layoffs, but multiple Compulsion Games employees have posted on LinkedIn and other social media platforms that they are looking for work.

Based in Montreal, Canada, Compulsion was founded in 2009 and released its first game, Contrast, in 2013. We Happy Few followed in 2018, and its most recent release, South of Midnight, launched in 2025 to an impressive critical reception: We scored it 83% in our review, saying "its poignant tale of hope and sorrow tailored to Deep South mythos keeps its head raised high," and it won the Games for Impact award at the 2025 Game Awards, Best New Intellectual Property at the BAFTAs, and a Peabody Award for interactive media.

Xbox CEO Asha Sharma has warned recently of major changes coming to Xbox, including a refocusing of resources on its major franchises. A Bloomberg report last week said major layoffs were going to be a part of that overhaul, in numbers that all but guaranteed at least one studio closure.

Sharma came close to confirming that in a message shared with Xbox employees: "We expanded our studio system when we needed a pipeline of content to meet multiple strategies across subscription, streaming, and devices. In the process, we have found ourselves over extended as we executed on changing strategies in a landscape of more readily available content."

Compulsion's reported closure comes just months after Xbox's new bosses bragged about the studio's achievements: In April, Sharma posted on X to congratulate Compulsion on its Peabody award, calling it "a well-deserved recognition for storytelling that truly matters." In a Game File interview published the next day, she said "the big things that we’re thinking about are we want to make great games," naming South of Midnight as an example of the kind of quality Xbox would supposedly be pursuing.

"South of Midnight today won a Peabody Award, which I think is such a validation of the storytelling capability of games these days," Matt Booty, Xbox's new chief creative officer, said in the same interview before elaborating that Microsoft is "dedicated to places where new [intellectual property] can come to life and where these stories can be told."

If Compulsion is the first closure to happen since Sharma's letter to Xbox employees was posted, it quite possibly won't be the last: With fewer than 100 employees listed on the company's LinkedIn page, it represents only a small percentage of the total cuts Xbox is expected to make over the next several weeks.

The resuscitation of Xbox has begun in earnest, but there's still much to be done, and still great uncertainty: Console exclusives are back but to what extent remains unclear, and of course the "reset" for a better future will almost certainly mean putting hundreds of people out of work. And it's possible that even bigger things could happen: A new report from The Information (via Reuters) says Microsoft is looking to shift its focus and resources to its biggest games, while simultaneously mulling the possibility of cutting the division loose entirely.

Three sources told The Information that Microsoft hasn't ruled out the possibility of spinning the Xbox division off as a standalone company, or making it a wholly-owned subsidiary. It's also apparently considering a joint venture with other partners—none named—which could make Xbox easier to sell after its overhaul. Nothing is imminent, according to the sources, but nothing is off limits, either.

The report also states that Xbox CEO Asha Sharma's plan to increase spending on Xbox's biggest game series, including Halo, Fallout, and The Elder Scrolls, has been approved by Microsoft CEO Satya Nadella and CFO Amy Hood, although the actual budgeting hasn't been locked down.

The primary goal of the increased spending is to speed up development of games in those series, and fair enough as far as it goes: It's been 11 years since Fallout 4, 15 years since Skyrim, and eight years since The Elder Scrolls 6 was announced, and we still have nothing to see but this empty teaser, and not even an official title:

Halo has also stagnated. As PC Gamer's Rory Norris wrote after the Xbox Games Showcase last weekend, Halo "has been treading water essentially since Microsoft set up 343 Industries to shepherd it into the future after Bungie's departure. That was almost 15 years ago, by the way." Halo Infinite, envisioned as the live service future of the franchise, halted new content updates in 2025, just four years after it launched. I don't think anyone expects, or wants, annualized Bethesda RPGs, but you can understand why Microsoft would want to hurry things along a bit.

At the same time, if there's one thing we've learned over the years it's that throwing money at this particular problem won't necessarily solve it. Microsoft has a big advantage over other mega-corps in that it already owns some of the biggest names in gaming, but whether it's able to make anything out of that—and whether it wants to make the effort in the first place—remains to be seen.

I've reached out to Microsoft for comment on the possibility of an Xbox spinoff and will update if I receive a reply.

Videogame analyst Matthew Ball predicted in his "State of Videogaming in 2026" report released earlier this year that in-game ad placements will become more common in PC and console games and services in the future, as they're a largely untapped source of revenue—income the industry needs and is increasingly struggling to find. Now he's the newly-hired chief strategy officer for Xbox, and in an interview with The Game Business, he says he hasn't changed his mind.

Ball said the issue is a "two-sided problem": The cost of making games keeps going up, particularly on the big-budget side of the street where Microsoft lives, and so is the cost of the hardware on which those games are played. All of that ultimately lands in the lap of consumers, who are eventually forced to reduce or stop spending money on games—and that's bad for the game companies in turn, because without consumer spending, growth stops, and growth is the core pillar of the economic system we've decided is best.

The solution, then, at least for this particular aspect of what is actually a very big and broad problem, is to figure out some way to keep people coming through the door (lower prices) without cutting into the monthly take (the consequence of lower prices). Thus, ads.

"I think the best evidence comes from the [TV] streaming space," Ball said. "In excess of 100% of net adds in the United States for years and years have been on the ad-supported tier. That has not excluded anyone from ad-free experiences. Those products are still there. They’re still popular.

"The question is not can we cram ads in everything. The question is, are there opportunities that allow the people who can't afford, or wouldn't try, to have an onboard to our properties and franchises?"

A recent Comscore report supports Ball's claim. Simply put, Netflix is embracing lower-priced ad-support subscription tiers because that's where the growth is: 45% of the service's "total household viewing hours" came from the ad-supported tier in 2025. And it's not unique to Netflix, as "total hours watched across major free ad supported streaming services grew by 43 percent year-over-year."

Whether or not it will actually happen (although I think the real question at this point is, how soon will it happen?), Ball cannot say: He's the chief strategy officer for Xbox so it seems like the kind of thing that would be right up his alley, but he said he's not privy to Microsoft's monetization plans. He does think it's a good idea, though, and not just for Xbox, but for gamers as a whole.

"[His interest] is coming from that perspective of how do we reach more people? How do we keep our products affordable? How do we make sure that we can continue to fund outstanding work from our development teams?" Ball said. "That’s the goal. It’s not about placing an ad in front of someone so that we can sell, you know, a pizza."

On Sunday, Microsoft put on its annual summer showcase at the Los Angeles Academy Museum of Motion Pictures to hype up the games coming in the year ahead: a Halo remake, a Gears of War prequel, a new action game starring Senua. At the showcase, new Xbox CEO Asha Sharma announced that fans with special badges at the event—all of whom paid their own way to Los Angeles and surely own an Xbox—will get a free limited edition Xbox Series X console.

On Wednesday, an open letter to Xbox employees titled "Xbox Reset" warned that the business is "currently unable to make as many consoles as players want to buy," and that the company "over extended" in its studio acquisition spree over the last few years. The casual tone of the message being signed "Asha and Matt" is a poor match for what it signals:

This month was the time for Asha's first big giveaway. Next month it will be time for Asha's first big layoffs.

It's long felt futile to point at the obvious hypocrisy of, say, giving away a bunch of consoles while complaining you can't manufacture enough to meet demand, while your parent company itself creates the conditions leading to the current "hardware component crisis," as Matt and Asha call it.

Those in charge can handwave that criticism away: 'It wasn't that many systems, really.' Or 'this fiscal year's budget is already set; it's next year's where we have to tighten our belts.' Or 'you gotta spend money to make money, right?'

The act of running one of these multibillion-dollar companies requires fully committing to—if not actually believing—the Orwellian doublespeak of it is the best of times and also it's time for hard choices. Or in the precise words of Asha and Matt's "Next 100 Days: Xbox Reset," they are poised to "build the #1 gaming and entertainment company" even though Xbox's "current platform infrastructure is not built for the battle ahead," it hasn't "adequately funded [its studios] to compete and win," and its hardware costs are now "over 5x the prices" it paid just two years ago.

The game developers working at the Xbox studios Sharma seems poised to lay off at the start of the fiscal year in July will surely appreciate the acknowledgement that they created "industry-defining franchises that have enormous potential and player demand," even if the publisher didn't adequately invest in them. It's not you, it's me is a famously well-received consolation.

Xbox flip-flopping on console exclusives, asking fans on X.com whether it should capitalize its name, and talking about "empowering new types of games" that can survive the RAMpocalypse all suggest a desperate flailing in search of a plan. But the plan for more cuts was surely preordained from the start of Sharma's first 100 days—as noted in today's letter, the division is making a mere 3% profit margin, a fact Asha and Matt did not just learn today.

That's a bad number! Unless you consider it in the context of the $32 billion in profit that Microsoft as a whole raked in just last quarter, in which case the idea of Xbox being in dire straits seems just as imaginary as the letter concluding on the feel-good back pat about Xbox creating "one of the few places where people come not just to play, but to connect with others to create memories."

Every we hear you missive to the fans is just spin for the brutal reality that the mandate for higher profits will mean more misery for studios Microsoft failed to safeguard.

Sharma was not hired to make brilliant decisions and redirect overnight the lumbering vessel that is any giant corporation changing strategies. She was hired to keep up a convincing smile while serving one pre-wrapped shit sandwich after another, and we're all stuck at the buffet.