Mag-log in bilang miyembro
Ang mga malawakang pagbabago ay nakakaapekto sa gaming division ng Microsoft bilang bahagi ng isang 'reset'.
"Hello everyone and welcome back to another GRTV News, today we're going to be touching on the big story that broke at the end of yesterday. In regards to Xbox, in regards to the big reset that's happening, if you haven't heard of this already at this point Xbox plans to lay off 3200 employees over the next fiscal year, or the current fiscal year rather. 1600 employees have been cut as of yesterday I believe, and a further 1600 will follow over the 12 months that are ahead of us. But on top of that we finally have answers to all these rumours that have been circulating in regards to which studios could be on the chopping block. Surprisingly none are actually being shut down, or at least as of yet. Two are regaining their independence, two are being sold off and one is now in a financial review. But across the board the Xbox Game Studios family are experiencing layoffs, they're experiencing a change of focus I suppose you could say. But there's a lot, so let's dive on in and go through everything. So yeah Xbox to lay off around 3200 employees, double fine and compulsion to regain their independence. Ninja Theory and Undead Labs have entered the terms to join new ownership and Arkane is reviewing potential strategic options. So yeah our business today is not healthy, that's how Xbox CEO Ashish Sharma phrased one of the opening paragraphs in the Xbox Wire blog post that just landed and finally answered many of the major questions we had in regards to the state of Xbox in the immediate future and years to come. Sharma explains that Xbox is operating at margins that are 3-10 times lower than comparable platform and publishing businesses while losing 64 cents for every dollar we invested, and that this combined with a brutal hardware crisis all means that we must reset Xbox. But what does this mean for the folk employed at Microsoft's gaming division? The article explains that in total 3200 employees are being laid off from Xbox throughout fiscal year 2027. Around 1600 jobs are being cut to date with the rest to follow over the next 12 months where part of the aim is to cut entire chunks out of the leadership hierarchy, reducing the layers of management from absurd 14 layers in places to at most 5 layers and with an aim for 3 layers. Likewise studios are being affected, but Xbox has managed to find a solution that will seemingly be in the best interest of those involved. For one, Compulsion Games, South of Midnight and Double Fine Productions, Killed and Keeper, are regaining their independence allowing them to operate how and as they would like without being part of the wider Microsoft or Xbox Game Studios umbrella. As for Ninja Theory and Undead Labs, these two teams have now entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3. The big catch seems to be Arkane as despite Jerk Gustafsson joining the developer as its new CEO, the company is beginning required consultation with its Works Council to review potential strategic options. Otherwise Activision, Bethesda, ZeniMax, Blizzard, King, Mojang and Xbox Game Studios are all seeing changes in size and a focus on higher priority projects while Mojang and King are now expected to report directly to Sharma. The article then explains that none of our first party publicly announced games or projects are being cancelled as part of these reductions and Sharma then notes the aim will be to operate under one model and to ensure it delivers clear investment decisions, learn from our successes and failures and hold ourselves accountable for results. All this comes as Sharma is preparing Xbox for years and years to come, signing off with these changes are about a bigger future for Xbox not a smaller one. The next decade of gaming will be larger, more global and more creative than anything we've ever seen before. This year we'll invest as much in Xbox as we ever have but we'll invest with greater focus, greater discipline and greater clarity all in service of making Xbox where the world plays and creates."
"So essentially it seems like the big thing about Xbox is that it's become too bloated.
A lot of investments that hadn't been paying off for them.
And again, a little bit of blame goes to everyone involved with this. It goes to the executives for greenlighting these acquisitions so blindly and not aligning with what the Xbox vision is."
"It goes hand in hand with the developers for making games that don't have a particularly profitable outlook. You know, you can't make a game that doesn't have a broad appeal and then not sell many copies of said game and then wonder why you're sort of in trouble a little bit. It doesn't, you know, it doesn't all go hand in hand."
"I think we're also seeing a lot of other things happening in regards to the Xbox machine.
I think Game Pass has become a bit of a time bomb for them in regards to everything was OK when Game Pass was increasing its subscriber numbers year over year.
But when it started plateauing and all of a sudden it wasn't reaching new audiences, you start asking the question, is Game Pass actually a viable business solution for them?
And I think what you're seeing here is that Xbox got them out of a lot of holes, Game Pass got them out of a lot of holes as of recent. And now it's not doing that or hasn't been doing that as of recent, especially with the price hikes. Another report has come out recently that says that Game Pass subscriber count is actually down from where it was two years ago."
"It was at 34 million, now it's at 30 million. And, you know, the prior forecasts by, I think, 2027 was that Game Pass, they wanted it to hit 70 million subscribers.
And I'm sure that if it hits 70 million, all of these layoffs and all of these situations that are happening here, they would have been put to bed because, you know, the business had flowed through Game Pass and Game Pass was raking in tons of cash for them."
"But it wasn't. Or rather, it didn't. And it hasn't gone that way.
I think Shama's also said on different occasions that the ultimate end goal is to take Xbox from having one billion players a year to one billion players a day. Now, that's a particularly big jump. You've got to basically increase your player count by 365 to reach that number."
"But what you have to also say about Xbox is they have a lot of resources and they have a lot of tools at their disposal and they can potentially reach a very large audience.
But they have to operate better. And it starts like this. You know, again, you can pick apart the developers and say, you know, you need games that are going to drive sales. But there are certain things that this blog post revealed that shows just how poorly managed Xbox was. You know, we're talking about the leadership side of things. And it said they want to cut the layers of management down to five layers or ideally three layers, down from 14 layers. Could you imagine working somewhere and to get approval, you had to go through 14 steps of hierarchy before it was greenlit. It's madness. Absolute madness. And they also, I don't believe they even had a COO, which means they didn't have somebody overlooking all the finances and making sure it all made sense. It's just little things like this that are starting to become put into practice. And the only other thing you have to look at when you're talking about this stuff now is how did it get to this point after, you know, Phil Spencer being at the top of Xbox for X amount of years? How did it get to this point where these key parts aren't put in place and where there's so much convoluted muddled mess in the center? It just it's baffling that it's got to this point."
"It's a big cost and there are a lot of people losing their jobs for it and it's going to affect the landscape of Xbox for a while. But again, it's not a positive, but it's better than it could be. You know, instead of seeing Compulsion and Double Fine and Ninja Theory and Undead Labs and maybe even Arcane all shuttered, two of them are regaining their independence, which doesn't mean they won't work with Xbox again. When Toys for Bob went independent, the deal was that Xbox would publish their next game, which was, you know, Spyro. I can't remember the title of it. The Spyro game that's launched in spring 2027. So something might happen like this. You never know with Compulsion and Double Fine, where like, you know, Xbox will help co-finance it a little bit and we'll publish it. But what we won't going to do is we're not going to be owned by us anymore."
"We won't be paying your salaries. That's going to be on to you and the sales of the game. So And as for Ninja Theory and Undead Labs, if they're being sold off, it means Xbox probably won't be involved with the publishing side of things at all, which is quite strange considering State of Decay and Senua."
"They were created as Xbox franchises. But again, the big one's Arcane. If it's, if they're in required consultation to review potential strategic options, it doesn't sound great for Arcane.
Again, all these reports also come out and say that Blade's over budget. It's taking too long.
We haven't seen a game from Arcane Leon in a while. Arcane Austin was shutted a few years ago."
"None of it sounding particularly good. And yes, Gustafson's coming to be the new CEO and hopefully he can get the company, the developer back on track. But that one is to me, I look at that, I'm a little bit concerned about the future of Arcane. But anyway, we should probably wrap up.
Been a long one. There's a lot of stuff we can talk about. And we probably will on the next The Game Rector Show podcast, so stay tuned for that. But otherwise, yeah, that's all the time that I have. I'll be back tomorrow for the next GRTV News of the Week. So until then, hope you enjoy Tuesday and I'll see you all on the next one. Take care."
