With all of the exciting Xbox news lately, the last thing most of us expected would be major layoffs at the company, but here we are. According to the most recent Bloomberg report, the layoffs will be “substantial” and likely affect every department within the brand’s network.
This recent revelation marks the fourth round of dismissals of similar scale over the last year and a half, and the second of this year alone after the staff cut in January that affected a still mostly unknown number of employees at Xbox. This upcoming downsizing comes after the recently reported layoffs that impacted Microsoft’s sales and marketing organizations, as well as their decision to lay off around 6,000 or so employees back in May.
The unfortunate timing of this recent assessment of layoffs is only highlighted by the continued announcements from Xbox about the aggregated game library feature that is currently being tested by members of the Xbox Insider program, as well as their continued partnerships with AMD to “Push the boundaries of what’s possible in gaming,” Asus to create the ROG Xbox Ally and Ally X handheld gaming devices, and with today’s announcement of the Meta Quest 3S Xbox Edition Virtual Reality Headset.
The hype around the Xbox brand has reached a new peak in comparison to recent years and with good reason, but with the layoffs coming soon, many fans of the brand are expressing concern for the company’s future. Though this news may seem to indicate a downturn for Xbox, this isn’t necessarily the case when considering their plans for integrating the cloud gaming service “Xbox Play Anywhere”.
The company remains one of the major players in the console game with a recent record breaking fiscal quarter, but the strategy for a large part of the last decade has been to shift focus from singular home consoles, and lean more into a multi-platform gaming ecosystem through the use of handheld consoles, mobile devices, virtual reality headsets, PC integration, and much more, while utilizing and improving the Game Pass and cloud gaming services that are currently available.
With that said, Xbox President Sarah Bond noted earlier this month that Xbox is “working closely with the Windows team to ensure that Windows is the number one platform for gaming.” This statement was made alongside the recent reveal that the ROG Xbox Ally and Ally X handhelds would run on Windows 11 and will in-theory be compatible with the majority of gaming storefronts like Battle.net and Steam, which has been all-but confirmed with the current Xbox Insider testing of the new feature.
It seems as though Xbox is cutting down the size of many of their departments in an effort to restructure and better utilize their employees to focus on growing the brand into a gaming community that provides more player freedom in regard to where and how gamers can enjoy their favorite products. With that said, it isn’t an improbable prediction to say that the next-gen Xbox console might look a lot more like a gaming PC than the consoles players have grown accustomed to.
According to Microsoft’s most recent quarterly report, the Xbox gaming division is still profitable, but hardware sales on consistently declining and make up a relatively small portion of Microsoft’s bottom line. It’s possible that Microsoft intends to shrink Xbox down a bit until such time that the brand can be merged with the Windows department which would likely lead to the Windows operating system running future Xbox products, but this may invalidate the importance or excitement around getting a new Xbox console in general, making it seem as more of a novelty than a necessity in the scope of the overall gaming landscape.
With the recent reports that Xbox is under scrutiny from Microsoft to increase overall profits after the brief deficit left from acquiring expensive major studios like Bethesda and Activision-Blizzard, it seems like Xbox is not only looking to increase profit through increasing the overall audience size of the brand by releasing Xbox Game Studios games on rival consoles while also looking to broaden the ways that gamers can interact with their products, but also by cutting labor costs through the elimination of members of the workforce that they deemed unnecessary in achieving their goals.
The likelihood that Microsoft will ever bow out from the gaming industry is slim as they have remained a staple in the cultural zeitgeist for more than 20 years, but their place in the gaming community is evolving rapidly. It will be interesting to see how this shakes out as more news is revealed as we draw nearer to the 25th anniversary of the brand.
Would you prefer they stick to making consoles? Are you excited to see more cloud integration across multiple platforms? How do you feel about the recent layoffs? Let us know over on the Discord!
