Xbox Announces Major Restructure: 3,200 Job Cuts and Studio Exits

It was pretty rich seeing armchair video game industry analysts act like the new CEO was gonna usher in a new age for Microsoft's gaming division because she got to announce the updated logo and some games that would have obviously been in development long before she became CEO.

Microsoft is never going to figure out gaming. It's more art than engineering and they can barely manage the engineering with all the intervention from marketing and HR in their products.

To me it's mostly unfortunate that this has left PlayStation with no direct competition because they've noticed and leaned into the not-giving-a-shit attitude after they had such a great console generation with the PS4. It's kinda crazy that we're already almost due for a new console generation and there's very little appetite for new consoles after this generation where it feels like it barely got started. And between graphics almost certainly at the point of diminishing returns, and hardware prices like they are right now, I can't imagine there's a market to sell something more capable than current gen consoles. The industry is in a very strange state.

At some point, the games industry decided it wanted to be interactive Hollywood, and the consequences are entirely predictable. Meanwhile, Nintendo just quietly shipped 3.8 million units of Tomodachi Life in two weeks, and 4 million of Pokopia in five. They're making actual games. Sony's obsession with prestige cinematic bloat, like Xbox, has also put them in a slow-motion death spiral that's going to become painfully obvious in a few years.

This is incredibly sad for a lot of my friends who are finding themselves out of work despite delivering well received products.

But at the same time I appreciate the candor of Asha saying that the corporate management are to blame and letting studios go back to being independent where possible.

Phil Spencer really messed up. Everyone in the industry knew Microsoft were making bad calls trying to dig themselves a hole with gamepass and simultaneously digging a hole with their acquisition spree. I’m glad that Asha is laying this bare even though it sucks to be brought in as the hatchet person.

This is an example of the glass cliff and I’m hoping she can help right the ship. I think they need to split to a wholly owned subsidiary rather than be in Microsoft proper, and I expect that to be announced at the Q1 investor meetings.

Phil really dug their hole deep. Microsoft themselves encouraged it. It’s been a decade of sheer incompetence at the highest level so I’m hoping they can right this without taking out half the industry in their wake.

It is neither possible nor desirable to own every great independent studio. We have also learned that we are not the best home for every type of studio

This is shockingly self-aware for microsoft

Reading this made me remember why I stopped playing my Xbox One: never-ending updates. I never played it very frequently so I disabled the sleep mode so it wouldn’t just stay on in my media cabinet heating my house. But of course that meant any time I spontaneously felt like using it there were 10 minutes of updates to download, so I would get annoyed and just do something else. Oh it can also play movies? Sorry movie night is ruined thanks to 30 minutes of downloading and installing updates. Eventually I just never turned it on again because all it did was download and install updates.

It really just killed all my interest in it because I couldn’t just turn it on and play a game unless I let it stay on all the time wasting energy and downloading constant updates in the background.

> We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes.

This is the new trendy management style - a few executive owners and then everyone else are expendable ICs, with almost no movement opportunity upwards. Only those on the Peter Thiel list or the equivilent among your private equity owners will be considered for key executive positions.

I think some of these game studios got so content with Microsoft constantly paying that they forgot to make games that would actually sell.

South of Midnight took 7 years to make and cost $100 million to make... yet sold hardly any copies and I'm not even sure who they were trying to make it for.

Meanwhile you have studios like Sandfall and Warhorse pumping out games on a fraction of the budget that ship millions (and imho, make better games).

> We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes.

xbox-specific issues aside, this proposes an interesting view of the future of work.

Impacted non-studio dev here. It's a bloodbath like some of the leaks in the past few weeks have said. Many important platform/infra teams getting gutted, even in areas where there's supposedly a ton of future investment.