Xbox was warned this could happen. Years ago, a Microsoft architect emailed Phil Spencer worried that Xbox’s studio empire could turn into a bloodbath. Now the layoffs are here, studios are being cut loose, and the new plan seems to be chasing something even stranger: one billion people a day.
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00:00 Phil Spencer Was Warned
01:28 The Casualties At Xbox
05:00 Studios, Hardware, And The Reset
09:52 One Billion People A Day
Sources:
https://www.rockpapershotgun.com/south-of-midnight-studio-compulsion-games-are-allowing-staff-to-openly-seek-new-jobs-ahead-of-possible-xbox-layoffs-according-to-report
Xbox layoffs have hit the ID@Xbox team, as well.
— Mike Straw | Insider-Gaming.com (@mikestrawmedia.com) 2026-06-25T15:11:40.519Z
https://www.gamedeveloper.com/business/former-xbox-employees-warn-of-potential-for-retaliation-in-rumored-impending-layoffs
https://www.eurogamer.net/microsoft-xbox-game-pass-deals
https://gamesbeat.com/cwa-represented-workers-at-xbox-criticize-microsoft-management-and-pending-layoffs/
https://www.windowscentral.com/gaming/xbox/xbox-has-been-promising-state-of-decay-3-for-years-and-now-it-faces-cancellation-despite-its-trailers-and-alpha-what-are-we-even-doing-here
https://fixupx.com/IOInteractive/status/2072005107797893315
https://www.gamedeveloper.com/business/opinion-everything-hurts-and-no-one-knows-when-the-pain-will-end
NEW: Xbox confirms to Bloomberg News that it has pulled out of IO Interactive's 'Project Fantasy' video game. “We expect to invest about the same in content as we did last year. What's changing is where we're investing and the kinds of projects we're backing.”www.bloomberg.com/news/article…
— Jason Schreier (@jasonschreier.bsky.social) 2026-06-30T17:50:35.395Z
https://www.thegamebusiness.com/p/xbox-divided-over-its-future-and
https://www.windowscentral.com/gaming/xbox/change-is-afoot-at-xboxs-arkane-studios-and-machinegames-with-machines-co-founder-taking-over-arkanes-operations
https://news.xbox.com/en-us/2026/07/06/resetting-xbox/
https://www.bloomberg.com/news/articles/2026-06-15/studios-in-microsoft-s-xbox-division-brace-for-closures
Was told last night that Rare's on the block. Free one for you, friends.
— Patrick Garratt (@patlike.bsky.social) 2026-07-03T06:17:47.947Z
https://x.com/thegamebusiness/status/2072723341325037790
https://news.xbox.com/en-us/2026/06/10/next-100-days-xbox-reset/
https://www.theverge.com/news/961546/xbox-layoffs-studio-sales-2026
https://x.com/jg93/status/2074141503484563594?s=20
https://x.com/JuiceHead33/status/2074175659685851480
https://bsky.app/profile/lissanna.bsky.social/post/3mpydjvohxk2l
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.
— Jason Schreier (@jasonschreier.bsky.social) 2026-07-06T14:49:45.300Z
https://kotaku.com/elder-scrolls-online-team-seemingly-halved-xbox-layoffs-2000712920
https://x.com/Mr_Rebs_/status/2074193850550079841
https://www.windowscentral.com/gaming/blizzard/today-is-a-difficult-day-so-far-xboxs-cuts-havent-massively-impacted-blizzard-for-now
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.
— Bethesda Game Studios Union (@bethesdaunion.bsky.social) 2026-07-06T14:37:25.898Z
https://brands.roblox.com/metrics-insights
https://tech.sina.com.cn/i/2019-01-09/doc-ihqhqcis4468637.shtml
Big cuts, but Xbox has managed to avoid closing any studios today. Double Fine and Compulsion go indie. Ninja Theory and Undead Labs will have new owners. Arkane Lyon process starts today. CEO Asha Sharma wants Xbox to reach 1bn players a day (it currently hits 1bn a year).
— Christopher Dring (@dringo.bsky.social) 2026-07-06T13:35:07.400Z
https://www.gamefile.news/p/xbox-to-cut-20-of-workforce-plans
source
I don't get to watch your channel as often as I like but when I can, topically, the content is always were focused and relevant.
Microsoft is making bank supporting genocide in the Middle East. I do not understand why they pretend to be a game publisher.
The layoffs are to replace people with h1bs. Fire 3200 people, apply for 5000 h1bs. Something is much more fishy.
whatever asha sharma is doing is working, I have a huge crush on her. her dishonesty is so perfectly layered in telling me what I want to hear.
The thing that always pisses me off with these sackings is that it's never the people actually responsible who lose their jobs. Somehow even though they lead this team or whatever to failure, they get a promotion while all the hard working people who actually know what they're doing who worked for him get sacked. I mean it isn't even logical they sack thousands of people when they could sack one or two and save the same amount of money, if not more.
I think it has to do with ethnicity of CEO of Microsoft and CEO of XBOX . true Microsoft was American Brand for Americans when it was released now it's not more 😉 also I have sense the Company is racially preferential to certain entity now. trust me I know what I am talking about. They do not care.
Asha: claims to want to revive and reset xbox.
Reality: more of the same, line must go up.
I heard the definition of insanity is doing the same thing over and over again and expecting different results
the only way you get to one billion is if you make serious inroads in India and China.. but again asking 1 of 8 people in the world to be engaging with xbox every day is insane.. I game alot and I never touch xbox so what hope does that goal even have.
whats an xbox?
and asian based game studios are hiring…..
M$ seems to presume it can dictate what people will enjoy playing, which is such a fantasy you wouldn't be laughed at for presuming the CEOs have been replaced by hallucinating ai. I'm dumping winderz, I don't trust bethesda anymore, They've basically killed my favorite game makers… id, and Blizzard who should, imho, get the hell out before their arteries are cut and they just melt away. M$ is totally invested in ai I guess; CEOs with BIG as life dollar signs floating around their heads. THey're already filthy rich but, the ultimate insult, it's just not enough. Nicely done essay, as usual.
Maybe she said "1 billion" because she sees how irrational investors are regarding AI. Some people will literally take anything impressive and not even check if it's viable. Who cares that AI companies are losing money if they make such beautiful promises? So she does the same and tells them she aims at 1 billion daily users, which would be stupid, but for some people it will sound ambitious.
It seems we're living during times where anything can be sold if you make up numbers which are impressive enough.
They’re back to hiding layoffs, the days of bragging those are no more
I just want to say I really appreciate the way you don’t use ridiculous clickbait titles and go straight to the point. I read the title and I know what it’s about, love it! Very rare these days ❤
Unfortunately many families are impacted. By this decision, but I do think it’s the only way Xbox will survive.
I knew they had a lot of so-called bullshit jobs. Who knows how many incompetent employees there were just getting paid?
And nothing of value was lost.
1 billion users a day is easy when Xbox is a built-in app in windows. Xbox will be the brand for the subscription service. The personal hardware will be gone, the I.P.s they own and have run into the ground will get licensed out to devs who want to bid or take it up the arse from Microsoft.
claude in the right hands is like 50x devs. there's a lot of reasons for this but technology advancement is the biggest.
Excessive management is a plague in every business. Middle managers are often people who got the position by seniority rather than merit, and having been in a company for longer doesn't automatically make anyone good at managing.
ah yes, I love when studios show their games off to investors instead of players…
I'll never forgive Microsoft for buying and closing Access Software back in the day, which saw the end of Tex Murphy games.
They've just continued with that strategy really.