2026 has been a year of great change at Xbox, with the console maker engaging in a major restructure leading to the parting of ways with 5 different studios and thousands of employees. One notable move made by Xbox was the appointment of Jared Palmer as the new vice-president of engineering. Joining the brand this past May, Palmer has already announced that he is leaving Xbox.

Taking to Twitter, the recently-appointed VP of Engineering at Xbox – Jared Palmer – announced his departure from the company, writing:

“Personal update: I’ve joined @Cognition to lead engineering. I’m grateful to [Asha Sharma] and everyone at Xbox for an amazing year. Excited for this next chapter with [Scott Wu] and team.”

As mentioned, Palmer was a relatively recent addition to the Xbox team, with the announcement happening just a couple months ago in early May. At the time, Palmer was said to be joining “as a member of technical staff to work on product, engineering, developer tools and infrastructure” while also serving as a”taste” maker of sorts.

As with Sharma herself, Palmer came from an AI background, previously serving as the ‘CoreAI vice president of product’ and a ‘senior vice president of Microsoft's GitHub subsidiary.’

Whether his short stint at Xbox was always part of the plan or not, we will have to wait and find out. Either way, this latest change does not lend a great deal of confidence to the new Xbox regime.

KitGuru says: What do you think of this latest move? Is it an indicator of deeper issues? Or did Palmer simply receive an offer he couldn’t refuse? Let us know your thoughts down below.

Following the mass Xbox layoffs (3,200 employees to be cut by July 2027, not to mention all the codev partners and vendors), developers and analysts started looking into what happened for the division to reach such a low point, and the failure of Game Pass came up in most conversations, especially when a new report revealed that the subscriber base actually decreased from 34 to 30 million. Moon Studios CEO Thomas Mahler, for instance, opined that they never delivered the big hits a subscription service would need. Anyway, the big question mark now is pertaining to the future of Game […]

Read full article at https://wccftech.com/xbox-studio-leaders-detest-game-pass-schreier/

Xbox's planned 3,200 layoffs by July 2027 are already easily the biggest round of layoffs the industry has ever seen if taken at mere face value, but Bloomberg's Jason Schreier argues that's just the proverbial tip of the iceberg. In a new YouTube video, the journalist highlights the "hidden cuts" of the many contractors that were linked to a canceled project. Nowadays, triple-A game development involves several studios working together, some of which are external. For example, he reveals that the Perfect Dark reboot wasn't developed solely by The Initiative and Crystal Dynamics: sister studio Eidos Montréal was also involved, […]

Read full article at https://wccftech.com/xbox-3200-layoffs-hidden-cuts-contractors-schreier/

ZeniMax Online Studios was among the first-party studios most affected by the Xbox layoffs in both July 2025 and 2026. Last year, the team saw its sci-fi online game Project Blackbird (with related layoffs of a few hundred employees who had been working on it for years) canceled despite then-Xbox CEO Phil Spencer reportedly loving it. The end of Project Blackbird also directly led to the resignation of ZeniMax Online Studios founder Matt Firor, who would later label it as a missed opportunity for Xbox. Following the cancellation of Blackbird, ZOS refocused on its prize jewel, the popular MMORPG The […]

Read full article at https://wccftech.com/zenimax-eso-xbox-layoffs-content-pace/

Amid all the problems that besiege Microsoft's Xbox division, the studio divestitures, the layoffs, the declining business, and even the loss of a few million Game Pass subscribers, lies one lingering question: what actually is Xbox? A platform or the biggest third-party publisher? Microsoft certainly tried its damnedest to confuse consumers with its constantly shifting strategy regarding first-party content, as well as the delirious "This Is an Xbox" campaign. Xbox CEO Asha Sharma quickly tossed it in the trash after taking over from Phil Spencer, seeking a return to the brand's core values. But even she admitted that there's a fundamental […]

Read full article at https://wccftech.com/xbox-cant-be-both-platform-and-worlds-biggest-publisher/

A storm passed through many internal Xbox studios between studio divestitures and mass layoffs, but Activision Blizzard largely emerged unscathed this time around, likely because it's the main money-maker at present. We know that Call of Duty prints money even in off years, for example. But even the Blizzard side has been doing well lately, thanks to a resurgence of its core IPs: Overwatch, Warcraft, and Diablo. That's what Bloomberg's Jason Schreier confirmed in his latest video, while teasing that the company has "a ton" of projects underway, including the rumored StarCraft shooter game. So right now, Blizzard is kind […]

Read full article at https://wccftech.com/blizzard-overwatch-warcraft-diablo-momentum-xbox-layoffs-uncertainty/

Following weeks of leaks and rumours, Microsoft finally made it official that they would be parting ways with 5 of their previously-acquired studios while also letting go of more than 3000 employees – half now, and the other half throughout the year. While details were somewhat light at the time, we have now gotten a clearer picture on how this is impacting Xbox Studios.

In the immediacy following the Xbox announcement, reports started popping up uncovering some of the less pleasant aspects of this recent shake-up. While we previously spoke on the fact that id Software have reportedly lost around half of its entire workforce, new details have emerged regarding Xbox’s other studios.

As discovered by the publication GameFile, new WARN notices released by multiple US states show just how wide-sweeping these recent lay-offs have been. According to these notices, Obsidian Entertainment is losing 52 workers (around 25% of its developers), with Zenimax Online Studios and Zenimax HQ seeing 213 and 166 lay-offs respectively.

Additionally, known insider Jason Schreier recently claimed that this marks a “big pivot” for Obsidian, with The Outer Worlds studio having its sequel to Avowed cancelled in favour of working on a new Fallout game.

As mentioned previously, we will likely continue to learn more about how exactly each studio is being impacted as the days progress. Either way, this is a dark time for the games industry.

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KitGuru says: What do you think of these new details? Will Xbox recover from all of this? Let us know down below.

Xbox CEO Asha Sharma is reportedly betting heavily on major Bethesda Game Studios franchises like The Elder Scrolls and Fallout, yet it is exactly the studios behind The Elder Scrolls that are among the most affected by the recent layoffs. ZeniMax Online Studios, maker of The Elder Scrolls Online, was forced to cut 213 employees, forcing the team to revise its announced roadmap for the game. But even BGS itself was gutted. The Union already mentioned via social media that dozens were removed, making the road to the launch of The Elder Scrolls VI even harder. Today, IGN published a […]

Read full article at https://wccftech.com/bethesda-veteran-cut-xbox-layoffs-the-elder-scrolls-vi-delay/

We previously reported that DOOM developer id Software was significantly affected by the mass Xbox layoffs, though the extent of it was unclear. Some people said the studio might be halved, but it looks like the situation might be even worse. The website Game Developer managed to obtain a WARN (Worker Adjustment and Retraining Notification) notice filed in Texas, which reports that ZeniMax Media has laid off 158 employees in the state. 22 of them are from Bethesda Game Studios Austin, which works on Fallout 76, and the remaining 136 were cut from id Software, with 96 working at the studio's headquarters […]

Read full article at https://wccftech.com/id-software-lost-73-5-percent-staff-after-xbox-cuts/

Following the umpteenth destructive wave of layoffs at Xbox, which this time also led to four (possibly five) studio divestitures and thousands more job cuts at historic studios like Bethesda, Obsidian, and id, it has become abundantly clear that the whole strategy centered on Game Pass was flawed. Xbox head Phil Spencer, with the blessing of Microsoft CEO Satya Nadella, explicitly sought to replicate Netflix's subscription service boom in gaming. However, the reality is that the two forms of entertainment couldn't be more different: games are generally much longer than TV series, for starters. Moreover, unlike TV shows or movies, they […]

Read full article at https://wccftech.com/xbox-netflix-playbook-game-pass-reverse/

Xbox has recently made some massive internal changes, laying off over 3000 of its employees and parting ways with 5 of its previously-acquired studios. While the circumstance of each team is different, State of Decay’s Undead Labs have now come out to comment on the matter, releasing an official statement.

Taking to the official State of Decay subreddit, Undead Labs released a statement on the recent events, writing:
“Today, Undead Labs begins a new Chapter. We're transitioning out of XBOX. And while we can't share all the details just yet, we can tell you this: State of Decay 3 is still coming. The team is working hard and our commitment to this community has never been stronger. More news soon. Survivors stick together.”

They concluded with: “We'll share more when there is more to share. Appreciate all the well-wishes and support. Ultimately, we are here because of you.”

For the uninitiated, as part of Microsoft’s recent Xbox shake-up, Undead Labs is set to be sold off. Details are currently light on the matter, but according to Xbox CEO Asha Sharma the studio has “entered terms to join new ownership with funding to complete and grow [State of Decay 3].”

What this means exactly is unknown, and based on Undead Labs’ own statement, don’t expect a full explanation any time soon. That being said, things at Undead Labs are likely to be rather tumultuous right now, and so time is needed in order to figure out exactly what’s next.

Discuss on our Facebook page HERE.

KitGuru says: What do you think of all the new developments at Xbox? Are you glad to see that the studio isn't being shut down? Let us know down below.

Back during the early days of Xbox Game Pass, Microsoft had expressed its hopes for the game subscription service to grow into a major player across all of entertainment, wanting the platform to one day reach as many as 100 million subscribers. In the years since, not only has the industry changed in many ways, but so too has Game Pass itself. Even so, it appears as though the service is struggling to break past its ceiling – with Game Pass reportedly still stuck at around 30 million subscribers.

In a report by The Wall Street Journal (paywalled) discussing Microsoft’s recent Xbox shake-ups, the publication revealed that the console maker had “projected Game Pass subscriptions would reach around 77 million this year”. Unfortunately for Xbox, they are far from reaching this goal, with the publication reporting that Game Pass “currently has about 30 million, a person familiar with the matter said.”

For some context, Microsoft announced back in early 2022 that Game Pass had reached 25 million subscribers. Two years later, the company revealed that the figure had jumped to 34 million subscribers.

While initially seen as a solid amount of growth, this increase came in the wake of Microsoft’s Game Pass overhaul – in which previous Xbox Live Gold members were transitioned over to Game Pass.

Since then, Microsoft made further changes to Game Pass: Hiked up its price massively (losing millions of subscribers in the meantime); added Call of Duty; removed Call of Duty and brought prices back down slightly.

While it is safe to assume that Xbox will likely never reach its 100 million Game Pass subscriber maker, CEO Asha Sharma has recently expressed even more ambitious goals – wanting Xbox to one day have over 1 Billion daily active users. We will have to wait and see whether either of these pipe-dreams come true.

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KitGuru says: What do you think of Game Pass in 2026? Has it run its course? Will the service ever grow to 100 million subscribers? Let us know down below.

Last week, IO Interactive announced that it was forced to cut some of its staff after Xbox abandoned funding for the Project Fantasy IP, first revealed over three years ago. Today, the developer has confirmed that it regained complete control of the intellectual property and the project, which it still wants to fund out of its own pockets. However, the downside is that the Istanbul studio, which opened in March 2023, will have to shutter. Following the end of our external finance partnership on Project Fantasy, IOI has regained full ownership of the project and our IP. We will continue to develop and […]

Read full article at https://wccftech.com/io-interactive-project-fantasy-funding-alone-xbox-bails-istanbul-office/

The past few weeks have been rather stressful, with the future of Xbox seemingly being in flux while we waited for Microsoft to officially announce a number of wide-ranging changes across the console maker’s studios. Finally, the cat has been let out of the bag, with as many as 5 different teams set to part ways with Xbox. Despite this, CEO Asha Sharma remains confident and ambitious, claiming that they hope Xbox will one day serve “more than a billion people each day.”

As obtained by publication The Verge (paywalled), Xbox CEO Asha Sharma recently sent out a memo to employees, finally addressing the future of the company in the wake of constant leaks/rumours.

The memo is rather lengthy, and includes details on what will become of studios Arkane; Compulsion Games; Double Fine; Ninja Theory and Undead Labs (with some being sold off and others going independent).

This, of course, is all in service of Xbox’s long-term health according to Sharma, who seems to have some rather ambitious plans for the console maker.

Near the end of the memo, Sharma revealed that she hopes Xbox will one day surpass all other console manufacturers combined, stating:

“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.”

Given that even the likes of PlayStation ‘only’ sees roughly 130 million monthly active users, Xbox wanting to almost 10x the figure on a daily basis seems like a bit of a stretch. That said, we will have to wait and see.

Discuss on our Facebook page HERE.

KitGuru says: What do you think of this latest memo? Is 1 billion daily users feasible? Will Xbox still exist in 2035? Let us know your thoughts down below.

The layoff hammer has finally fallen at Xbox, with CEO Asha Sharma herself announcing that the division will lose 3,200 employees through job cuts and four studio divestitures (plus a wildcard). The wildcard is Arkane Lyon, which the executive says has already begun the obligatory consultation with its Works Council to" review potential strategic options". This suggests every option is still on the table for the studio that made Dishonored and Deathloop: closure, going independent, or finding a buyer. The known quantities are Compulsion Games (Contrast, We Happy Few, South of Midnight) and Double Fine Productions (Psychonauts, Brutal Legend, Broken […]

Read full article at https://wccftech.com/xbox-reset-3200-layoffs-studio-shake-up/

2026 is a year of great change at Xbox, with the appointment of CEO Asha Sharma ushering in new strategies, a change in direction and a ‘reset’ of sorts. Unfortunately, part of this plan seems to include the closure of many different first party studios. While officially, we still do not know exactly what’s in store, insiders have claimed that Microsoft is hoping to still release all of its previously-announced games in one form or another.

The recent reports that Microsoft is looking to shut down / sell-off a bunch of its studios has led to a ton of chaos in the video games industry, with rumours ranging from claims that the console maker is hoping to sell off some of its studios, to statements suggesting that the likes of Double Fine; Arkane; Compulsion Games; Ninja Theory and more could be wholly shut down – despite some of them literally just announcing a new game.

While we will have to wait and see what becomes of these studios, insiders are now claiming that Microsoft could be giving the teams one last hurrah, with Jez Corden of Windows Central claiming: “The best-case scenario is some of these studios do find a buyer, but there are some of the studios that could either go there, could be independent, they could be bought out by the individuals who sold the company originally.”

Corden continued, “We're going to see it from next week. We're going to see a combination of studios going independent, studios being sold to the publishers, and then potentially some smaller studios potentially being closed. But then I would expect also head counts across the board. I think every studio is going to have layoffs, at least some layoffs.”

According to Corden, the one silver lining in all this is the fact that these potentially-shuttered studios could still receive an opportunity to get their games past the finish line, stating: “So from what I've heard, the plan is if they can't find a buyer, they'll try and see those studios through to complete in what has already been announced.”

Of course, Asha Sharma herself once said “the plan’s the plan until it’s not the plan” and so we will simply have to wait and see.

Discuss on our Facebook page HERE.

KitGuru says: What do you think of this latest report? Would it be better or worse if Microsoft were to let these teams finish their projects only to then be shut down regardless? Let us know down below.

2026 has been an important year for Xbox, with the console maker seeing a new suite of higher-ups in the form of CEO Asha Sharma – who has quickly brought with her sweeping changes across the board. While some of these rapid decisions have proven to be a success for now, insiders have claimed that internally Xbox employees are divided on the current strategy, suggesting that Microsoft / Sharma are “listening to Twitter” too much.

Releasing the latest edition of their newsletter, Christopher Dring of The Game Business spoke on the current division which seems to be growing inside Xbox. While the appointment of new CEO Asha Sharma has come with lots of rapid and sweeping changes (including a rebranding of Xbox, changes to exclusivity, reducing Game Pass prices and more), some fear that the console maker might be moving too quickly.

According to Dring, “There is frustration, and even division, within the Xbox ranks” with Sharma bringing in “a start-up mentality into Xbox” where “speed is a priority.”

One such example comes with the recent console price increase, where-in Xbox reportedly pushed out its announcement earlier than planned in response to iPhone maker Apple’s own pricing changes.

All of this and more has seemingly led to issues internally, with Dring reporting that “numerous people I’ve spoken to at Xbox feel there’s too much ‘listening to Twitter’” including one studio boss who stated “we’re chasing a declining market with franchises that are past their prime.”

Xbox is a volatile company in a market which is perhaps more volatile than it has ever been before, and so while changes are likely necessary, this still represents quite a concerning time for the brand. The full newsletter can be found HERE.

KitGuru says: What do you think of Xbox’s current strategy? Is it working, or are they simply trying to placate a dwindling core audience? Let us know down below.

The rumored Xbox cuts are underway, with at least five first-party studios potentially closing: Double Fine, Compulsion Games, Ninja Theory, Undead Labs, and Arkane Lyon. But Xbox CEO Asha Sharma is also trimming Xbox's funding for third-party studios: today, they officially pulled out of funding Project Fantasy, IO Interactive's fantasy online action RPG announced in early 2023 and still largely under wraps, given that the Danish developer was busy making 007 First Light. IO Interactive revealed the news in a tweet, confirming that Xbox's decision inevitably forces the studio to lay off staff. However, they also made it clear that […]

Read full article at https://wccftech.com/xbox-funding-purge-io-interactive-rpg-kojima-od/

Once again, the video game industry is caught in a limbo state, waiting for the hammer of more mass layoffs to fall, and once again, it's Xbox and Microsoft bringing its gavel down. While Asha Sharma and the rest of Team Green's leadership position these cuts as a "reset" for the company, the CWA and its members point out that the company has tried mass layoffs, multiple times in recent years. Clearly, attempting to 'reset' the business like this hasn't been working, and now, Microsoft is poised to lose what veteran analyst Joost van Dreunen rightfully calls the gaming industry's […]

Read full article at https://wccftech.com/xbox-mass-layoffs-put-them-behind-short-staffed-short-sighted-says-analyst/