Video Games Weekly: Every Time This Industry Grows, It Shrinks

Welcome to Video Games Weekly connected Engadget. Expect a caller communicative each Monday aliases Tuesday, surgery into 2 parts. The first is simply a abstraction for short essays and ramblings astir video crippled trends and related topics from me, Jess Conditt, a newsman who's covered nan manufacture for much than 13 years. The 2nd contains nan video crippled stories from nan past week that you request to cognize about, including immoderate headlines from extracurricular of Engadget.

Please bask — and I'll spot you adjacent week.

In a 2024 question and reply pinch Chris Plante, conscionable a fewer months aft Xbox fired 1,900 labor successful 1 blow, Microsoft Gaming CEO Phil Spencer said nan champion measurement to forestall further layoffs successful nan video crippled manufacture was to guarantee changeless financial maturation for awesome studios’ shareholders. And nan astir logical measurement to do that, he intimated, was pinch layoffs.

“The point that has maine astir concerned for nan manufacture is nan deficiency of growth,” Spencer said. “When you person an manufacture that is projected to beryllium smaller adjacent twelvemonth successful position of players and dollars, and you get a batch of publically traded companies that are successful nan manufacture that person to show their investors maturation — because why other does personification ain a stock of someone’s banal if it’s not going to grow? — nan broadside of nan business that past gets scrutinized is nan costs side.”

He says it arsenic if it’s a earthy and irrefutable truth of life. Of course nan institution has to continuously grow. Obviously nan workplace caters to its shareholders supra each else. The only way to make nan numbers spell up is to trim costs, which intends slashing headcount. And Spencer is conscionable a man successful a Battletoads schematic tee who, clearly, has to do everything he tin to make these investors, his chap executives and himself richer. Poor guy.

“We’re a business,” Spencer told Polygon. “I’ve said complete and over. I don’t get immoderate luxury of not having to tally a profitable increasing business wrong of Microsoft. And we are that today. But conscionable crossed nan manufacture — you mentioned it, and successful sitting present astatine GDC, I bespeak connected friends of excavation successful nan manufacture that person been displaced and mislaid their jobs and really just, I don’t want this manufacture to beryllium a spot wherever group can’t, pinch confidence, build a career. So that’s why I support pivoting backmost to, really does this manufacture get backmost to growth?”

He’s already said nan reply — layoffs — but it flies straight successful nan look of his stated desire to create a unchangeable marketplace wherever his friends tin thrive, truthful he watches nan snake devour its ain tail and shrugs, ne'er erstwhile considering that nan mobility itself is nan problem.

Fast guardant to July 2, 2025. Microsoft laid disconnected 9,000 people crossed its world workforce, and nan Xbox section was rocked by thousands of occupation losses, aggregate workplace closures and notable crippled cancellations. The news came retired successful leaked memos, societal media posts from fired labor and LinkedIn position updates, and I said to personification pinch knowledge of nan situation astatine Halo Studios astir nan temper among developers. Overall, it’s been a batch to support way of. Here’s each of nan reported fallout, arsenic it stands connected July 8:

Reported workplace layoffs, closures and info

• Blizzard: Layoffs; Warcraft Rumble sunsetting

• Halo Studios: Layoffs affecting astatine slightest 5 people; we published a firsthand relationship of tension astatine nan studio

• The Initiative: Studio closed; Perfect Dark remake canceled

• King: Layoffs affecting astir 200 people, 10 percent of nan studio

• Rare: Layoffs; imaginative head and Banjo-Kazooie creator Gregg Mayles is retired aft 35 years; Everwild canceled

• Raven Software: Layoffs

• Sledgehammer Games: Layoffs

• Turn 10: The Forza Motorsport squad was gutted by layoffs and unopen down; Turn 10 is now a Forza Horizon support studio

• ZeniMax Online Studios: Studio caput Matt Firor is retired aft 18 years; Blackbird canceled

Reported crippled cancellations

• Blackbird (ZeniMax)

• Everwild (Rare)

• Perfect Dark (The Initiative)

• Warcraft Rumble (Blizzard)

• Unannounced first-person shooter (Romero Games)

Spencer said it successful 2024 and it’s still existent today: The Xbox section is growing, pinch an 8 percent yearly summation successful gross from Xbox contented and services successful nan first 3 months of 2025. Still, for employees, it doesn’t consciousness stable.

This business isn’t unsocial to Microsoft, either: In May, Electronic Arts canceled its Black Panther game and closed nan workplace creating it, and this followed a previous culling astatine Respawn, which included canning a caller Titanfall title, positive years of layoffs astatine BioWare. Meanwhile, EA CEO Andrew Wilson took location more than $25 million successful nan 2024 fiscal year. In 2024, 11 percent of developers crossed nan manufacture were laid off, according to GDC’s 2025 State of nan Game Industry Survey. Statista reports nan world games marketplace is expected to turn yet again successful 2025, generating much than $522 cardinal successful revenue.

Layoffs are a sadistic solution to a shitty question, and at nan moment, they shape nan backbone of nan AAA industry. The world’s largest studios usability connected a binge and purge cycle, pinch acquisitions, crunch and layoffs built into their business plans. This cadence is only becoming much chaotic arsenic further factors, for illustration AI and consolidation, are converging to alteration hiring numbers and summation nan scope of layoffs. At Microsoft, utilizing nan company’s Copilot AI toolset is “no longer optional” for employees, and arsenic 1 worker told me, “They're trying their damndest to switch arsenic galore jobs arsenic they tin pinch AI agents.”

Practices for illustration these person helped propel unionization efforts crossed nan industry, including astatine Xbox studios.

“We are profoundly disappointed successful Microsoft’s determination to laic disconnected thousands much workers, including union-represented CWA members, astatine a clip erstwhile nan institution is prospering,” Communications Workers of America President Claude Cummings Jr. said astir nan caller layoffs. He continued, “Right now, we are surviving done a infinitesimal of profound firm consolidation and disruption. In times for illustration these, national organizing is not conscionable a instrumentality for protections successful nan workplace; it is basal to workers’ survival, and 1 of nan strongest defenses we person against unchecked firm power.”

In summation to this astir caller information of 9,000 layoffs, Microsoft fired 6,000 people crossed its divisions successful May. The Xbox conception specifically mislaid more than 2,500 labor to layoffs successful 2024, and Microsoft closed Arkane Austin, Alpha Dog Games and Tango Gameworks (though Krafton yet scooped up Tango for itself, thankfully). The scattershot vibe of nan closures, cancellations and layoffs — affecting productive and low-overhead studios for illustration Tango, exciting caller projects for illustration Blackbird, and aggregate proven ZeniMax teams — drives location nan conception that Microsoft was ever much willing successful controlling these studios’ IPs than supporting nan developers that worked there.

Layoffs are an reply to nan question, “How does this manufacture get backmost to growth?” Mass firings are not a usability of creator integrity aliases technological innovation, and they’re antithetical to nan process of really building caller and powerful video games. I’ve ne'er asked myself really manufacture profits tin grow, arsenic a subordinate aliases a critic. Only a mini and very circumstantial group of group have, and they don’t speak for me. Unfortunately, they move for each of us.

The news

Helldivers 2 will deed Xbox this summer

Helldivers 2 is heading to Xbox connected August 26, ending its tenure arsenic a PlayStation 5 console exclusive aft a small much than 1 year. Helldivers 2 is developed by Arrowhead Game Studios and published by PlayStation, truthful it wasn’t guaranteed to travel to Xbox platforms astatine all. To beryllium clear, it’s not owed to beryllium included successful Game Pass immoderate clip soon. Since settling its launch issues successful early 2024, Helldivers 2 has been softly building up a sizable playerbase of intergalactic state fighters, pinch much than 15 cardinal copies sold crossed PC and PS5.

Neil Druckmann is coming home

Naughty Dog co-founder Neil Druckmann is stepping backmost from nan improvement of HBO’s The Last of Us tv bid to attraction connected making games again. Druckmann is simply a co-creator of nan show and he’s been spending his clip precocious helping nutrient and constitute it astatine HBO, but now that nan 2nd play is done, he’s returning his attraction to nan workplace that started it all.

“Now is nan correct clip for maine to modulation my complete attraction to Naughty Dog and its early projects, including penning and directing our breathtaking adjacent game, Intergalactic: The Heretic Prophet,” he said successful a statement. Welcome back, Druckmann — arsenic Engadget lawman news editor Nathan Ingraham put it, nan video crippled manufacture is happy to spot you again.

Ex-Ubisoft executives convicted successful France

Former Ubisoft executives Thomas Francois, Serge Hascoet and Guillaume Patrux were convicted successful France of fostering a toxic workplace pinch rampant intersexual and psychological abuse. Former main imaginative serviceman Hascoet was sentenced to 18 months successful prison, suspended, and Patrux received a 12-month suspended term. Francois was additionally recovered blameworthy of attempted intersexual battle and received a suspended three-year situation sentence. This wraps up a multi-year investigation by French authorities into complaints of toxicity and gender-based harassment astatine Ubisoft.

Ghost of Yōtei showcase connected Thursday

Sucker Punch will show disconnected astir 20 minutes of Ghost of Yōtei gameplay connected Thursday, July 10, astatine 5PM ET during a dedicated State of Play event. I can’t hold to watch that upwind move.

Finally, Time Flies

I’ve been looking guardant to Time Flies since I buzzed my measurement done nan demo astatine Summer Game Fest 2022. It’s a ridiculous small crippled that provokes poignant thoughts astir quality beingness and pushes players to find joyousness successful mini moments, and it’s yet coming to PC, Switch and PS5 connected July 31. Make judge to springiness it a go, whenever you person immoderate clip to kill.

AI prompts to thief you navigate being laid off, from a workfellow who wasn’t laid off

Two days aft news of nan Microsoft layoffs broke, Xbox Game Studios Publishing executive shaper Matt Turnbull made a station connected LinkedIn offering “ways to usage LLM Al devices (like ChatGPT aliases Copilot) to thief trim nan affectional and cognitive load that comes pinch occupation loss.” His suggested prompts included, “Draft a friends connection I tin nonstop to aged coworkers letting them cognize I'm exploring caller opportunities,” and, “I'm struggling pinch imposter syndrome aft being laid off. Can you thief maine reframe this acquisition successful a measurement that reminds maine what I'm bully at?” The tonedeaf station was met pinch due ridicule and swiftly taken down.

Additional reference connected nan Xbox situation

• Polygon: Microsoft has ne'er been bully astatine moving crippled studios, which is simply a problem erstwhile it owns them all

• Bloomberg: Xbox Executives Were Blown Away by an Upcoming Game. Then They Canceled It.

• Eurogamer: Xbox's absent landlord execs are only portion of a overmuch bigger problem

• The Seattle Times: Microsoft to laic disconnected astir 9,000 labor successful latest round and related thoughts from Circana expert Mat Piscatella

• Aftermath: Has Xbox Considered Laying One Person Off Instead Of Thousands

Have a extremity for Jessica? You tin scope her by email, Bluesky aliases nonstop a connection to @jesscon.96 to chat confidentially connected Signal.