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Xbox employees aren’t out of the woods yet as more cost cuts may be coming

Although three of Microsoft’s game studios are shutting down this week, the remaining employees don’t have time to sort themselves out as Microsoft has begun offering voluntary layoffs to ZeniMax employees.

According to Bloomberg, manufacturers, quality assurance testers and other employees at Bethesda parent company ZeniMax have voluntarily laid off employees, and other cost-cutting measures are still being implemented.

An email seen by IGN reveals some additional reasons behind the closure. Xbox president Matt Booty said in it that the shutdown was an effort to consolidate resources and “prioritize high-impact games.” […] In order to double down on these franchises and invest in building new ones, we need to look across the industry and identify the opportunities that are best positioned for success. “

In a recording of a town hall meeting obtained by Bloomberg, the studios were spread so thinly that they were like “peanut butter on bread,” and there was a feeling among leaders across the department that they were understaffed. This sentiment was echoed by Jill Braff, head of ZeniMax, who said: “Supporting nine studios around the world with a lean central team and an ever-increasing workload is difficult. I Think we’re about to collapse.”

“We need smaller games that bring us prestige and awards,” Booty said in a confusing comment, The Verge reported. However, saying this a day after Tango Gameworks, the studio behind Hi-Fi Rush, shut down might sound disingenuous to some. Hi-Fi Rush was a commercial and critical success, attracting over 3 million players and winning multiple awards. The game was recently released on PlayStation 5, and Tango Gameworks is promoting a sequel.

Hi-Fi Rush director and Tango Gameworks creative director John Johanas responded to Booty’s statement on X, simply posting a photo of Peppermint in Hi-Fi Rush looking confused.

Game Pass pricing and Call of Duty also spark heated debate

There is further confusion and debate within Microsoft surrounding the future of Xbox Game Pass, especially pricing. The Bloomberg report highlights the stagnation in Game Pass growth since 2021. Sources tell The Verge that Microsoft is considering raising the price of Game Pass Ultimate. There’s also been a heated debate over whether Activision’s Call of Duty will be available on Game Pass – with some worried that doing so would reduce Call of Duty’s profitability.

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