It has been a turbulent few months for Xbox. After a February leadership shake-up that saw CEO Phil Spencer and Sarah Bond depart, incoming CEO Asha Sharma and Chief Content Officer Matt Booty moved quickly to overhaul the brand. They abandoned the “This is an Xbox” campaign, adjusted Xbox Game Pass pricing following a 50% hike, and teased new hardware under the codename Project Helix. The company even rebranded to an all-caps XBOX.
The momentum reached a peak with a June 7 summer showcase where fans were gifted translucent green Series X consoles. However, the optimism proved short-lived. By June 10, Bloomberg reported that Sharma had planned a significant wave of layoffs, a move confirmed shortly after in an Xbox Wire post detailing a 100-day “Xbox reset” driven by rising hardware costs and poor revenue.
Studios Facing Potential Closure
The restructuring has placed several high-profile studios at risk. According to reports from mid-June, Xbox is weighing the closure of:
- Compulsion Games: Developers of South of Midnight.
- Double Fine: Known for the Psychonauts series, Keeper, and Kiln.
- Ninja Theory: Creators of the Hellblade series, who recently showcased a trailer for their new game, Senua.
On June 30, reports surfaced that Microsoft is also considering shutting down Arkane Studios. This would effectively cancel or derail the upcoming Marvel’s Blade, which has allegedly seen its internal ship date pushed from late 2026 to 2027. More recently, on July 29, it was reported that Undead Labs, the team behind State of Decay 3, is also under threat of closure.
Game Pass and Franchise Strategy
The impact of the reset extends to the company's subscription service. Consultant Fernando Rizo stated on The Business of Video Games podcast that Xbox has suspended negotiations for new third-party additions to Game Pass. Developers currently in talks reportedly had their deals put on pause as the company reassesses its subscription operations.
Internally, the focus is shifting toward established heavy hitters. Leadership intends to prioritize new entries in major franchises, specifically Fallout and The Elder Scrolls. While Bethesda has not shared footage of The Elder Scrolls 6 since its 2018 announcement and has yet to formally announce a new Fallout title despite the success of the 2024 television adaptation, these franchises are now at the center of the company's future roadmap.