Microsoft Xbox Plans Further Cuts Following Bethesda Studios Shutdown

The sudden closure of several video game studios within Microsoft’s Xbox division is part of an ongoing cost-cutting initiative that appears to be far from over.

This week, Xbox initiated voluntary severance agreements for producers, quality assurance testers, and other staff at ZeniMax Media, which Microsoft acquired in 2020 for $7.5 billion (roughly Rs. 6,26,28 crore), according to sources familiar with the company’s plans. The move indicates that further reductions are imminent within the Xbox organization.

Among the affected studios are notable names such as Tango Gameworks and Arkane Austin, both of which have contributed significantly to the gaming landscape. The closures mark a significant shift in Microsoft’s strategy, potentially impacting future game development and releases.

Employees across the Xbox division have been informed that additional cuts are forthcoming, creating an atmosphere of uncertainty. The extent of these reductions and their impact on ongoing projects and future plans remain unclear.

A spokesperson for Xbox declined to comment on the situation, leaving many questions unanswered about the company’s long-term vision and the fate of its remaining studios.As the gaming industry watches closely, the ramifications of these decisions will likely unfold in the coming months, influencing Microsoft’s competitive stance and the broader market dynamics.

The sudden closure of several video-game studios at Microsoft’s Xbox division was the result of a widespread cost-cutting initiative that still isn’t finished.This week, Xbox began offering voluntary severance agreements to producers, quality assurance testers and other staff at ZeniMax, which it purchased in 2020 for $7.5 billion (roughly Rs. 6,26,28 crore), according to people familiar with the company’s plans. Others across the Xbox organization have been told that more cuts are on the way.

With console revenue down, the company recently began releasing some of its games on competing platforms. In a March interview with the gaming site Polygon, Spencer said that “the thing that has me most concerned for the industry is the lack of growth.”