We’ve all read the rumours regarding Xbox’s incoming exodus, but things sound worse than initially imagined behind-the-scenes.
In a revelatory recap video, Bloomberg journalist Jason Schreier says there are more studios than just Ninja Theory, Double Fine, and Compulsion Games in trouble. All three developers, who’ve made multiple PS5 games in the past, are in negotiations to save their futures.
But according to the reporter, several more are on the chopping block, while the entire organisation will be rocked by “significant” layoffs at large.
Negotiations with the affected parties include the possibility of spinning off studios as independent entities, or finding new buyers. But according to Schreier, a “bloodbath” is coming over the next two weeks.
He explained:
“What’s happening is going to be pretty brutal, the word I’ve heard is ‘bloodbath’ among people I’ve talked to who know what’s happening. It’s going to be bad. Those studios I mentioned are just the beginning, there’s going to be more. There are a lot of negotiations going on right now.”
Microsoft’s financial year ends on 30th June, and we may not get a full picture of what’s happening until then.
Schreier’s video, which I recommend watching in full above, digs deeply into many of the errors which have led Xbox to this point. Among them, a failure to significantly grow Game Pass while acquiring developers on a massive scale appears to have hit the organisation hard.
He points out that while the $69 billion buyout of Activision Blizzard was an eye-watering sum alone, it also meant the division added thousands of employees overnight – all at a time when Redmond was finding its head turned by AI, placing massive financial pressures on the division.
Schreier uses the word “mess” a lot, and from the outside looking in, that certainly appears to be the case.
With many of the developers under Xbox’s umbrella making games for the PS5, this exodus is poised to hit PlayStation just as hard, with many projects and beloved studios likely to get axed.
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