“History is full of companies that mistake longevity for inevitability. We will not be one of them.”<\/p>\n\n\n\n
Coleman meanwhile pointed to a changing customer needs in announcing Microsoft’s company-wide cuts.<\/p>\n\n\n\n
“Companies don’t get to choose whether their industry changes; they only get to choose whether they change with it,” she said.<\/p>\n\n\n\n
She noted that while the company would not replace the lost roles with AI, “what is\u202ftrue is that AI is changing how work gets done”.<\/p>\n\n\n\n
Industry challenges<\/h2>\n\n\n\n
The announcement comes at an already difficult time in the gaming industry, with many studios still reeling from brutal layoffs in recent years.<\/p>\n\n\n\n
In 2024, Xbox culled more than 2,000 staff and shuttered four studios bought prior to its bumper acquisition of Call of Duty maker Activision-Blizzard.<\/p>\n\n\n\n
Little more than a year later, Microsoft said it would cut up to 9,000 jobs<\/a> after setting out plans to double down on its multi-billion-dollar AI spending.<\/p>\n\n\n\n The spiralling costs of hardware have also prompted firms including Microsoft<\/a> to hike the price of years-old consoles and similar consumer gadgets – with many blaming AI data centres for pushing up demand too quickly for supply to catch up.<\/p>\n\n\n\n Sharma said on Monday that while she knew the cuts were “painful”, there was a “reset” needed across Xbox’s entire content portfolio, platform and operations.<\/p>\n\n\n\n Tech analyst Paolo Pescatore told the BBC the changes indeed marked a “major reset” for the company, which has further trials ahead.<\/p>\n\n\n\n “The challenge is not just cutting costs; it is defining what Xbox stands for in a world where games are moving across console, PC, cloud and subscription platforms,” he said.<\/p>\n\n\n\n As part of Xbox’s sweeping changes, Minecraft developer Mojang and Candy Crush developer King will now report directly to Sharma.<\/p>\n\n\n\n Piers Harding-Rolls of Ampere Analysis said this restructuring “underlines Xbox’s vision for its studios and content, which will be more heavily focused on the biggest IP and audiences”.<\/p>\n\n\n\n He said the company had previously bought a plethora of studios to boost offerings on its subscription service Game Pass.<\/p>\n\n\n\n “But the company has now decided that some of these teams and the games they are building would be better suited to sit outside the Xbox organisation,” he said – adding that its decision not close them was “positive news during a difficult time”.<\/p>\n\n\n\n Double Fine and Compulsion will both return to independent management.<\/p>\n\n\n\n![\"Bloomberg](\"https:\/\/ichef.bbci.co.uk\/news\/480\/cpsprodpb\/d483\/live\/7b0ef710-7957-11f1-9988-0351319ba973.jpg.webp\")
<\/figure>\n\n\n\nOffloading gaming studios<\/h2>\n\n\n\n