Xbox Signals ‘Reset’ and Layoffs, Closes ‘Hellblade’ Studio Ninja Theory Microsoft’s Xbox division is entering a turbulent transition, moving from years of heavy investment to a self-described “reset” that is already costing studios and jobs.

The shift began to surface publicly on June 10, when reports detailed internal preparations for significant layoffs at Xbox, potentially affecting around 1,000 staff and even entire studios. That same day, Xbox CEO Asha Sharma and chief content officer Matt Booty sent a memo warning employees of an “Xbox reset” over the next 100 days, citing mounting financial and hardware pressures.

In the memo, leadership acknowledged that, excluding Activision Blizzard King, Xbox had spent more than $20 billion over five years on content, platform, and hardware subsidies, while annual revenue still declined by nearly $500 million. They also warned of a “hardware component crisis,” with costs for 2027 holiday hardware projected at more than five times what Xbox was paying just two years earlier, and memory costs on a similar trajectory. Executives argued that “this cannot continue” and said Xbox needed a “new business model and partnerships for hardware” as it rebuilt its platform infrastructure to compete in console, PC, mobile, and streaming markets.

By June 15, the human impact of this reset had become clear. Xbox is closing down Ninja Theory, the UK studio behind the Hellblade series, according to reporting based on staff being informed in a Monday call. Employees are reportedly hoping a buyer can be found for the studio. The closure comes as several Xbox teams, including Compulsion Games and Double Fine, are in active negotiations about spinning off from Microsoft, reflecting a broader downsizing of the internal studio system.

The timing is especially stark for fans: just over a week earlier, at the Xbox Games Showcase, Microsoft revealed a new Hellblade game, Senua, whose future is now uncertain. While Sharma has also moved to secure marquee exclusives like Gears of War: E-Day and Clockwork Revolution, the restructuring leaves Xbox balancing a leaner business model against the risk of losing creative talent and beloved franchises.

Continue reading https://foxvector.com/stories/019ed0cb-e5bc-13de-7293-1272544d5815