While a recent report indicated that Microsoft might be getting ready for a round of layoffs across its Xbox division, a new report by Tom Warren of The Verge indicates that these layoffs might be accompanied by the closure of a studio. The report doesn’t reveal too many details, however, indicating that the decision is still in its planning stages for now. However, changes to the Xbox Game Studios lineup seem like a major possibility.
Warren’s report comes shortly after Bloomberg’s Jason Schreier reported that the company is planning to undergo major layoffs in July. According to Schreier, this is Xbox CEO Asha Sharma’s attempt at mitigating the revenue losses that the division will be reporting at the end of its fiscal year on June 30th. Along with job cuts, spending across various divisions, including marketing, will also be slashed. Xbox itself hasn’t made any comment about the report at the time of publishing.
News of layoffs follows a recent announcement from Asha Sharma and Matt Booty, who shared the Xbox division’s future plans and celebrated their first 100 days leading the team. In that announcement, they mentioned that the division’s profitability would be down 3 percent compared to the previous year.
We expect to finish the year with an accountability margin of around 3 percent, which is lower than last year. Without including the results from Activision Blizzard King, we’ve invested over $20 billion in our games, platforms, and hardware over the last five years. However, our yearly revenue has decreased by almost half a billion dollars during that same period, and this trend isn’t sustainable.
Looking to the future, Sharma and Booty also spoke about hardware plans going forward. They brought up the fact that component prices have shot up quite drastically over the last few months, with Sharma noting that storage prices were twice as high by the time she became CEO as they were in Fall 2025. She also wrote about how, by the time the company gets ready for the 2027 holiday season, the prices will have been multiplied by 5. This means that for Project Helix, Xbox will need to figure out a new business model.
“We are in a hardware component crisis,” wrote Sharma. “When I joined as CEO in February, the price we paid for console storage components was over 2x as high as we paid last fall. These costs have since doubled again. And as we plan for the 2027 holiday season, we expect another significant increase, taking us over 5x the prices we paid only two years earlier. Memory costs have followed a broadly similar trajectory. While the entire industry is facing a components crisis, we believe we have been impacted more greatly than many of our peers due to the choices we made over the last half decade. We are currently unable to make as many consoles as players want to buy, and we need a new business model and partnerships for hardware as we remain committed to Helix.”
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2026-06-11 18:42