It’s been a crazy few days for Xbox, a major publisher of PS5 games.
It announced several new titles for Sony’s system on Sunday, including State of Decay 3 and Senua.
The company also reiterated its commitment to releasing games only on its consoles, and stated it hopes to increase these exclusive releases if the business performs well.
Bloomberg reports that significant layoffs are expected soon, potentially affecting thousands of employees. The Verge adds that one or more game development studios might be closed as part of these cuts.
According to journalist Jason Schreier, Microsoft is planning layoffs soon after it releases its financial results on June 30th. The company is also likely to cut budgets in areas like marketing.
A recent internal memo, now published on the Xbox Wire, reveals that Xbox operates with a 3% profit margin. This means that after covering all costs, the division keeps only 3% of its revenue.
Sharma paints a grim picture of the situation:
Over the last five years, we’ve invested more than $20 billion in our games, online services, and hardware, not including Activision Blizzard King. Despite this, our yearly revenue has decreased by almost half a billion dollars, and this trend needs to change.
It’s surprising to see Xbox publicly acknowledge such a significant financial situation. Spending over $20 billion and then experiencing a half-billion dollar drop in annual revenue is a huge setback, and it likely contributes to the recent changes in leadership with Phil Spencer and Sarah Bond leaving the company.
Bloomberg reports that a new Gears of War game, called E-Day, was being developed for the PlayStation 5, and stores were preparing to start taking pre-orders this Sunday following the Xbox Showcase. According to journalist Jeff Schreier, many people working at Xbox were surprised when the game’s release on PlayStation was cancelled.
According to the report, Microsoft considered showcasing a trailer for Halo: Combat Evolved at Sony’s State of Play event last week, but ultimately decided against it, which may have strained the relationship between the two companies.
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2026-06-11 01:36