On July 6th, Xbox CEO Asha Sharma announced in an email to her employees that the company would be undergoing a “significant restructure”, a reset. She stated that Xbox’s current business model was not “healthy”, what they were doing was not working. For years, they prioritized Game Pass, focused less on console exclusives, and added more studios under the Xbox umbrella. This was not sustainable; according to Asha, it was weakening Xbox at the core. For the sake of Xbox’s future, it had to be reset.
These are the immediate effects of the reset.
Approximately 3,200 Xbox employees will be laid off, which is about 20% of the organization. 1,600 of those employees would be cut that day, with the rest losing their positions over the next twelve months.
Four game studios, previously bought by Xbox, will be sold off. Compulsion Games, makers of We Happy Few and South of Midnight, will become independent and retain their IP. Double Fine Productions, makers of the Costume Quest and Psychonauts series as well as the recently released Kiln, will also return to being independent and will retain their IP. Ninja Theory will be sold in order to continue creating the Senua series among other games. Undead Labs will also be sold, with State of Decay 3 still slated to be released.
Arkane Studios was also rumored to be sold off or shutting down, but Asha disclosed that they will begin “required consultation” to review options regarding their management.
In addition, Xbox will also streamline their tools and code base, reduce layers of management amongst their organization, and establish a Chief Operating Officer. Mojang and King, two of the company’s most profitable studios, will now report directly to Asha.
Asha’s email is, by all accounts, incredibly transparent. She points directly at where the company went wrong, what they are doing to fix it, and how those fixes will impact the affected parties. Does this soften the blow for the thousands of people losing jobs and the companies losing valuable assets? Certainly not.
The shockwaves from the Great Xbox Reset will continue to be felt in the upcoming months. With these four companies losing Xbox’s well of resources, it’s likely they will have to restructure and lay off more employees. This could also lead to them cancelling or delaying games currently in production.
This decision by Xbox, as well as Sony’s decision to discontinue physical media (which we covered in this article) points to a pervasive, deep-rooted issue with the gaming industry, which is that it considers itself an industry.
Time and time again, these massive video game companies choose profits over people. Predatory microtransactions plague single-player, story-driven games like Assassin’s Creed and Fallout, live service games oversaturate the market despite most of them struggling to last past a year, and ten-year old video game consoles still cost a month’s worth of groceries. Video game companies prioritize short-term gain, chasing trends, and buying out competition, and have forgotten to prioritize what really matters: video games.
Video games are pastimes. They form the halcyon days of crowding arcades as someone tried beating Dragon’s Lair, shouting excitedly for your cousin to come to your room because you finally beat Demix’s boss fight in Kingdom Hearts 2, forming a band in Fortnite with two Sabrina Carpenters, Lebron James, and a banana.
Video games create community. They connect people around the globe and create lifelong relationships that might never happen without video games being the middleman.
Video games are art. Storytellers, musicians, and visual artists use this medium to express emotions and tell stories in new, creative ways. The Stanley Parable utilizes the ‘choose your own adventure’ style of gaming to create an absurdist commentary on the concept of free will. Clair Obscur: Expedition 33 is a poignant tale of grief told explicitly through the story, and implicitly through the environment and music. Cuphead is a work of art in itself, with every frame hand-drawn and inked on paper before being programmed into the game.
Asha’s announcement is the epitome of what is wrong with modern gaming. It is industrial and commercial, when it should be enjoyable and interpersonal. At the end of her email, Asha did express hope for a “bigger” future for Xbox, more creative and global. However, as we’ve seen from this exact company, bigger doesn’t necessarily mean better.
Jhuvin P is a new writer for CBC/DSR. He has previous experience as a ghostwriter, has published several short stories, and is perpetually working on a novel. In addition to writing, he is also a comedian based out of Colorado Springs. He posts clips of his stand-up along with his other goofy antics on TikTok and Instagram.