Xbox announces 'reset' with layoffs, studio closures planned

Microsoft's Xbox division is preparing for significant changes, including widespread layoffs and the potential closure of multiple game studios. The company's new CEO, Asha Sharma, and newly promoted chief content officer, Matt Booty, informed staff of an "Xbox reset" in an internal memo, citing substantial business challenges.

These challenges include "accountability margins," higher component costs for consoles due to shortages, and an "over extended" studio system. Reports indicate that layoffs and potential studio closures are slated for announcement in early July.

The restructuring efforts may also lead to the cancellation of games like "Blade" and raise questions about the future of studios such as Arkane. Xbox has previously announced price increases for its consoles.

In addition to potential studio closures, such as that of "Hellblade" developer Ninja Theory, this "reset" signals a broader strategy shift for Xbox as it navigates the competitive gaming market and aims to streamline its operations.