Resetting Xbox

https://news.xbox.com/en-us/2026/07/06/resetting-xbox/

by dijksterhuis • 16 days ago

737 909 16 days ago

news.xbox.com

ChrisArchitect• 16 days ago

Microsoft cuts 4,800 Jobs, Half from Xbox division

https://news.ycombinator.com/item?id=48804401

clonedhuman• 16 days ago

Continuing the long trend of major tech companies making everything they touch worse.

alashow• 16 days ago

Isn't this their attempt to fix it though?

rireads• 16 days ago

No? They're fixing profits at best

ChocolateGod2• 16 days ago

I think some of these game studios got so content with Microsoft constantly paying that they forgot to make games that would actually sell.

South of Midnight took 7 years to make and cost $100 million to make... yet sold hardly any copies and I'm not even sure who they were trying to make it for.

Meanwhile you have studios like Sandfall and Warhorse pumping out games on a fraction of the budget that ship millions (and imho, make better games).

WorldMaker15• 16 days ago

Millions of people played South of Midnight even if sales didn't reflect it. Xbox Game Pass has done a lot to make Xbox sales figures hard to compare.

ChocolateGod2• 16 days ago

How many people would have played if it wasn't on Game Pass though? I doubt many.

Expedition 33 was on game pass and still sold 8 million copies.

darkhorse13• 16 days ago

I find that extremely hard to believe given that South of Midnight peaked on Steam with only 1.5k players.

Let's be honest here.

c-hendricks• 16 days ago

Compulsion Games was also a strange acquisition / team to decide to put $100M + 7 years of trust into. They had two games by that point, neither with amazing reviews.

saghm6• 16 days ago

I think some of these game studios got so content with Microsoft constantly paying that they forgot to make games that would actually sell.

I mean, if you're assuming that Microsoft had a fully hands-off approach to managing these companies after buying them, then sure. It's not clear to me that you can make a compelling claim about whether the issues were from the bottom or the top just by looking at the final outputs.

WorldMaker15• 16 days ago

Plus there's plenty of evidence that Microsoft hasn't been hands off across that time period. At the very least we've seen them cancel a Rare game and layoff a bunch of Rare staff because of it, The Initiative shut down for not meeting game development goals, 343 Industries stripped apart for low results versus expectations with Halo Infinite and the "new" Halo Studios is basically just a shell and an outsourcing venture in direct line with ActiVision's old Call of Duty tactics.

kevinh• 16 days ago

There's no sourcing for that South of Midnight number. You should treat it as fictional.

pandaman5• 16 days ago

Judging by the credits [1] it indeed looks very conservative.

1. https://www.mobygames.com/game/240054/south-of-midnight/cred...

1970-01-012• 16 days ago

They will just continue smash thru exactly what is killing them because they do not know how to reset. More micro transactions, Halo 14-39, games launching before they're ready, price increases, etc. All of that looks good on paper, so they will take no action against. The XBOX is hitting icebergs, and instead of slowing down, they will just call for more speed.

WorldMaker15• 16 days ago

Microsoft laid off most of its Halo talent in a previous lay off cycle, stripping 343 Industries of most of its staff and rebooting it as Halo Studios as a shell to mostly outsource development to other companies in the way that Call of Duty was built on the game development equivalent of sweat shops. They've already shown that they don't have the guts to make Halo 14-39, they seem to be only doing yet another remake of Halos 1-3 and maybe Reach, this time in Unreal and with "AI" to help "upscale" everything. Just four Halo games endlessly remade until people forget why they were ever originally popular.

blanched2• 16 days ago

What is Halo 14-39? Google wasn’t helpful for me.

nonethewiser4• 16 days ago

They will just continue smash thru exactly what is killing them

Well, not exactly. Maybe partially, but definitely not entirely. They got a shit return on a lot of money they spent which drove down margins now they are cutting that. They lost 64 cents per 1 dollar invested so they are investing less.

tangenter• 16 days ago

Game Pass has caused a lot of direct sales losses to game developers in favor of Microsoft trying to find a Netflix-like cash cow for itself. The numbers never added up, but it is not a surprise everyone nodded and went along with it. I wonder what the career repercussions would be for speaking up - but it doesn’t matter because they are getting fired anyway.

Call of Duty alone lost $300 million: https://arstechnica.com/gaming/2026/04/microsofts-game-pass-...

I look forward to the source code leaks.

BadBadJellyBean2• 16 days ago

I was always very skeptical of the $300 million figure. It sounded like the same math that the movie industry used for pirating. If I was subscribed to Game Pass I might have downloaded CoD to see what it's about. That doesn't mean I would have paid full price for it.

joshstrange3• 16 days ago

Last year, Bloomberg reported that Microsoft estimated it had lost $300 million in direct sales of Call of Duty games due to the title’s inclusion in Game Pass, according to an anonymous employee.

Yeah, that's a bullshit number. It's like when people provide piracy counts as lost direct sales, a lot of people will download something for free, those same people won't always pay full price if they can't download it for free.

I downloaded a TON of games from Game Pass, played <1hr, and uninstalled. Without GP I would have just never bought the game.

rightbyte• 16 days ago

Maybe MS paid the publisher full price for your "see what it is about"? Wouldn't be anything but Uber or Moviepass.

philistine11• 15 days ago

Game Pass' finances ignored the one true thing about streaming services: they weren't going after the people buying DVDs, they were going after the people paying for cable.

Cable subscribers did not exist in gaming, and so Game Pass is stuck stealing Xbox's own customers. It just doesn't add up.

dcrazy4• 16 days ago

Any details about the studio spin-outs? The rumors were that Double Fine etc. would be closed, but all we know now is that some of them are being sold to management and others are being sold to other investors. Nothing about any commensurate restructurings.

Centigonal• 16 days ago

It's in the press release.

Compulsion Games and Double Fine Productions will return to management and transition to independent studios with their IP, catalog, and runway for their next games. Ninja Theory and Undead Labs have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3. In France, Arkane’s management is beginning required consultation with its Works Council to review potential strategic options.

dcrazy4• 16 days ago

Yeah, that is what I was referring to about the lack of detail on restructuring. I want to know if people are losing their jobs and/or titles are being cancelled as part of these sales.

jentulman• 16 days ago

I'm hopeful (but maybe not optimistic) that Arkane gets out of this with the ability to do what they're really good at again.

speak_plainly2• 16 days ago

At some point, the games industry decided it wanted to be interactive Hollywood, and the consequences are entirely predictable. Meanwhile, Nintendo just quietly shipped 3.8 million units of Tomodachi Life in two weeks, and 4 million of Pokopia in five. They're making actual games. Sony's obsession with prestige cinematic bloat, like Xbox, has also put them in a slow-motion death spiral that's going to become painfully obvious in a few years.

manytimesaway5• 16 days ago

Things are not that black and white.

Nintendo also shipped Metroid Prime 4, with massive delays and unsatisfied customers, following the same "interactive Hollywood" philosophy which disappointed Metroid fans.

Same thing goes for Star Fox, a remake of a remake of a remake, with poor visual and dialogue choices.

And meanwhile, the same silent push for digital-only, forced upgrades and the like...

speak_plainly2• 16 days ago

What I mean by "interactive Hollywood" is a game with a $200M+ budget that relies entirely on high-fidelity graphics and cinematic stories to differentiate itself, while offering almost zero new gameplay innovation.

Neither of your examples fit that description. Metroid Prime 4 wasn't chasing Hollywood cinematic design; it was a highly targeted attempt by producer Kensuke Tanabe to make a tight, isolated first-person exploration formula resonate (especially in Japan where it has consistently failed). Its goals are mechanical, not cinematic. Meanwhile, Star Fox is a classic arcade rail-shooter remake with modernized cutscenes, not a prestige movie-game. Early sales data shows it's actually working well, too, having just debuted at #1 on the physical charts in Japan and nearly doubling Star Fox Zero's launch week in the UK.

Ultimately, Nintendo operates like a Consumer Packaged Goods company. They treat their library of IPs like a diversified product portfolio rather than betting the farm on individual interactive movies. They use massive, high-margin, mechanics-first games like Tomodachi Life and Pokopia to generate enormous cash reserves. They then use those profits to subsidize legacy IPs like Metroid or Star Fox to keep core fans happy and feed their broader brand ecosystem. Because Nintendo spreads its risk across a wide spectrum of lower-budget games, they can easily absorb a minor product flop. Sony's interactive Hollywood model sinks $300M into a single basket, meaning one bad miss can completely wreck a studio.

saghm6• 16 days ago

Nintendo also shipped Metroid Prime 4, with massive delays and unsatisfied customers, following the same "interactive Hollywood" philosophy which disappointed Metroid fans.

I'm not convinced that Metroid at least really is a great data point for "Nintendo is ruining things in-house". From Wikipedia[1]:

Nintendo announced Metroid Prime 4 with a teaser trailer during the Nintendo Direct presentation at E3 2017, and announced that Retro Studios, who developed the previous main Prime games, would not be involved.[15][16] In February 2018, Eurogamer reported that Prime 4 was being developed by Bandai Namco Studios in Japan and Singapore.
In January 2019, the Nintendo EPD manager Shinya Takahashi announced that development had restarted under Retro with Tanabe remaining as producer. Takahashi said the previous studio had not met Nintendo's standards and that the decision to restart was not taken lightly.[21] Shortly after, Nintendo reevaluated Prime 4 after noticing changing attitudes towards open-world games, but maintained the direction as the development was already taking longer than planned. The team ignored new developments in action and shooting games to prioritize the adventure elements.

There's a perspective where this is almost the exact opposite of the problem being discussed about Microsoft. They chose to let it get developed externally, suffered delays, and by the time they moved it back in-house, the ecosystem had moved from under them. They probably could have chosen to rethink everything and delay it further, but they also arguably could have avoided having to make that call by keeping it in-house and letting the studio who made the previous entries work on it from the start and landing it in time that the original vision still fit what people wanted.

[1] https://en.wikipedia.org/wiki/Metroid_Prime_4:_Beyond#Develo...

butlike5• 16 days ago

I'm curious about the Star Fox comment. Tell me if I got this wrong:

A remake (1) of a remake (2) of a remake (3)

(1) A remake (Switch 2 Starfox, a remake of StarFox 64)

(2) StarFox 64 (A remake of Super Nintendo's StarFox)

(3) ??? I don't know what the 3rd level of remake you mention is, but I'm curious!

wincy3• 16 days ago

I’ll concede that Metroid Prime 4 has been sitting on my shelf.

But Star Fox? Phenomenal. Such a fun game. Luckily I have the pro controller so I could map A to the back paddle or else my poor old tendons couldn’t handle the rapid fire shooting required at the high levels, but I’ve had an absolute BLAST playing the remake.

cyberrock• 16 days ago

I can understand complaints about Metroid but Star Fox fans were probably expecting jack squat from the start of the year. Putting it in the last movie is a pretty strong indicator for more content.

A lot of Nintendo's remakes end up being training exercises for the real deal, such as Metroid 2 remake to Dread. Meanwhile, some of the laid off devs here might have never seen a properly produced title with zero crunch and anomalies. Not every title should be an auteur title, but we have too many auteurs and we want more auteurs.

cush• 16 days ago

There is absolutely nothing wrong with remaking a 30 year old game if it’s done correctly, and Nintendo usually does it right.

piltdownman2• 16 days ago

To some extent - but you can't get away with Hollywood Accounting Practices in the same way.

Also one must consider the likes of Hideo Kojima who can sell ~7 million copies of a new IP that is effectively a cinematic Walking Simulator as an Auteur acrimoniously splitting from the traditional studio system.

Clair Obscur: Expedition 33 also shipped over 5.4 million copies as a AA, in what is also arguably an interactive cinematic on-rails RPG.

theragra3• 16 days ago

Nah, expedition has enough of a game in it. Parry mechanic is pretty addictive, and gameplay is kinda fun. Exploration, too, is strictly gaming aspect, not cinematic.

God of war is plainly movie on rails compared to E33

999900000999• 16 days ago

A walking simulator that has you fighting between multiple dimensions and is one of the best looking games of its generation.

dsfnajlsdfnafn• 16 days ago

acrimoniously splitting from the traditional studio system.

Yeah, he split from the traditional studio system to create... his own traditional studio system.

Kojima is precisely what happens when you stop thinking of games as actual an interactive entertainment format and start thinking of it as a "cinematic experience" instead.

Death Stranding is only a game by the narrowest of margins. What it is is a movie with Kojima's Spotify 'favourites' list as the soundtrack that so happens to have one interactive element or two thrown in there for good measure.

It's pretty telling that all he's done after splitting away from Konami and surrounding himself with his own sycophantic group of developers is Death Stranding. Kojima is the direct result and pretty much the face of a lot that is wrong with the games industry right now.

wincy3• 16 days ago

My kids begged for me to buy Tomodachi Life and Pokemon Pokopia and they’ve been absolute smash hits in the house. Pokemon got me hooked for a month or two until I mostly beat it, and the kids play Tomodachi Life every day and have funny little stories to tell. So many modern games just aren’t fun, it doesn’t matter what the graphics look like if the game is boring.

thih9• 16 days ago

Sandboxes. Minecraft was one. Now it’s getting called a platform, at least in the submitted article. That’s good for engagement and monetization I guess, but sounds way less fun.

bashmelek• 16 days ago

That is encouraging, but my stock portfolio paints a different picture. Nintendo is unfortunately doing terribly this year. I still believe in their core mission, even if some of their litigiousness and anti consumer practices have put me off

sunaookami2• 16 days ago

Nintendo is also a Japanese company and japanese stocks aren't doing great due to their economy and the weak yen. Also, stock price does not correlate with good games or a healthy business.

johnnyanmac17• 16 days ago

Basing an art form on your stock portfolio is a good half of everything wrong with the industry.

And it's not surprising Nintendo isn't doing well in this clown market. They are taking a hit because they resisted pressures from shareholders who wanted them to raise prices on its new system. Nintendo eventually gave in, but with a much smaller price increase and a delayed effect from announcement to implementation (~4 months forewarning). And on top of all that they are not hyping AI to the moon.

And I haven't even gotten to the overall economic climate of Japan yet. Nintendo's stock falls would happen regardless of if they followed the above.

These are good, pro-consumer moves. It shows that more companies need to think past next quarter and resist the whims of people who don't have your company's long term interests in mind. You're the expert here, not them.

flaunf2212• 16 days ago

I'll personally take spirals, ups and downs of the whole industry over Nintendo selling yet another Mario, Zelda and Pokemon for 40 years straight.

johnnyanmac17• 16 days ago

I'm glad Nintendo does a bit of everything. Taking the time to try out new IPs, give older ones a chance to rise, and go truly off in the weeds with series no one else can really do (the Fit series and Labo being some of the biggest examples). It really feels like there's something for you there, no matter what kind of games you like (unless you only play the GTAs/CODs/Maddens of the industry). Even if you're not actually someone who games. My mom loves the Fit games.

dzonga2• 16 days ago

Sony - having cinematic bloat makes sense for them. They've nailed the story driven games such as Last of Us.

however for Xbox they were not really good at story driven games, but good at Live Games such as Halo.

with Live Games - you iterate on game play, maps, skins - live events i.e community building without alienating people by dabbing in social justice.

End of day - these are all marketing problems & lack of capable leadership who knows their core audience.

LunaSea2• 16 days ago

Nintendo survives on a few banger licenses. Innovation left the house a long time ago.

honeycrispy• 16 days ago

I find it really sad that the GameCube and N64 were where they were the most innovative and also happens to be where they floundered the most in sales.

johnnyanmac17• 16 days ago

I don't know how you can say that when some of their most recent well received games include Tomodachi life and Rhythm Heaven. Those aren't the kinds of games made from those maximizing bean counters.

sunaookami2• 16 days ago

Huh? They are trying a lot of things and when they want to establish a new franchise they are often successful, see e.g. Splatoon. Innovation also does not correlate with new IPs.

cgh• 16 days ago

Elden Ring sold 30 million copies. Even Bloodborne, a PS4 exclusive, sold over 9 million copies.

aranelsurion2• 16 days ago

Sony's obsession with prestige cinematic bloat

Sony has been pretty successful with that though, and there was a time where they pushed many fan favourites in the cinematic genre. They aren’t arcadey games like Nintendo ones of course, but something like The Last of Us has its own value and audience. It sells too.

bigyabai• 16 days ago

Sony's had to bet the house on those types of blockbuster, crowd-pleasing experiences. The PS5 has yet to crest the cinematic peaks of the PS4 (PT, Bloodborne, Uncharted, etc), so people are rightfully getting a little worried that this gamble won't pan out. The bestselling PS5 exclusive is currently Ghost of Yōtei, behind eight better-selling crossplatform titles.

Nintendo's exclusives outsell Sony's by a significant margin, and they're usually simpler games that are broadly accessible. They leaned the right lessons from the indie gaming boom, and didn't try to resist it by pumping billions into making the next Overwatch killer or whatever.

KennyBlanken• 16 days ago

I played TLoU and while the story was interesting, the feeling of being steered, forcefully and constantly, was very frustrating.

"Press this button exactly when the game tells you" and "as soon as you cross this exact point, this exact enemy will appear" - that's year-2000-ish (or worse) gaming tech.

The final confrontation was essentially ruined because the designers apparently never thought you'd use a sniper rifle, so you can set off a deafening shot that kills an enemy and the other enemies don't even notice the shot because it apparently happened outside their detection range.

johnnyanmac17• 16 days ago

They have. Which makes this hard skew towards live service all the more baffling. Having your premier studio basically miss the generation trying to make a multiplayer version of one of these games then cancelling it really shows how much they overextended.

And it's not like it had to be Naughty Dog: They had some dozen titles published or in house being prepared (including one that sunk what could have been an amazing remaster/remake studio). And in the end they really had one come out as the dark horse, with one megaflop, and 2-3 stragglers that don't seem long for this world (one of which seems to be taken down the existing, safe life service Sony spent billions on).

Gen 9 will be a huge blemish carried by their very smart acquisitions of Insomniac and Housemarque, with some decent support coming from Santa Monica and Guerilla. But at what cost?

zeratax6• 16 days ago

sony's cinematic games sold well and are well regarded, but when was the last time they released any such game or even just a single player game? when they rerereleased the last of us?

account4213• 15 days ago

If the game industry managed to come even close to the top writing and cinematography from Hollywood then it would already be much better than it is now. Instead the part of Hollywood they are chasing seems to be the big budget wide appeal movies that will be forgotten in a decade.

gunsle• 15 days ago

Yeah, I kind of loathe the cinematic direction Sony and others have taken. Their games aren't really innovative or fun but people lap them up for being B tier movies. It makes no sense to me. They don't bother making Bloodborne anymore, just more open world cinematic slop like Horizon.

athorax• 16 days ago

  It is neither possible nor desirable to own every great independent studio. We have also learned that we are not the best home for every type of studio

This is shockingly self-aware for microsoft

thomastjeffery2• 16 days ago

...more like

We can't afford it, and it's a bad investment anyway

joe_mamba• 16 days ago

> We can't afford it

But they've already spent the money. They spent about 70 billion on activision blizzard. That was and still is an outrageous amount of money that will take fever to break even let alone turn a profit.

saghm6• 16 days ago

Yes, but only because the bar is so low. "We can't commodotize innovation" is not an especially subtle insight, and pretty much everyone other than executives at companies like this understand it without having to spend billions to try it out.

taurath3• 16 days ago

They say that only after they buy up like half of the IP in the entire gaming industry without a plan and it doesn't end up being a fast enough money printer. Activisions back catalog is the result of hundreds of acquisitions and IP purchases.

markus_zhang7• 16 days ago

I have no idea why they didn’t realize that earlier, or if there is any insider dealing involved, from my cynical thoughts.

badsectoracula• 16 days ago

I have no idea why they didn’t realize that earlier

14 layers of management :-P

sinpif• 16 days ago

It also means they must have started with the assumption that they were the best home for every type of studio, which, when you say it out loud, sounds very stupid. Second, how can a studio be "independent" anymore when owned by MS? Doesn't make sense. It's all just corpo speak for "we fucked up but we're still getting paid to fire you".

ActionHank2• 16 days ago

No, no, you're misreading.

This is Microsoft politely saying that not all studios are good enough for them.

And by good enough they mean enough of a money printer.

jm42• 16 days ago

Good read. A studio can be both good and not good enough for Microsoft. They’ve never made a secret of the fact that they are in it for huge numbers. A studio can do well and still make little enough that it’s a management headache for Microsoft.

gehsty2• 16 days ago

Is it possible or desirable to own two competing gaming platforms?

hbn4• 16 days ago

It was pretty rich seeing armchair video game industry analysts act like the new CEO was gonna usher in a new age for Microsoft's gaming division because she got to announce the updated logo and some games that would have obviously been in development long before she became CEO.

Microsoft is never going to figure out gaming. It's more art than engineering and they can barely manage the engineering with all the intervention from marketing and HR in their products.

To me it's mostly unfortunate that this has left PlayStation with no direct competition because they've noticed and leaned into the not-giving-a-shit attitude after they had such a great console generation with the PS4. It's kinda crazy that we're already almost due for a new console generation and there's very little appetite for new consoles after this generation where it feels like it barely got started. And between graphics almost certainly at the point of diminishing returns, and hardware prices like they are right now, I can't imagine there's a market to sell something more capable than current gen consoles. The industry is in a very strange state.

whizzter• 16 days ago

The pandemic and scalpers really destroyed peoples apetite for the "new thing" when this generation came out, and with that boost missing studios saw little point in going exclusive perpetuating the vicious cycle, it's just in the past few years that there's really been exclusives for this generation that didn't also support older consoles.

And even then, already the PS4/XbOne generation added stratification making it more "PC-like" with the XbOne-X having heftier hardware (not to mention it being PC-like compared to PS1/PS2/PS3/Xbox360), that then continued with the Xbox-series-X and Xbox-series-S.

Consoles aren't specialized hardware for "magic experiences" and everyone knows this, it's just another "device" that happens to be connected to a TV with a controller where people are gatekeeping software availability.

maples37• 16 days ago

Microsoft also didn't do themselves any favor with that naming scheme. In the current generation (I think?), you have: - Xbox X - Xbox S - Xbox Series X - Xbox Series S

Compared to: - PlayStation 5 - PlayStation 5 Pro

or: - Nintendo Switch - Nintendo Switch OLED - Nintendo Switch Lite

Anyone who's literate in English (and knows that OLED means "nicer screen") can immediately rank the PlayStations and Switches into "good, better, best". But with the Xbox, how is anyone supposed to know which one is which? Is the Series version better or worse? Is it a whole new generation, with whatever backwards-compatability implications that a new generation brings? I need a chart and I probably still won't be able to tell you if you ask me in a month.

Cthulhu_7• 16 days ago

Consoles aren't specialized hardware for "magic experiences" and everyone knows this, it's just another "device" that happens to be connected to a TV with a controller where people are gatekeeping software availability.

Arguably; Sony and Microsoft have both played it safe for a long time, with their consoles mostly being "just for video games", but it wasn't always like this. Current-gen has VR additions, but the previous generations had things like Kinect, the PS camera addon, things like that. But they seem to have given up on fun things like that, they were innovative but probably not a sweeping commercial success like idk, subscription services.

Nintendo still makes their stuff unique though. The Switch is great, portable, detachable controllers for multiplayer and wiimote-like interaction, etc.

MisterTea• 16 days ago

And between graphics almost certainly at the point of diminishing returns, and hardware prices like they are right now, I can't imagine there's a market to sell something more capable than current gen consoles.

I haven't bought a console since the Xbox360 and Wii. But I have a friend who still games pretty heavily and is low income. He can not afford the latest PS5 and is still on a PS4. We were talking the other day and he said "I love consoles because they are simpler and cheaper than a PC but now I can't afford either. The graphics aren't getting much better so what am I paying for? What happened to $400-$500 consoles? Remember when consoles were 200-300?" Of course those last few prices were 90/00's but I agree, the cost of a new console is quite insane for not much gain.

WorldMaker15• 16 days ago

$200 in 1985 (NES launch price/date), adjusted for inflation is just shy of $600 in 2026. RAM and GPU prices are really hurting the consoles right now, but compared to inflation benchmarks up until about 2020 they were considerably below inflation.

biggestfan• 16 days ago

Of course those last few prices were 90/00's

Two years ago, you could get an XBOX/Switch for 300, or a PS/Steam Deck for 400. Granted, the PS and XBOX were digital only. But now the cheapest XBOX is 500, the Switch 2 will soon also be 500, the PS5 starts at 600, and the Steam Deck is 789. Things have been going up slowly, but the last year has been absolutely killer.

ErneX7• 16 days ago

I read that when they designed the Xbox Series S and X they knew it was going to be difficult to lower prices down the road because wafer costs were increasing every year. Which is why they launched with 2 models from the get go, one cheaper than the other. And even so they were losing between 100 and 200 dollars per console.

Now things are even worse with the RAM and SSD components crisis. The Series S has now the price of the Series X when it launched.

taybin• 16 days ago

I'm in software and I do alright, but I'm still on a PS4 too. Just can't justify the upgrade when there's still so many great old games available. Maybe when the next Horizon Zero Dawn comes out, I'll be forced to upgrade, but I'm taking my time about it.

tracker16• 16 days ago

To me, the graphics abilities have been there for a decade... what we need are better games and gameplay. More fun games without gotcha, pay to win, loot box efforts. Too much effort is going for dazzling graphics at the expense of overall gameplay. How many people are still playing CoD, WoW and so many other games from over a decade ago? How many refreshes of Final Fantasy have we seen?

The graphics can only carry you so far. There's indy adventure games with SNES level graphics that have millions of daily users.

wincy3• 16 days ago

This is where Nintendo is at. It’s hilarious how much fun me and my kids are having playing games like Animal Crossing, Super Smash Bros, Mario Party, Pokemon Pokopia, and the surprise smash hit has been Tomodachi Life: Living the Dream. My kids make all the neighbors and have them get married and laugh about it and it’s just such a goofy concept. The graphics are good enough that you no longer notice there’s graphics, just the art.

Switch 2 is a fantastic console with an astonishingly fun first party library, and Nintendo just over there doing their own thing like they’ve always done.

z3phyr• 16 days ago

Also dazzling graphics has been mostly visual instead of experiential, that is, with the advances in GPU capabilities, we do get beautiful effects, but the intractability with the said infra is seems to be stagnant (and in some cases regressed)

The way things interact in the game world peaked around mid 2000s, just in time when CPUs started to not follow moors law.

As of now, interactive environments are still almost as good as half life 2 from 2004. Gaming is all about the feel of it, which also includes the visual component.

freedomben2• 16 days ago

Too much effort is going for dazzling graphics at the expense of overall gameplay.

Yes, 100%. I love good graphics, but game play is the most important thing. If you don't have good gameplay the graphics mean nothing. A game with great game play and great graphics is something to behold.

I recently finished Split Fiction and they really nailed it. I hope studios take notice!

throwaway894345• 16 days ago

I’ve been saying this for 20 years. I care much less if the game is visually stunning than if the core game is fun. It could be a paintball themed FPS for all I care as long as the core mechanics are fun and the story is engaging, I care very little. Also, good graphics don’t have to be hardware intensive—not everything needs to seem photorealistic.

muyuu• 16 days ago

you don't get the insane profit margins they want without those predatory practices, not in this industry and if you do it's a one-off and not something you can do every fiscal year

mvdtnz9• 16 days ago

Too much effort is going for dazzling graphics

Could have fooled me. I haven't seen a meaningful improvement in game graphics for at least a decade.

monkpit• 16 days ago

gotcha

Gacha?

https://en.wikipedia.org/wiki/Gacha_game

Cthulhu_7• 16 days ago

It's... odd that while Steam is the biggest PC gaming platform and the biggest platform for new, unique, interesting games ever, Microsoft isn't investing more in the people developing games for it. Microsoft can use it to filter out the slop, make offers to the best games, offer help with porting to consoles, and (probably most importantly) offer to put them into the xbox live program, because the xbox live subscription is xbox's biggest source of recurring revenue.

Access to Steam's library for a fixed monthly price would be huge. Actually I'm surprised Steam/Valve isn't offering that yet, it'd be huge, and for their new consoles it would be a perfect fit.

account4213• 15 days ago

Cutting edge graphics can even be actively detrimental to a game by lowering performance and limiting game design.

soulofmischief2• 15 days ago

I do still play a good bit of Black Ops II Zombies... which came out in 2012. Treyarch took notice, and the last CoD was a crappy attempt to cash in on the fact that the last good CoD game was over a decade ago.

A few great games I've played in the last 8 years, about the span of a generation, a mix of AAA and indie:

- Red Dead Redemption 2 https://store.steampowered.com/app/1174180/Red_Dead_Redempti...

- Cyberpunk 2077 https://www.gog.com/en/game/cyberpunk_2077

- Supraworld https://store.steampowered.com/app/1869290/Supraworld/

- Outer Wilds https://store.steampowered.com/app/753640/Outer_Wilds/

- Mini the Hollower https://www.gog.com/en/game/mina_the_hollower

- Pipistrello and the Cursed Yoyo https://store.steampowered.com/app/2870350/Pipistrello_and_t...

- Shadows over Loathing https://store.steampowered.com/app/1939160/Shadows_Over_Loat...

- Animal Well https://store.steampowered.com/app/813230/ANIMAL_WELL/

- Dwarf Fortress https://store.steampowered.com/app/975370/Dwarf_Fortress/

- EMUUROM https://store.steampowered.com/app/1634360/EMUUROM/

- Dispatch https://store.steampowered.com/app/2592160/Dispatch/

- MOUSE: P.I. For Hire https://store.steampowered.com/app/2416450/MOUSE_PI_For_Hire...

- Split Fiction https://store.steampowered.com/app/2001120/Split_Fiction/

- Final Fantasy Tactics - The Ivalice Chronicles https://store.steampowered.com/app/1004640/FINAL_FANTASY_TAC...

If you want to see what modern AAA gaming should be and haven't already played it, I highly recommend Cyberpunk 2077. It's not perfect, mostly due to time constraints, but it excels in most categories, and it looks and plays great. No microtransactions, no DRM and the one DLC is very good. It's on sale for $18 on GOG. No DRM should be enough reason to signal to the market to produce more games like this. Also, the developer owns the GOG storefront and so 100% of your profits go directly to them.

I also cannot recommend Supraworld enough to anyone who likes classic 3D platforming and puzzle games such as Portal or Antichamber. Supraworld has ruined other platformers for me. The developer, David Munich, is a puzzle maestro who has already put out other successful games such as notpron https://notpron.com/ and Supraland. His philosophy for puzzle design is going to influence the genre for decades to come.

And of course, if you haven't played Red Dead Redemption 2 already, it's a bonafide masterpiece, deserving of 10/10. The game is an absolute behemoth in terms of development/marketing costs and profit, and is just a sight to behold. I know it borders on last-gen because it came out in 2018, but the ninth-generation of consoles was where it found its home, since the eight generation could barely handle it. Dan Houser left Rockstar after finishing this game due to being a 50-year-old man completely exhausted from inflated development cycles, so this might be the best game Rockstar will ever make.

Of course I could go on to recommend dozens of other memorable recent indie games, but I definitely think AAA has mostly stagnated. Cyberpunk 2077 initially released 6 years ago. Red Dead Redemption 2, the modern gold standard, released 8 years ago. I have heard great things about Clair Obscur, but I haven't given it a chance. There are some worthwhile remasters, like the Shadowman remaster and upcoming Thief Gold remaster done by the Kick brothers at Nightdive Studios, or the recent Final Fantasy Tactics remaster.

Game production could stop today and I'd probably be good for the rest of my life. There's still such a vast back catalogue even after playing all of the classics. With development cycles for groundbreaking AAA titles closing in on a decade and production costs surpassing half a billion, I get a sense that a mature ecosystem of AI-augmented tooling is what might end up bringing some sanity back to this business.

I'll also point out that in the 80s, AAA video games have been $40-70 since the 80's. If the price of games had gone up with inflation, we'd be paying $100-150 per AAA game, there would be more money in the industry and ideally better salaries and working conditions across the board. As consumers, we need to stop and analyze the perverse incentives driving this market and figure out how to have better dialogue with developers so that we can come to an agreement on more realistic prices but less anti-consumer bullshit.

llm_nerd• 16 days ago

When she was announced it was broadly assumed that she was being brought in to kill the division.

But then she did some minor, pandering actions and suddenly everyone was "oh boy! A new era of xbox!" Only it was all a ruse to ensure people didn't jump ship too quickly and make the bleeding too heavy. They want people to keep pumping money into a platform heading to the graveyard.

sometimes_all• 16 days ago

Only it was all a ruse to ensure people didn't jump ship too quickly and make the bleeding too heavy

You go when we tell you to go! Not before!

0x4572• 16 days ago

Don't forget gifting of translucent Xbox.

torginus• 16 days ago

I had the sinking feeling from the start, that a total stranger was brought in to do a butcher's job.

pibaker2• 16 days ago

Microsoft is never going to figure out gaming. It's more art than engineering and they can barely manage the engineering with all the intervention from marketing and HR in their products.

Gaming is like cuisine. Can it be art? Sure. But most people will never visit a Michelin starred restaurant in their whole lives. They go to McDonald's and their local equivalent. Mainstream games have been like McDonald's for a long time. It's not about being a thought provoking artistic expression. It's about engineering a predictable entertainment experience that the average Joe can enjoy while being half checked out after a day of work the same way he enjoys a Budweiser or a Big Mac.

Of course, no critic will ever be caught praising McDonald's for its culinary artistry. But it doesn't matter. People will keep spending money on it, and the business continues. Same deal for gaming.

ColdStream6• 16 days ago

Thus the yearly Call of duty titles.

doctorpangloss• 15 days ago

i don't know, it's hard to generalize about audiences this big.

pikseladam• 16 days ago

she had already choosen the coo as a scapegoat :)

ramijames• 16 days ago

It's not just appetite. The market is crazy right now and people don't have money to drop $600-800 on a new console.

msftgreed3• 16 days ago

Microsoft is never going to figure out gaming.

That's the thing -- for a while they had figured out gaming. The xbox and 360 were solid consoles with lots of great internal and external games. Halo was incredible.

Then the company did the thing that Amazon did, Blizzard is doing, and all the big tech companies do -- they thought their big war chest meant they should make bigger games. Budgets ballooned, game timelines extended. Now they are stuck with games and studios with 10 year dev cycles trying to create the biggest, the most incredible, the most expensive games.

There's SO many devs out there making incredible games for fractions of the cost. It's a shame Microsoft (and others) keep thinking that reaching for bigger means better outcomes. No one wants "the game only Microsoft can make", everyone wants another great Zelda. Or Gears of War. Or Satisfactory. Or Mina the Hollower. Or UFO 50. Or Animal Well.

Hell, people want a game about shelving 3000 books in an Arcane library. Let games be smaller, more exploratory, more creative experiences. Let your studios get weird with it. Let them explore spaces and take risks. Stop sinking tens of billions into games. Start sinking tens of millions into them.

caconym_• 16 days ago

I think another big issue they have is their insistence that most (ideally all?) of the people working on their games should be temporary employees. When your most valuable studios get out of the business of providing secure and sustainable employment, you lose the ability to build institutional expertise. When you treat your creatives like a commodity, you'll get generic assets and writing regardless of budget. When you focus on everything but the games themselves, it shouldn't come as a surprise that your big franchises degenerate into undifferentiated revenuemaxxing slop and unique new projects that might get people excited die on the vine.

Overall I think western AAA game development is dead. The executive class killed it with their greed and incompetence, and as long as these huge corporations are allowed to keep buying smaller studios/publishers and shutting them down a few years later, nothing is going to change.

operation_moose2• 16 days ago

AKA "we just passed the 8th anniversary of the Elder Scrolls 6 announcement trailer"

Also worth noting Skyrim first came out on the 360; an honor shared by GTA5, but at least they have an imminent release.

pibaker2• 16 days ago

No one wants "the game only Microsoft can make", everyone wants another great Zelda. Or Gears of War. Or Satisfactory. Or Mina the Hollower. Or UFO 50. Or Animal Well.

This IMO is a display of what is wrong with a lot of online gaming discourse — it is dominated by people who spend more time playing and critiquing games than 99% of the population and has a tendency to overemphasize indie darlings and ignore the massive commercial success of mainstream titles. Forza 6 released in May and is wildly popular among normie gamers. So is your yearly call of duty instalment which is now a Microsoft property. Go ask people coming out of a Walmart if they know what is Animal Well and they will probably think you are soliciting donations for a local animal shelter.

I'm not saying you can't criticize mainstream AAA games. I get they are boring, formulaic and increasingly rely on predatory business models. But if you want to talk about business and what kind of games companies should invest into, you can't just ignore the massive commercial success AAA already enjoys or the fact that most indie games flop anyway.

And yes, people will play games that can only be made in an established franchise by a major company. Forza is able to license real world car models from companies like Porsche because it is a well known and safe brand backed by a big company. Not to mention games like Microsoft flight simulator or GTA.

ColdStream6• 16 days ago

It was once the Wii with anemic hardware and waggle ended up outselling the 360 that MS changed. They went from pushing forwards to chasing trends.

I agree, they need to be focusing on smaller projects that take risks. Maximum 24 month dev times but with modern tooling could do some special things. Maybe if after 6-12 months they see something that is gold, they can give it more resources but that would be on a case by case basis.

djhworld• 16 days ago

Microsoft is never going to figure out gaming.

I feel they kind of did in the Xbox 360 era. Maybe it was just down to luck because Sony dropped the ball in the early years of the PS3 and Microsoft got the jump on them a bit.

The 360 was amazing looking back on it, Xbox Live, trying out innovative ideas like 1vs100, attracting lots of publishers to the platform for games, Xbox Summer of Arcade.

I was a big OG Xbox fan but even then I knew deep down it was never going to catch up to Sony with the PS2. Then the 360 came out and it was brilliant.

Sadly they threw it all away with the Xbox One and while recovered some credibility somewhat with the Series X, it's definitely not the same as those golden years of the 360.

Maybe the 360 was an aberration in Microsoft's history and the years since then have just been a regression

dannyw7• 15 days ago

Xbox Live Arcade, and the accessibility it bought for smaller studios and indie developers was massive.

You could say it's just a response to Steam and the PC gaming indie scene, sure, but the 360 era is definitely one where Microsoft hit all their strides. Then they ruined it with the Xbox One.

jasondigitized• 16 days ago

More capable than current gen consoles is going to be local AI. Calling it now. It won't be as much about graphics as it is about selling some notion of human like NPCs and smarter enemies and some other use case they can sell to the masses.

andrekandre• 16 days ago

  > human like NPCs and smarter enemies and some other use case they can sell to the masses.

npc ai has been capable of being much more realistic for a long time, and smarter enemies as well; if enemies in a game are too smart it stops being fun which is to say enemy ai being too stupid or not realistic enough is a non-problem and current-gen hardware is in no way a blocker to such aims anyway

naikrovek• 16 days ago

It's more art than engineering and they can barely manage the engineering with all the intervention from marketing and HR in their products.

truth. far too many MBAs in that company. "Let's monetize Solitaire!!!!" Only an idiot would even come up with that idea, never mind follow through on it.

websap• 16 days ago

Microsoft is not an engineering company any more. Just look at their products. They placed ads in the start menu and file explorer. Azure is one of the worst clouds when it comes to features and reliability.

Microsoft is a dying company, and they are trying not to end up like IBM, but their fate is inevitable.

danpalmer• 16 days ago

It's more art than engineering

I'd say games can be either art or hype. Call of Duty is not art, really, it's hype. In the same way that no one thinks Marvel films are moving film forward, but they are hugely popular. GTA is somewhere in the middle, being mostly hype driven, but based on solid "art" in good gameplay. Indie games tend to be art over hype.

Microsoft can't do the art because it's too big, too safe, and it can't do the hype because it's not cool.

Cthulhu_7• 16 days ago

It can be art even if you don't consider it artistic. CoD is an example of military art. Marvel is American blockbuster art translating American comic book art to the screen. They are their own kind of artistic expression and achievement, even if you personally don't consider them art.

zemo• 16 days ago

huh, I'm not sure where you saw that reaction, the reaction I saw was universal condemnation of the appointment of Asha Sharma.

u2rarmchair• 16 days ago

I mean, here you are too declaring a XBOX defeat. You are no better than those armchair industry analysts. The 10th gen hasn's even properly started, we don't even have rumors of WHEN it will be.

Not saying that I disagree. I absolutely agree. I think Xbox is downright moronic to buy Bethesday on a promise of Starfield being a massive hit, and after it hilariously fails, they throw out a bunch of studios just so they can focus on their next thing even more.

It's just, come one. You have to see how ironic and conceited your opening paragraph was.

flohofwoe• 16 days ago

Microsoft is never going to figure out gaming.

They had it figured out perfectly in the Xbox360 generation (and for PC games by the late 90s), but I guess that the MS Games and Xbox divisions had a lot more freedom and were more decoupled from the Microsoft org chart back then.

dgellow• 16 days ago

The gaming world also evolved a lot during that time period

philistine11• 15 days ago

Console generations are a cultural construct. And just like the bit wars of the 90s, they are cultural constructs that cannot explain the current situation.

We have not left the PS4 era. Both Sony and Microsoft use modern CPU and GPU in the PS5/Xbox Series that can 100% replicate the previous console. They use the exact same online store, ushering in a modern era where old devices will lose access to the store, but the store's never gonna close. All of this makes the use of generations to describe console gaming obsolete. We don't talk about generations in phones, or laptops. Same thing with gaming.

asdaqopqkq3• 15 days ago

PS should move back to Japan, yen is cheap and the dev salaries are cheap.

bearcobra• 16 days ago

On one hand, the idea of using Microsoft’s crazy amounts of money to try to build a subscription gaming business feels like it should have been more successful than it has been. On the other, I think gaming has some distinct qualities vs TV/Movies/Music or other types of software that makes the idea seem way less appealing. Curious to see what the new direction looks like

dagmx5• 16 days ago

This is incredibly sad for a lot of my friends who are finding themselves out of work despite delivering well received products.

But at the same time I appreciate the candor of Asha saying that the corporate management are to blame and letting studios go back to being independent where possible.

Phil Spencer really messed up. Everyone in the industry knew Microsoft were making bad calls trying to dig themselves a hole with gamepass and simultaneously digging a hole with their acquisition spree. I’m glad that Asha is laying this bare even though it sucks to be brought in as the hatchet person.

This is an example of the glass cliff and I’m hoping she can help right the ship. I think they need to split to a wholly owned subsidiary rather than be in Microsoft proper, and I expect that to be announced at the Q1 investor meetings.

Phil really dug their hole deep. Microsoft themselves encouraged it. It’s been a decade of sheer incompetence at the highest level so I’m hoping they can right this without taking out half the industry in their wake.

righthand6• 16 days ago

I disagree, it wasn’t Phil that dug a hole but Asha who pushed Phil out with no plan. Why is Asha finally revealing her plan years later if she was such a good fit? She came in trying to automate away peoples jobs with AI for the last year or so and that is obviously failing. It wasn’t Phil that invested the entire company’s well being on stochastic parrots.

She has done everything but focus on delivering games (product).

scott_w7• 16 days ago

Just looking at Sharma’s history, she rejoined MS in 2024. Xbox was struggling long before that, so I don’t see how anyone can blame Sharma for the past 10 years…

nhinck2• 16 days ago

a) Asha didnt push Phil out.

b) She's been in the role for 4ish months, not years.

dagmx5• 16 days ago

How would Asha pull him out? How do you think she even had that kind of authority or seniority?

theandrewbailey• 16 days ago

Microsoft: Moves AI exec to Xbox exec.

Xbox exec: Deletes AI from games.

Color me surprised.

Anyone who's been paying attention to Halo for the past 15 years knew there was bad management the entire time. (Halo used to be the game that everyone wanted to have and to be; now it's an also-ran due to self-sabotage.) The first step is admitting you have a problem, so good job there, keep following through.

bargainbin• 16 days ago

Halo Infinite was the moment I knew Xbox was gone. The core game engine was the best Halo has ever felt, but everything around it reeked of incompetent management.

Giving a player a reward for putting in effort is one of the fundamental principles of game design. If you remove all the rewards, what incentive do they have to play?

Their response to player backlash which was essentially “deny, defer, gaslight and ignore” killed the online community for it within a couple of months, and I think they dropped what little content support it had within two years as well, after initially marketing it as a long-term “live service game”.

Blatant incompetence, how Microsoft ever let itself get in this state I’ll never understand.

Also I can’t even remember the campaign story. Was there an angel or something? It was a cliffhanger about some new enemy, as if they’ll ever make another game?

I just remembered the monstrosity that is the Halo TV series as well now, ah god… it’s been a rough decade.

nxc18• 16 days ago

I don’t think Phil had any other options while existing under Satya and a relentless push to services revenue. If Windows can’t make a case for itself without moving heavily to services (advertising and pushing 365, primarily), how could Xbox?

I’m not really sure how the C-suite is escaping blame here.

dagmx5• 16 days ago

Oh I definitely agree the C-suite at Microsoft needs blame. Microsoft need everything to be framed as avenue into services.

But Phil was the one who dug two incompatible holes and kept digging hoping they’d meet in the middle with buried treasure.

rtpg• 16 days ago

Buying Activision was a Phil decision. Not spending 67 billion dollars puts you in a different place

haunter• 16 days ago

Today, in some parts of the company, work passes through as many as 14 layers of management.

Not even national security institutions operate like this

rockyj• 16 days ago

This is a total mess IMHO.

- The make around 5 billion in revenue per quarter - The problem according to them is profit margin - around 150-160 million

So first of all, they are big! Secondly they are not at a loss. They just have a "thin, non-growing margin". So to fix all this they are trimming down, so they can "return to growth" (which I think is ridiculous).

Some points -

- They are huge business even now - 5 billion per quarter revenue is no joke

- They did not have to buy all those studios

- They looked at Netflix, and wanted the sweet monthly subscription cash stream

- Then they did not have to give away popular games day one on Game Pass

- And finally, they did not have to raise Game Pass prices to improve the profit margins. Of course, consumers pulled out.

- Once again, short term vision, crazy decisions, bad spending spree and a constant need to "make numbers go up" and who has to pay for all this?

hbn4• 16 days ago

Game Pass was never a sustainable business model. People liked it because when a new game came out, they could buy a month of game pass for like $15, play through the game in a couple weeks, and cancel. It was a really good deal because Microsoft has spent the past decade+ trying to recover from their terrible fumble of the Xbox One launch, so they were subsidizing gamers to come back to their platform.

With the money being spent on AAA titles these days, they are not going to make any money without increasing the price of Game Pass majorly. The big price bump they quickly backtracked on was an attempt to make Game Pass somewhere closer to being profitable.

Dylan168073• 16 days ago

Traditionally if you're going to play through a game in a couple weeks and then not own it anymore, that means you sell it and someone else buys it for their own couple weeks, and the company should be happy if they make $15 per person in the chain.

Also this is part of why I'm really worried about how weak the concept of game ownership is getting.

See also how anyone buying GTA6 near launch will be unable to resell it.

righthand6• 16 days ago

Well this is the new Xbox boss, Aska Sharma trying to course correct her own actions after pushing out Phil Spencer (and team). Phil had a deep understanding of the game world about profit margins and how the Xbox is essentially a stake in keeping Microsoft in the minds of consumers, a place in the home. Aska has a shallow understanding and sees only the financials and wanted to increase profits. Now she is burning it all down to try and “reset” and replace people with LLMs to increase profit margins. I imagine she will be pushed out herself end of year or next Spring (2027) once her naïve plan back fires.

tapoxi• 16 days ago

Are you conflating Asha Sharma with Satya Nadella? Asha just joined Xbox, she had no role in any prior decision making.

dwroberts• 16 days ago

Don’t know why this is being downvoted because it’s absolutely on the money. She’s a very green exec that is doing the classic “change everything to make it look like I’m doing something” while also not really achieving anything.

The rebrand to ‘XBOX’ is a good example of how they’re already out of ideas

draculero• 16 days ago

Just out of curiosity, I checked her Wikipedia page and this caught my eye:

Sharma posted in 2026 that she had recently begun playing video games under the gamertag AMRAHSAHSA to "learn and understand" the games industry

Imagine running the Xbox division and only just now picking up a controller.

adamwk• 16 days ago

She’s been in her position for less than 6 months. All of the problems were under Phil, so I don’t understand what you mean by course correcting her own actions

tomtheelder4• 15 days ago

I don't really have an opinion on Sharma since she's very green, but Phil Spencer's tenure was an unmitigated disaster. The strategy of rolling up studios and trying to grow through GamePass both completely backfired, with the studios producing few and generally unsuccessful games, and GamePass failing to convert casual players while demolishing your take from your hardcore players.

Was definitely time for major change at XBOX. Is this the right direction? I have no idea.

mjr002• 16 days ago

- The make around 5 billion in revenue per quarter - The problem according to them is profit margin - around 150-160 million
So first of all, they are big! Secondly they are not at a loss. They just have a "thin, non-growing margin". So to fix all this they are trimming down, so they can "return to growth" (which I think is ridiculous).

How is that profit margin distributed though? King (Candy Crush etc) and Mojang (Minecraft) are specifically called out as money-makers, it's possible that they're carrying the majority of profits while everything else is a dud:

We have also learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested.

As an example, Double Fine (one of the studios being chopped) has released 2 games since 2021, Keeper (191 peak player count on steam) and Kiln (163 peak players); these would be flops even for a normal indie game, for a studio getting Microsoft salaries those are enormous flops.

tracker16• 16 days ago

On the margins, that's crazy thin for the size of the org... One bad quarter could turn from a few million in profits to hundreds of millions in losses. It's too close, and there's no way to build/store funds for any kind of storm at that level.

Now, I think the vast majority of the pain is more than self-inflicted... I think actual business, marketing and focus need to start taking priority over idealistic political PoV. Let the games target their natural audiences and have the broadest appeal... at a certain point, trying to gain 1% of audience means alienating 25% or more.

egypturnash• 16 days ago

Keeper needs an optimization pass so badly. Once I finished the first zone the framerate dropped to the floor on my Steam Deck. Presumably it runs okay on the current XBox, but it sure feels like Double Fine's attention has moved on and will never return.

Absolutely drop-dead gorgeous but I don't think I am going to ever finish it until I get a Deck 3/4 in like 5-7 years.

johnnyanmac17• 16 days ago

Double Fine (one of the studios being chopped) has released 2 games since 2021, Keeper (191 peak player count on steam) and Kiln (163 peak players); these would be flops even for a normal indie game, for a studio getting Microsoft salaries those are enormous flops.

Hard to really say. Kiln and Keeper can easily be made up for by the sales of Psychonauts 2. I'm sure an indie Double Fine would not have been able to make those kinds of games.

This takes me back to Pertinent, another small game from a reputable studio, had its main writer saying that "this kind of game would not be possible without Gamepass". Which I 100% believe. Microsoft definitely didn't buy Double Fine trying to make the next Fortnite, but that arthouse strategy clearly isn't a factor these days.

alexp2021• 16 days ago

Really 191 players or 191k players?

2OEH8eoCRo0• 16 days ago

Compulsively chasing only the highest margins has been toxic for the country as a whole.

ebbi4• 16 days ago

What else do you expect from publicly listed companies?

Mix that with the increasingly higher concentration of wealth, and things are just going to get worse.

cortesoft3• 16 days ago

"Chasing the highest margins" is almost the entire point of a market based economy, and is the main selling point for capitalism. I get your complaint, but if you reframe it I think it isn't the real problem here.

The whole point of a market-based economy is to allocate resources to making things people actually want. How does the market figure out what people want more of? Well, profit margin. If someone is making a lot of profit selling something, that is a really good sign that people want more of that thing. Other people see the high profit margin, and move to get into that business. More of that thing is created, and people's demand is satisfied.

The high profit margin is the signal (and the incentive) to get more of that thing.

In other words "Compulsively chasing only the highest margins" can be rephrased as "investing in things that people want more of"

zitterbewegung• 16 days ago

Xbox around 2021 had around a 12% profit margin and the gaming industry as a whole was around 17-22% . In 2023 the target for the division was put to 30% . We see this new restructuring because the target was put this high. Microsoft really wanted Game Pass to be a steam competitor which is pretty much what everyone in the industry tries to do and fails. The push for Game Pass prices to be higher was to get the 30% margin and that didn't work out. They aren't operating at a loss they are operating at a goal and they failed the goal. From other child comments many studios they bought probably were below average. We can see this restructuring basically is that they failed the target, the old guard went out as the new guard came in.

https://www.bloomberg.com/news/articles/2025-10-23/microsoft...

johnnyanmac17• 16 days ago

Microsoft really wanted Game Pass to be a steam competitor which is pretty much what everyone in the industry tries to do and fails.

Gamepass is quite literally the most anti-steam strategy ever. It's a massive loss leading (or rather, low margin leading) service relying on a pseudo-rental service to provide value. Steam got to where it is by keeping all its costs lean and developing a service around taking a cut from premium digital goods.

From other child comments many studios they bought probably were below average.

In revenue, maybe. That's the fault of Microsoft in two fronts. One for purchasing game studios who always operated at low margins, and two for directing them to focus on quality over budget. Double Fine and Ninja Theory aren't studios you buy with an expectation of 30% ROI in 6 years (ignoring the pandemic in the middle of that). Let alone when you explicitly tell them not to worry about finances.

On an artistic level, Hellblade was an insutry darling and about as close as you can get to an "oscar-bait" of a game. It's something you buy for prestige. Double Fine is a very seasoned indie studio who delivered several cult classics. You buy that for a brand that gives you variety from the current "online FPS juggernaut". Those strategies changed dramatically over the decade.

TulliusCicero4• 16 days ago

Being a Steam competitor involves making a store that's actually good. All the other major stores/platforms don't really seem to give a shit, to be frank. Steam has like 20x their feature set, and the gap appears to be still growing.

If anything, it should be easier to make cool new features when you own the hardware side of the platform experience too, but no, it's Steam that has stuff like remote play together, not PSN or Xbox.

etempleton• 16 days ago

Completely agree. Their problem is that corporate wants more money to funnel back into AI and it is really inconvenient that Xbox provides only a couple billion dollars per month whereas Office and Cloud provide many more billions. What a complete joke.

johnnyanmac17• 16 days ago

Different eras of Xbox, and tech as a whole.

Spencer's strategy for Xbox was very 2010 coded: rely on the billion/trillion dollar company to undercut the competition and gather market share and leverage. Classic embrace, extend, extinguish. That's why they bought a bunch of arthouse studios who don't immediately make money, invested hard in a subscription service that was wildly unprofitable (a strategy that even TV services couldn't make profitable, mind you), and focus on moving software more than hardware.

That strategy shifted dramatically between rising interest rates, a cooling consumer market, business uncertainties, and companies simply wanted to throw any excess fat into the AI rat race. So those art house studios were removed, Gamepass needs to enshittify pre-maturely,production needs to slow from a variety of offerings to the usual safe and sure releases. And of course, the biggest expense needs to be trimmed down on: because no one is stopping them from doing it in the US.

The number will still go up, but in different ways. They aren't doing this because they are in the red, they are doing it because they want all the money instead of a lot of it.

darth_avocado2• 16 days ago

Then they did not have to give away popular games day one on Game Pass

A company that sells consoles complaining about not having enough games after 25 years in business and acquiring most popular game studios is hilarious.

They keep cutting game studios, killing games and then set ambitious profit margins. At some point you have to question, do the people in charge understand their own business at all?

They just gutted bungee and basically killed Destiny 2, not because the game won’t sell, but because it won’t generate the profits they unrealistically set.

ErneX7• 16 days ago

Bungie is not a MS studio since 2007.

belthesar• 16 days ago

Point of clarification:

While Bungie had historically been tied to Xbox / Microsoft during the Halo era, Bungie spun out to be its own company in 2007, and then was bought by Sony in 2022. It was Sony, not Microsoft, driving the most recent layoffs at Bungie.

tayo42• 16 days ago

This attitude seemed prevelant at Blizzard too based on a book I read (Play Nice)they wouldn't fund anything that wasn't a billionaire dollar idea.

Never ending growth and profits just seem to ruin everything

darth_avocado2• 16 days ago

Edit: even though i inaccurately associated Bungee with MS, they are not. However, the comment stands when you replace it with any of the other successful studios like Bethesda, Id software, Blizzard etc. A bunch of studios and their ips were gutted not because their games sucked, but because they didn’t meet the profits Microsoft expected, which is ridiculous.

chrisfosterelli5• 16 days ago

With due fairness, these are two different sets of leaders and two different strategies.

A lot of the strategy you outlined -- buying all these studios, replicating netflix, giving away day one games, raising game pass -- was a strategy put in place by Phil Spencer. Phil pushed for this investment with the promise it would pay off later for MS. He's talked publicly about having to convince Nadella to put up ungodly amounts of cash for these investments and about how the bar for expected return was very very high. It seems like it clearly hasn't worked out to Microsoft's expectations or they've lost patience for waiting, and Phil has now "retired to spend more time with his family" (i.e. been fired).

Now Asha is here and presumably has a mandate to fix this and get back the profit margins that were expected from xbox. Sarah Bond, the xbox president, has resigned, and with this letter it seems the previous Xbox COO is out too. There is clearly a huge shift in Xbox leadership happening and it shouldn't be surprising that Asha -- who is known as a business-driven executive and not a 'gamer' -- is going to be reverting a lot of previous strategy decisions.

My 2c is that Phil's strategy made sense on paper, but I don't think they were able to manage this many studios in practice: nearly all the studios they bought have failed to produce the number of games expected on time or on budget. It also turned out that overly cheap gamepass would cannibalize their business and overly expensive gamepass turned away subscribers. I think the netflix model isn't something you can speedrun and execution of it turned out to be very hard and expensive. Maybe it would've worked out with more time but it seems Nadella didn't think so anymore.

Forgeties793• 16 days ago

I certainly enjoyed gaming their rewards system for years on a series S. $300 for the box, maybe spent $40 over roughly 4 years for gamepass. It was nice while it lasted!

sikim• 16 days ago

Phil and the likes were too hands-off on these studios post-acquisition. They got too complacent enjoying steady paychecks over years of delays while working on their niche games that only highlight their artistic vision over generally fun gameplay. That's where they failed. The Activision/Blizzard acquisition and GamePass fumble were just a nail on the coffin

mrandish• 16 days ago

Phil's strategy made sense on paper

It was a risky bet that became even higher risk when MSFT spent ~$80 billion dollars rolling up game studios near the peak of the historic COVID gaming bubble. They bet it would greatly increase Game Pass sub growth. Instead, Game Pass sub growth slowed down. At the time I thought it was a reasonable plan - but not at the prices MSFT was paying for content. Then the DRAM drought killed hardware sales to gamers forcing the issue.

jrmg3• 16 days ago

I never understood the esteem Phil Spencer was held in, seemingly both by fans and industry insiders. I never understood Phil’s strategy.

Buy a plethora of studios. Pay an order of magnitude over the odds for the big ones - just to be sure you get them! ‘Rescue’ smaller ones of questionable financial value - as part of Xbox they’d somehow be successful enough to justify the price paid. Heavily manage the studio heads - but, uh, also give them total creative freedom - and allow them to make niche games. Sell hardware at a loss - but also make the games available on all platforms. Don’t allow any software that takes advantage of your most powerful hardware, because it also has to run on the other, less powerful console you are also selling. Also, the future is streaming! But, uh, maybe not!

Not just the strategy, but almost every aspect of the ‘strategy’, was incoherent - as current management is very close to outright saying.

trashface• 16 days ago

Asha sounds like the kind of person you bring in to shut down a division cleanly. "Headshot!" as we gamers might say.

pandaman5• 16 days ago

Acquiring a game studio only makes sense if you see a way to make it grow either by providing capital or better management. E.g. Activision acquired Treyarch in 2001 for $20M, which was probably 4-5x of its annual profit at the time. Seeing that very few people played (or even heard of) Die By The Sword or Draconus you could imagine that there was still a room to grow so there was a good chance you break even on your investment even sooner than 5 years and start making profit for yourself. Treyarch, who did not need to do the sports games contracts anymore and could hire more people, proceeded to making Spiderman and, later, CoD. I believe Spiderman alone made way more than $20M spent in the acquisition.

Buying Activision for 20x of its annual profit, on the other hand, makes zero sense. ABK was not lacking capital, had the same MBA management Microsoft has and did not have much room to grow, Blizzard alone had 5K employees. Their IPs had long time since plateaued or had been in decline already. What was Microsoft plan to increase profit? Switch everyone to Teams? Put more people to work on CoD and release 2-3 CoDs per year, hoping they all will sell as well as the annual CoD? The more realistic path to return of the investment could come from increasing Xbox's share of the market by making their newly acquired IPs Xbox exclusive. But they did not do even that.

jsemrau• 16 days ago

Over the last 8 years

Undead Labs has shipped nothing Compulsion shipped South of Midnight topping at ~1600 players on Steam Ninja Theory has shipped Bleeding Edge and Hellblade 2 and Double Fine shipped Keeper and Kiln.

It's a net positive that these studios and this culture is gone. I am sure that food was amazing.

rob742• 16 days ago

So, Phil gets a golden parachute, and all the studios that got bough up because of him will be "set free" if they're lucky and disbanded if they're not. Yay for capitalism...

PaulHoule4• 16 days ago

It comes across to me as a really honest letter. At least they are talking about spinning out studios instead of shutting them down, I think that plays better than previous announcements. (e.g. make a hit game like Hi-Fi Rush and get shut down!)

port114• 16 days ago

Fair, but who told them to buy up everything? That part annoys me to no end.

And the bad plays are management-related, so they’re firing a bunch of people…

sharts• 16 days ago

Why is any of this surprising? This is just MBA fundamentals.

mattalex• 16 days ago

150M at 5B revenue is not great: that's 3% margin!

The bigger issue is that console manufacturer revenue is highly cyclical. This is hard to see in e.g. Xbox and Sony since they are both part of a larger conglomerate, but really obvious for nintendo.

You generally have a cycle of - "Launch": high marketing costs, low/negative HW margins - "Mid-cycle": lowering manufacturing costs, large game sales, high margin DLCs - "end-of-cycle": falling HW sales, fewer exclusives (-> preparation for next gen), fewer consumers (-> waiting for next gen). Here you usually have maximum profits since you don't subsidize HW and marketing is minimal (platforms are already locked in)

Generally you have to establish a big userbase during the mid-cycle such that you can levarage it during the late-cycle to be able to afford next-gen. Xbox has the big issue that their mid-cycle was catastrophic, which means they now don't have the console base to get into the next generation: If they have 3% margin _right now_ in the end-of-cycle where marketing and development costs are at their lowest, this does not bode well for the overall health of the business.

Narishma2• 16 days ago

"Mid-cycle": lowering manufacturing costs,

That was true historically but is no longer the case. Even last gen manufacturing costs didn't go down as much as they used to. This current gen they actually increased multiple times.

_verandaguy2• 16 days ago

    > 150M at 5B revenue is not great

Considered as a raw percentage in a vacuum, sure, I guess, but we're talking about...

- A company which has undertaken a concerted, long-term effort to consolidate the industry under its umbrella (something they themselves call out as a problem in this post), reducing consumer choice

- A company which has captured a significant chunk of the console market. They're one of the big three (alongside Sony and Nintendo), and have been since the early 2000s, arguably, for crying out loud.

At a certain size (typically as measured by market capture) the expectation for growth needs to be reality checked. This is still $150M of pure gravy every single year. Sure, this is going to a corporation, but that's more money than most people could possibly dream of earning in ten lifetimes.

Every year. For a company that's already putting money towards opex in the form of developing new games and new content for existing ones, for a ridiculously broad portfolio.

To be clear: it is Microsoft's and Xbox's prerogative to pursue more profit, but I reserve the right to call this out as absurd under the circumstances.

If you want to make the argument that Xbox has suffered from a lack of focus in the past decade (... or even longer), or that there's been mismanagement (I would say since around the time 343 got created), then those are fair arguments, though I don't think those are justifications, on their own, for cutting thousands in headcount.

Allowing this org to balloon to fourteen levels of management on any vertical is a joke. Allowing the absorption of so much of the game dev industry and still being unhappy with $150M in annual profit after being such an active participant in the oligolpolization of console gaming is just a bit unserious.

skeeter20202• 16 days ago

> 150M at 5B revenue is not great: that's 3% margin!

and yet everybody - including Microsoft - is in a big rush to sell us AI services, which could look an awful lot like a historical utility business. 3% will be a dream return in that scenario!

georgeecollins3• 16 days ago

Sure, 3% is terrible. But the point is you spent a fortune buying all these studios-- aka key strategic intellectual properties-- and then you manage them badly. Then you just sell or shut them down at their absolute bottom and you end up just destroying value.

Older forms of media understand this. WB loses money and its still really valuable because people see the potential of Batman, Harry Potter etc.

IP studios are really valuable because they can drive attention to your platforms. Try starting a premium streaming service or a console without IP. But you can't manage it like tech. It's not going to grow all the time and returns are uncertain.

MSFT could be in the XBox as a platform business. They could have a few in house studios to prime the platform pump. Once it started being a content business they got lost.

mattfrommars• 16 days ago

The bigger issue is that console manufacturer revenue is highly cyclical. This is hard to see in e.g. Xbox and Sony since they are both part of a larger conglomerate, but really obvious for nintendo.

There is absolutely no reason to be in sync with Sony on their console release date. They could have effectively released consoles bit more frequently. But they choose not to do so. Their acquisition has been questionable - Activision/Blizzard.

At the end of the day, the employee pay the price for bad management decision which they keep on making.

Drupon2• 16 days ago

150M at 5B revenue is not great: that's 3% margin!

Oy vey maybe this kind of money grubbery is not good for our society.

ralferoo• 16 days ago

Development costs are far from their lowest at end-of-cycle.

That's exactly when the prototype development kits come out of small scale testing (maybe tens of units, all incredibly expensive bespoke units, probably hand soldered and assembled), production ramped up a little and the evaluation kits are produced and distributed to first party studios and large third party studios, with thousands of consoles produced with the expectation that their lifespan is likely only going to be 3-6 months. These are then extensively tested by developers, both to see what needs to be done to get their launch titles actually working on the machine, but often very serious hardware bugs are found in this period that may require fixes to the chips themselves or software workarounds that affect performance. For some of the recent console launches there have been 2 or 3 rounds of evaluation kits in a year, and the previous evaluation kits are effectively bricked.

After the evaluation kits seem to have converged on a final product, the development kits are produced to ideally match the final version of the evaluation kits, but again these are tested before production is ramped up because some things do change (most trivially the case, even if the board is fine). At this point tens of thousands of dev kits are produced, each different enough to retail kits (more memory, maybe extra ports, etc), usually at least 6 months to a year before console launch so studios can make a final push on the launch day or first quarter titles, and in the background the same evaluation process for retail kits (usually just stripped down from the development kits, but usually different cases etc) starts, and eventually a final design for the retail product is produced that's good enough for manufacture.

This time is definitely not just when the console manufacturers kick back and rake in their profits, this is when they're already spending big on the final push to get to the point where they even have a new console to start a new cycle with.

Separate to the console manufacturing side, the years before release are when big money is spent getting studios on board to produce launch titles, because without those, the console will be dead on arrival.

TLDR: revenues at the end of the console cycle aren't funding the next generation, because it's probably already been in development since the launch of the current console, rather those end-of-cycle revenues are hopefully paying off the gamble they took funding development for the current generation.

glitchc• 15 days ago

Reads to me like multiplayer and server-side games incur a hefty infrastructure cost that eats into their profits, subscriptions notwithstanding. Maybe XBox should focus more on single-player exclusives. They certainly have enough studios to do it.

ksec2• 11 days ago

It has been really really long since I read anything on HN with someone that has some basic understanding of business. May be all is not lost.

Yes. 3% margin is lower than inflation of US treasury rate. As some business would even call it borderline charity. It is also not a commodity market, which means it is not healthy. And any headwind is going to be damaging.

burnte• 16 days ago

- Then they did not have to give away popular games day one on Game Pass - And finally, they did not have to raise Game Pass prices to improve the profit margins. Of course, consumers pulled out.

I saw this coming from day one. The instant they did Netflix for Games, it was going to gut their margins. And then the inevitable pullback, either holding new games for months or raising the price, was going to kill the value proposition.

They said "This will make us a mint" and celebrated the victory years too early.

artyom• 16 days ago

Those metrics are hugely misleading because they account for current fiscal year revenue and margins.

For Xbox being what it is today, which is mostly about the subscription and not the hardware console or the exclusives, you have to compound their acquisition frenzy of 2018-2020 or so, which totals about 75 billion+.

They didn't want the developers nor the catalog. What Microsoft wanted is to change the economics and dynamics of the entire games industry, to make it Netflix-like (play what's in the catalog today, pay monthly even if you don't play anything) vs. what Steam offers (purchase once, own "forever", even if it's de-listed).

But that didn't play out. Optimistic estimates put total revenue for Xbox since then in the 20B ballpark. At a ~5% margin (as other commenters have pointed out) the profit is about 1B dollars.

It means that after almost a decade, the entirety of Xbox is in the red for about 74 billion dollars, which is 74 billion away from breaking even.

Steam still dominates PC gaming. Xbox consoles can't be more irrelevant today.

This isn't about over-hiring or AI. It was a bet at the executive level that went horribly wrong. They can still do things like selling IPs at a bargain to compensate, but still. Horribly wrong.

Note: Microsoft doesn't publish hard factual data so the numbers above are somewhat speculative (e.g. "analysts data")

brikym• 16 days ago

It seems really odd to have a Netflix consumption model for games. Generally people want to play a few favourite games for a long time and get very skilled at them. You just don't need to churn through content like movies.

ActionHank2• 16 days ago

You also missed the part where they positioned themselves as the value offering. That's gonna be hard to beat whilst still achieving "return to growth".

jshen2• 16 days ago

That's a 3% margin which is unsustainable. It's less return than you can get from buying treasuries, which means that if they don't improve it they will go out of business.

cortesoft3• 16 days ago

This is the frustrating thing reading these comments, where people seem to assume that any profit margin is good enough to sustain a business.

People see a 3% return and think, "Well, they aren't losing money so there is no reason they can't just keep doing business as usual." What this idea is missing is that the investors in a company aren't choosing between "keep my money in this company" and "sit on the cash", they are choosing between "keep my money in this company" and "invest my money somewhere else"

In other words, you aren't just looking at direct returns on an investment, you also have to think of the OPPORTUNITY COST of the investment. By keeping their money invested in a business making 3% returns, they can't invest that money somewhere else.

jm42• 16 days ago

I agree with the mess part. I also feel like a reset is necessary and they are messing it up more right from the start. Fourteen layers of management? That's insane. But 3200 layoffs is a hell of a lot more than middle management cruft. Asha certainly has her hands full over there and the honeymoon period - if there even was one - is definitely over.

laserDinosaur• 16 days ago

The make around 5 billion in revenue per quarter

I wonder how are they taking in 5 billion per quarter when their latest console barely outsold the first Xbox. I doubt it was making a bit less than 5 billion per quarter with quotes like "Ultimately, Microsoft lost an accumulative total of $4 billion from the Xbox, only managing to turn a profit at the end of 2004." on wikipedia.

So how are two consoles with roughly the same sales numbers so far apart in revenue?

willio58• 16 days ago

And finally, they did not have to raise Game Pass prices to improve the profit margins. Of course, consumers pulled out.

Myself and 2 of my friends stopped our subscriptions the day that happened and never went back. I know it’s anecdotal but I’m happy to see others did the same.

hoherd2• 16 days ago

Another thing that is crazy to me (and maybe this is a premonition) is that if you play MS games online on Xbox, you have to have a subscription, but if you play on other platforms you can play for free. They are literally punishing their own users with additional fees. I thought this was just Minecraft, which is why my kids and I always play Minecraft on our iPads instead of on the Xbox, but when I recently bought Forza Horizon 6 I was amazed to see that I could play online with other players for free, whereas on Xbox I had to pay to play online in Forza Horizon 4 and 5. So they are basically saying "you gave us a bunch of money for hardware? Cool, now give us more money every month to use it online!" It's absurd, and it's one of the things that drove me away from Xbox. I also have friends who have been lifelong Xbox fans who have had enough and are leaving for Steam.

ErneX7• 16 days ago

I think they changed it not long ago so you can play free to play games without the online subscription. Just like on PlayStation network.

But paid online games you need to be subbed yes.

tonyhart74• 16 days ago

seems like you don't understand business

I don't usually take HN audience seriously when talking about economics

sakex• 16 days ago

3% profit margin means you're better off selling the business and investing the cash into US bonds at current rates.

port114• 16 days ago

If everyone thinks like that, no jobs are created. Xbox hires a ton of people and creates genuine value for consumers. Okay, that last part you can question, but I’m an original Xbox-er so I believe in it.

3% profit should be totally fine for any business. The planet is cooked, I think we can live with the shareholders making a bit less.

pjmlp5• 16 days ago

Fully spot on, I really don't get late capitalism, it feels pretty much back to a feudal society, with big tech replacing the lords up in the castle.

lelanthran3• 16 days ago

So first of all, they are big! Secondly they are not at a loss. They just have a "thin, non-growing margin".

At a roughly 3% profit, they are barely breaking even and have no money to invest in staying current. It's not a sustainable business.

prmoustache• 16 days ago

- The make around 5 billion in revenue per quarter - The problem according to them is profit margin - around 150-160 million

How are they still doing 5 billions in revenue per quarter? Are Xbox and games still sold? In my area they seem to have disappeared from the physical stores alley. I realized that a few weeks ago there were Playstation and Nintendo products in the video game area but no Xbox anything.

King-Aaron2• 16 days ago

These companies are discovering that selling products to consumers is no longer the thing they need to do in order to earn money.

port114• 16 days ago

Might work if you don’t: out-price your hardware, get rid of disc trays, make GamePass expensive, force Microsoft accounts and online mandates, buy up every studio and force them to out out crappy updates,… ahm, no it’s the users, they’re getting old and cranky.

Yikes, I bought every Xbox console and plenty of day-1 releases, but skipped the last gen when it became clear that the platform isn’t about gamers anymore.

Triple-As are also getting tiresome, so I think plenty of people are happy to get a cheaper title on Steam that feels like better value.

rob742• 16 days ago

The times when companies only restructured when they were actually making losses are long gone. Today, if they "underperform" (i.e. they're not as profitable as the stock market thinks they should be), investors want to see blood today rather that tomorrow.

rldjbpin• 16 days ago

xbox is not a startup and neither m$ a vc. the board is not in love with gaming to continue sponsoring it. but if the solution is to make it even worse to game in their platform, then i hope this crashes and burns for good.

reactordev• 15 days ago

a couple are symptoms of their problems and the others are causes. They lack the understanding to know which ones. They tried (and failed) to build a subscription model out of game renting while cannibalizing the very studios they purchased. There was no saying no. They were going to take you over whether you wanted them to or not. They would also scheme to half-ass your marketing partnership so you wouldn't make targets so you would be vulnerable to a take over. It's Microsoft at it's finest. A lesson in Greed Above All Else.

https://wccftech.com/xbox-layoffs-gut-id-obsidian-zenimax-on...

KaseKun• 15 days ago

You have to leave your local maximum to find the global maximum.

jstummbillig2• 15 days ago

Revenue is just not a useful concept to understand the state of a company. I can easily generate revenue by simply exploding costs. Blockbuster had huge revenue.

If we talked about costs as much as we talk about revenue (which carries roughly the same amount of information) people would judge theses reports very differently.

fourseventy• 15 days ago

Tell me you know nothing about business without telling me you know nothing about business.

bob1029• 16 days ago

We will reduce management layers to no more than 5, and where possible, 3.

This reads like something from The Office.

righthand6• 16 days ago

Michael begging Oscar to tell the shareholders how to save the company.

brcmthrowaway2• 16 days ago

I can't believe he just left the building

kristjansson• 16 days ago

We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes.

xbox-specific issues aside, this proposes an interesting view of the future of work.

badprose• 16 days ago

Isn't this basically the same structure they currently use i.e. individual contributors, managers, and producers?

cardy313• 16 days ago

As someone who works in big tech with a partner at a similar big tech company _but with player coaches, DRIs, etc_ it is basically the same thing except messier.

Your manager who used to just focus on motivating and unblocking their people? Now they have to ship code too since they’re a player coaches! You’re a DRI who needs management to get your project unblocked? Too bad your player coach who has to ship code now also has 20 direct reports because the hierarchy was flattened so you can’t get time with them until next week and are blocked until at least then.

It is the hot new trend from the “thought leaders” who have all consistently copied each other’s bad ideas for the past 10 years.

gbrindisi• 16 days ago

I also notice the growing trend to have EM carry individual contributor duties, I thought it was mostly a consequence of using coding agents but perhaps it's not: the EM figure as we know might just be a consequence of the golden zirp times (do you remember the endless technical EM vs non-technical EM debates?)

__turbobrew__• 16 days ago

I think non-technical EMs are fine, but they need to manage an appropriate headcount. I see EMs who manage 2-3 ICs and have no other responsibilities, those EMs need to either take on more ICs or start coding.

asveikau• 16 days ago

This is how well structured teams have worked for a long time.

It sounds pretty similar, for example, to team structure ideas proposed by Fred Brooks in The Mythical Man Month from 1975.

franze• 16 days ago

When I bought my XBox i spent half a day setting up an account and payments.

Good old times. The last time I tried to buy something on Xbox it fails miserable with multiple cryptic error messages - mostly around my credit card.

No problem though to biy the game on my mac via browser and then after a few more settings actually showed up on my xbox.

calvinmorrison• 16 days ago

"Today, in some parts of the company, work passes through as many as 14 layers of management. Our platform teams are 40% larger than they were at the start of this generation, even as our player base and playtime have declined. "

datakan• 16 days ago

14 layers of management is truly epic. I don't think I have ever been more than 5 levels down my entire 30 year career.

protimewaster3• 16 days ago

Xbox has an interesting opportunity going forward, that I expect they'll fumble.

Interest in physical media has actually been on the upswing, and, with Sony announcing their plans to abandon physical media, it feels like MS has a chance be the "good guys" like what Sony did to MS when MS threatened to ruin physical media prior to the Xbox One release.

However, I'm expecting Microsoft to simply follow Sony's path, because I think they are already going down a path that favors digital-only, and I also think they just don't care to distinguish themselves. It seems like Xbox's claim to fame for the past few years is "It has game pass, and it can play a lot of the same games PlayStation can."

jeppester• 16 days ago

Xbox is ahead of Sony on this path. Their studios often, if not most of the time, release physical games that require a full download to play.

I doubt that they will go back to where Sony are now.

protimewaster3• 16 days ago

I doubt that they will go back to where Sony are now.

I agree. However, I do think they would get some positive attention (and some accompanying sales) if they were to backtrack and announce a console more like the 360.

It feels doable if they care to do it. Physical media should still be viable for holding all the game data for a while longer. Blurays can manage up to 128 GB, and I think the average game install size is ~60GB right now, giving most games some room to grow.

The biggest issue with a strategy like that is that they're, like you said, pushing digital-only hard already, and they're also trying to save money, so the idea of spending more money to make future consoles with disk drives, and to make disks, is unlikely to appeal to them.

It is a shame, though, because it seems like the Xbox 360 will have been widely viewed as peak Xbox until the end of Xbox.

saghm6• 16 days ago

Interest in physical media has actually been on the upswing, and, with Sony announcing their plans to abandon physical media, it feels like MS has a chance be the "good guys" like what Sony did to MS when MS threatened to ruin physical media prior to the l One release.

Not only that, but RAM/GPU/SSD prices going up so much recently (which is especially jarring for SSDs, which for like a decade had been getting more affordable; I bought a 120 GB SATA SSD in 2012 for around $100, and I was able to buy a 1 TB m.2 one for around the same price a few years ago) is starting to equalize pricing for PC gaming. In 2022, the initial Steam Deck launched for just $400, and it continued to be offered at that price for a few years, which made it cheaper than the Switch 2 launch price.

I feel like if I were a console manufacturer, I would be trying to figure out a way to take advantage of that. Other than price (previously), the other obvious selling point of PC gaming is more control over your system, so there could be an opening to try to lure away wayward PC gamers with some changes that give them a bit more control on the console. I agree with you that I can't really imagine Microsoft doing this though.

sylens• 16 days ago

The problem with the physical media for today's consoles is that it is the game in name only. The version on the disc is quickly outdated by launch day patches, follow-up patches, add-on content, etc.

I do think there is a market for a return to an XBox 360 model where the tech behind the games is artificially constrained to allow for games to be published solely on DVDs again. No installation required, no patches required, smaller budgets, quicker release time lines. But Microsoft is not the company to pursue that approach

tancop• 16 days ago

anyone who has the disk can download the patches and extra content. there is no way to block a specific copy or prevent transfers like with a digital purchase. the point of physical media is sharing and resale, not the piece of plastic sitting on your shelf.

i agree that mandatory downloads are a big problem (thats why willitplay is a thing) but offline installs from disk are the biggest change that made ps5 games load so much faster than ps4 and opened up a lot of new options for devs. reading data from ssd will always be faster than a blu ray. the only downside is you have to manage space a bit more but its worth it. if you want straight from disk get ready for slower uglier harder to develop games.

danbolt• 16 days ago

You’re certainly right, especially for the AAA games coming off the presses, but it’s not always true with certain indie games, especially if they’re doing a physical print run long after publishing.

You can occasionally get one where a very final version copies straight off a PS5 disc.

tomtheelder4• 15 days ago

You know sorta feels to me like some new physical tech would be warranted here. Something with a good amount of storage, very quick I/O, and read/writable. More like a fancy thumb drive than a disk. Let the version on it be updated by the system to stay current, gain add on content, etc.

mvdtnz9• 16 days ago

Interest in physical media has actually been on the upswing

Sure it has. Just like how demand SD card slots and 3.5mm jacks on phones is on the upswing. If you only read tech forums.

protimewaster3• 16 days ago

If you want to see it outside the context of tech forums, you can look up the industry reports and see the numbers yourself. There are some media types that are dropping, obviously, but there are multiple types of physical media that have seen notable growth recently.

steve19773• 15 days ago

Keep in mind though that Sony is/was actually a manufacturer of physical media.

zzixp2• 16 days ago

Impacted non-studio dev here. It's a bloodbath like some of the leaks in the past few weeks have said. Many important platform/infra teams getting gutted, even in areas where there's supposedly a ton of future investment.

markus_zhang7• 16 days ago

Thanks for sharing. I heard that ID also got gutted, from Scott Miller on X: https://x.com/ScottApogee/status/2074198967550685268

Is it true?

zzixp2• 15 days ago

Yes from what I can tell :/

I was in the console/platform dev org so not a ton of insight into studios, but I've seen a ton of ESO and Id folks posting on twitter

scuff3d• 16 days ago

"Management fucked up, and now you all get to pay for it. Have a nice day :)"

joshstrange3• 16 days ago

I think the Xbox Series X will be my last Xbox after owning Xbox, Xbox 360, Xbox One, and the Xbox Series X. I was all-in on their platform and I even paid for Game Pass for many years.

But they kept increasing the cost of Game Pass with no new features, the platform has seemed stagnant, and honestly I can't tell you why my Series X is better than my Xbox One. Literally I don't see a difference. I'm sure there is one but as a user I really didn't feel like it was a big step up. I bought it because I had every other Xbox and it seemed like the next logical step.

That coupled with most games feeling like lootboxes wrapped in just enough of a game to justify calling it one, at higher and higher price points, all while trying to get more money after they've taken your $70/$80 for the base game. Oh wait, you bought the poor-person $70 version? You really need to the Ultra Collectors Edition Gold Special Release Version for $120. Oh also, make sure you are buying the season pass...

Meanwhile I buy games on my steam deck and/or from indie developers for a max of $30 and get way more gameplay/fun that the "AAA" games (which have largely sucked IMHO).

I'm over here playing Mass Effect 1-3, Skyrim, Fallout 4, and other games OVER A DECADE AGO. They are the only games not completely ruined by lootboxes, always-online BS, or trying to sell you a shell of a game with extras you have to buy [0]. I was excited for Starfield (Skyrim in space!!) but it was a complete bust. After spending, quite literally, 1000's of hours in Skyrim (and buying and rebuying the Anniversary/Special/Collector's edition enough times to be embarrassing) I could not get excited about Starfield and stopped playing after a few hours. The new Halo was meh, I played through it and the open world was somewhat cool but I guess they wanted to do seasons of new content and I have zero interest in that. Give me a solid single player game, that's all I want. I cancelled Game Pass after realizing I was paying an absurd amount of money to play a single game (Deep Rock Galactic).

I think I'll stick to my Steam Deck which I enjoy way more than my Series X.

[0] Yes, Skyrim/Fallout had expansion content but it's tame compared to most games today.

bluescrn2• 16 days ago

I cancelled Game Pass when the recent price hikes quit.

Then realised just how few games I'd actually bought this generation. Game Pass was a mistake, or at least putting big AAA releases on there on day one was.

joshstrange3• 16 days ago

I think I've bought like 1-2 games this whole generation and even with Game Pass I might have bought 1-2 more max. Yes, I dabbled in a handful of games but never more than a hour or two before I lost interest (and I never had the interest to pay $60 for it).

Mostly I was playing indie/older games that could have been playing on the Xbox One.

12_throw_away• 16 days ago

  I want XBOX to be one of the few companies that entertains more than a billion people each day

"more than a billion"? What are we doing here? Do you have any idea what your target market is? Surely someone in your organization can provide you with a good stretch goal ... >10% of all humans using an XBox daily is not that.

Seriously, I cannot fathom why you would say this. Innumeracy? Narcissistic delusion? Stealth launch for a new industrial human cloning project?

babelfish• 16 days ago

There are approx ~3 billion "gamers" worldwide, why shouldn't Xbox set a goal of 1/3 of them using their platform?

summarybot2• 16 days ago

"Let's go from 1 in 15 gamers to 1 in 3 gamers" sounds nice, probably gonna need employees for that!

hbcdbff2• 16 days ago

You even felt the need to use quotes yourself.

mghackerlady2• 16 days ago

Because approximately most of them exclusively play mobile games

NeutralCrane• 16 days ago

I’m guessing 90% of them are mobile gamers exclusively, so no, that is not realistic

bluescrn2• 16 days ago

Yet the biggest selling console of all time, the PS2, sold 160 million units.

tom_• 16 days ago

XBOX here presumably refers to the entire division, so it's not limited to just people playing on the games console.

cardy313• 16 days ago

Candy Crush is probably the majority of that.

Alien1Being4• 16 days ago

Asha Sharma needs to keep her bosses happy.

Spinning fiascos as opportunity is standard practice.

theragra3• 16 days ago

I wonder about the future of inExile and clockwork revolution

theragra3• 16 days ago

It a pity. So many good studios gutted, for the only reason "margins too thin"

_joel• 16 days ago

"role eliminations".. So people losing jobs then :/

VikingCoder2• 16 days ago

"And we will streamline how we work across our tools, with a cleaner code base, shared services, and 50% reduced vendor spend."

How will they achieve cleaner code, with fewer workers? Seems like a well-intentioned platitude.

Joel_Mckay• 16 days ago

Or... studio publishers may be encouraged to use a proprietary platform specific engine. Trying to dethrone UE5 would be silly. =3

rybosworld2• 16 days ago

That messaging is for investors. To a dev's ears, it's a meaningless thing to say.

It reminds me when Elon took over twitter and made a comment to the effect of "we need to rethink the entire tech stack from the ground up". Someone asked Elon what was wrong with the tech stack, and he called them a jackass.

nonethewiser4• 16 days ago

It's quite insane that twitter went from 7500 -> 1500 employees and the site didn't implode. 80% of the people gone.

WorldMaker15• 16 days ago

They'll use a magic "Copilot for Game Dev" LLM genie that produces nothing but clean code.~

mapontosevenths• 16 days ago

"Write a new Halo game. Make no mistakes."

falcor842• 16 days ago

How will they achieve cleaner code, with fewer workers?

What do you mean? My experience has always been that the more cooks there are in the kitchen, the messier the codebase is. Has yours been different?

VikingCoder2• 15 days ago

My experience has always been that the more you're trying to do, the messier the codebase is.

But that to clean up a codebase requires even more people.

So, at first blush, it looks like "more people = more problems," but if you actually give yourself some breathing room, the code can get cleaner with effort.

colechristensen• 16 days ago

we will help independent creators succeed by providing open development tools and audiences to realize their vision.

Bravo!

Today, in some parts of the company, work passes through as many as 14 layers of management.

LMAO – reset approved.

coleca• 16 days ago

Unfortunately, the 14 layers of management are also responsible for deciding how the 14 layers will get cut. It's likely that all or most all of the middle management will survive but the ICs doing the real work will be the ones that take the hit.

I saw the same thing happen at Amazon. They claimed to be reducing layers of management in 2024/25, yet all that happened was a shuffling of the boxes on the org chart a bit and cuts to the ICs. Managers that had too many reports were forced to give some up for managers with too few, but most managers stayed in place.

0x4572• 16 days ago

It’s wild that we’re still unraveling the effects of COVID-19. It really feels like every video game exec convinced themselves the pandemic boom was permanent, and that we were all going to be stuck at home forever playing games.

etchalon2• 16 days ago

Microsoft just never sorted out their exclusivity problem, tried to acquire their way to it, only to then be stymied by regulators, all the while having second-best hardware compared to the PS5.

grg03• 16 days ago

It is neither possible nor desirable to own every great independent studio.

The sheer hubris. Yes, the monopoly is not desirable for gamers because the games end up all being the same MS-dictated corporate crap. Microsoft imploding is good for everybody in the long run and we can't wait for that day.

hbcdbff2• 16 days ago

“Resetting Xbox”

Gross and classless title. There was a time where people at least had the sense of shame to not do this kind of thing when firing people

OrangeDelonge• 16 days ago

Agreed, this is vile

idk1• 16 days ago

Yeah, it feels like a terribly inappropriate moment for a pun.

Unkn0wn-d• 16 days ago

as a player this feels like the confirmation of what we suspect since years, the gamepass math never closed. the sad part is the 3200 people paying the price for decisions they never took

rybosworld2• 16 days ago

A bit of a tangent but I'm surprised with how many layoffs tech has had the last few years, we aren't seeing the laid off folks form new companies.

xg15• 16 days ago

For that kind of announcement, I found it surprisingly open and detailed (at least if everything in there is true).

Still, some points are telling.

Our business today is not healthy. We are operating at margins that are 3-10x lower than comparable platform and publishing businesses.

So the layoffs are not because they're operating at a loss and had to cut costs urgently. The margins are there, they aren't even thin, they're just not thick enough...

In addition, Mojang and King will now report directly to me. These two studios have increasingly become platforms and are our largest by monthly active players. They bring critical geographic, demographic, and differentiation to XBOX.

Was a bit surprised that Minecraft got such a special status, but not at all surprised by King. All the studios getting nerfed, except the engagement maximizing mobile games...

johnnyanmac17• 16 days ago

Minecraft is an enormous game and the success of the movie among Gen Z/Alpha (a demographic that is fading from the silver screen) shows the potential of a multimedia franchise. It was by far their best purchase (and in some ways runs counter to the idea that "Not every studio fits with us".

But yeah, on the other end: 15 year old Skinner box experiment continues to Skinner box and remind us that war truly never changes.

groundzeros20158• 16 days ago

Companies do not exist to pay employees. There is significant risk and opportunity cost to running this business.

chris_wot2• 16 days ago

My son setup Gamepass a few years ago. It was the biggest rip off I've ever seen. So many things about Microsoft are out of kilter. I'm about to migrate my daughter away from a 3 year old Lenovo Yoga to a Macbook Air M5 - it's just too hard to administer, its now sluggish and the AI is completely in the way. She doesn't need it, and despite a few business practices of Apple I don't really like if I have to choose between them and Microsoft, then I choose Apple.

I was not like this as a teenager. I went through DOS, Windows 3.1x, Window 95, Windows 98, Windows 2000/XP and then all the way to Windows 7. I have completely changed my mind now, it's really only Apple I want to use. Everything about Apple is easier.

cantalopes• 16 days ago

Why not linux?

chris_wot2• 14 days ago

The hardware, software maturity (I’m looking at Gnome here), and lack of wanting tinker with the core OS and wanting to use an M5.

FWIW, in terms of software maturity - I think some might find that funny as I contribute to LibreOffice code :-)

taurath3• 16 days ago

We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes.

This is the new trendy management style - a few executive owners and then everyone else are expendable ICs, with almost no movement opportunity upwards. Only those on the Peter Thiel list or the equivilent among your private equity owners will be considered for key executive positions.

johnnyanmac17• 16 days ago

Sounds like an awful model for making a game if I understand the model correctly . Forget tight-knit, multidisplinary teams. Everyone's just a special cog to switch in and out from project to project, and laid off when we need a little bit better of an earnings call. Add in micromanagers and directors who need to have their fingers and every project (instead of focusing on the individual needs of a team and game), and you truly embrace the Microslop.

beezlebroxxxxxx• 16 days ago

The only benefit is, long-term, hopefulyy, the people ejected from this model can often end up forming their own indie teams and creating their own games.

Indie games are at an incredible place right now (I am aware it's crazy cut-throat, though). It would be nice to see what quality comes out in response to this disaster.

taurath3• 16 days ago

"I deal with the goddamn customers so the engineers don't have to. I have people skills, can't you understand that?? What the hell is wrong with you people!?"

madeofpalk2• 16 days ago

I'm sceptical of Hacker New's fascination with all managers being worthless, but I don't follow your logic here.

Why is "lets have more people who do things" a move away from multidisplinary teams? Unless you count being a middle manager a valuable discipline in game making?

catigula• 16 days ago

Paying people less and replacing them with AI is the literal explicit strategy; I get that this was supposed to be a cynical comment but it's basically just factual.

mrcwinn• 16 days ago

Give me a break. How many times has an IC complained about all the management layers to get something done? You can't have it both ways -- plenty of upward mobility, but no layers to the org.

groundzeros20158• 16 days ago

What does Peter Thiel have to do with Xbox? Are we just saying things we don’t like?

schnitzelstoat6• 15 days ago

He's referring to this list of invited guests: https://www.theguardian.com/commentisfree/2026/jun/24/peter-...

ButlerianJihad• 16 days ago

The crazy thing about Xbox games, or any game today, is that they require infrastructure, they require maintenance and subscriptions, and they require a constant release cycle, and moreover, a thriving community of humans who are playing the same exact game at the same exact real time as others. It seems like the primary lost art of gaming is single-player, offline, solitary modes.

Anyone could literally pick up an Atari 2600 from 1977, plug in a cartridge from 1978, plug it into a TV from 1981, and play the same exact video games with no problems. Now who will be playing the same Xbox games in the year 2076?

ifwinterco• 16 days ago

Yes, this is part of why I lost interest in video games (probably mostly just getting older if I'm honest).

However at the risk of sounding basic, RDR2 (2018) and Cyberpunk (~2022, once they fixed all the bugs) are both really good single player games that are a lot more fun to play than anything from 1980.

How many more of those will we see? Not sure

galleywest200• 16 days ago

This reads as someone who only looks at AAA major titles. The smaller games are the better ones in my opinion.

Nintendo games generally do not require maintenance or infrastructure. The vast majority of indie games do not require maintenance or infrastructure.

Telaneo5• 16 days ago

Can't say I'm surprised. I can't see a reasonable path for Xbox to do anything but just stay alive other than as MS's overarching gaming brand.

Xbox is on the losing side of the consoles, with no distinguishing features to speak of. You buy a console to play games and for it to be convenient. Xbox is no more or less convenient than a Playstation, and what few exclusives there are left are on Sony's side of the fence. Game Pass, while good, isn't really making money. What more is there to Xbox then (beyond the studios and such, which aren't Xbox themselves)?

hx84• 16 days ago

The people I know that like Xbox like Game Pass and Buy Once Play Anywhere. Xbox is the value proposition for people that want to play on Console + {PC/Handheld}.

Telaneo5• 16 days ago

Xbox is the value proposition for people that want to play on Console + {PC/Handheld}

Okay. Then who is that? Most of the people who play games who I know are either A.) Console gamers who only use PCs for work, 2.) PC gamers who don't see the point in a console, or III.) The top 1% who just go where the games are and are willing to spend to get there, and that group isn't generally a fan of not actually owning their games, nor are they very price conscious (they don't like higher prices, but they'll drop 400 USD to buy a PS4 and Bloodborne, since that's the only way to play that game).

I'm yet to see someone using Game Pass on a handheld.

So if that's the intended market, no wonder it isn't doing too hot.

TheBigSalad• 16 days ago

I like the idea of the next console supporting PC games. Xbox with steam and emulators right on my tv would be a dream.

Telaneo5• 16 days ago

I can't see this happening without either Windows getting in the way, negating much of the advantage of a console (have a look at the Windows handhelds and how they're not selling and how they're not a great experience), or Microsoft swallowing a massive part of their pride. Valve started directing work towards Linux literally because of Microsoft trying to close down the Windows ecosystem,[1] and Valve wanted an escape route if Microsoft decided to actually do that.

MS crawling on their knees to Valve to get them to cooporate on something (and Valve saying yes!), or MS figuratively doing the same by undoing all the problems MS have made for themselves with Windows and making a decent 10-foot UI so you'd actually want to use Steam on your Xbox, both seem incredibly unlikely.

Not to mention that this is more or less just admitting defeat for MS, leaving every single penny of profit in PC and Xbox gaming to Valve, other than what's directly tied to the hardware, which isn't where any of the profit actually lies.

[1] https://www.pcgamer.com/gabe-newell-i-think-windows-8-is-a-c...

frozenwind• 15 days ago

The Xbox series S is very convenient for me: it fits neatly in the TV stand which is quite slim.

bot41• 16 days ago

I’ve made the difficult decision to reduce our team by approximately 3,200 ... This will include approximately 1,600 role eliminations today
we are establishing a Chief Operating Officer with end-to-end P&L responsibility across content, hardware, platform, and services. Helen Chiang has been promoted to this role and will report directly to me

Seems tone deaf to do both of these messages at the same time.

nkrisc• 16 days ago

Reading this made me remember why I stopped playing my Xbox One: never-ending updates. I never played it very frequently so I disabled the sleep mode so it wouldn’t just stay on in my media cabinet heating my house. But of course that meant any time I spontaneously felt like using it there were 10 minutes of updates to download, so I would get annoyed and just do something else. Oh it can also play movies? Sorry movie night is ruined thanks to 30 minutes of downloading and installing updates. Eventually I just never turned it on again because all it did was download and install updates.

It really just killed all my interest in it because I couldn’t just turn it on and play a game unless I let it stay on all the time wasting energy and downloading constant updates in the background.

botanrice3• 16 days ago

Same boat as you. It's wild that I can turn on the xbox, wait 20-30min for mandatory updates, then need to re-sign in or occasionally reset my wireless mac address due to some bug, then re-sign into my Xbox account even if I am fine playing offline but of course I forgot my password so now I'm on my phone doing 2FA to remember which email I used to reset the password.

Then I will need to update the game I want to play (somehow FIFA 23 still requires updates?), then re-sign in to EA whose password of course I also forgot so now I'm on my phone resetting my password for EA.

Now it's been 45minutes and I'm frustrated and realize I could have loaded up Steam or Switch and been playing this whole time. Not to mention that once the Xbox itself is working it will be running slower than the Nintendo Switch I own which is only about 2yr newer than it. just a bad system!

I legit got my old PlayStation 2 back up and running so I wouldn't deal with this. (sorry been needing to vent all this lmao)

drewnoakes• 16 days ago

I wonder how many of these updates are security fixes. I wouldn't be surprised if a majority were.

Flere-Imsaho• 16 days ago

Reading this made me remember why I stopped playing my Xbox One: never-ending updates.

My experience with Steam is very similar (I don't have it run on startup because I like my PC to do other things from playing games).

Online updates really have ruined gaming for a lot of people.

Just like vinyl, humans seem to prefer a physical "thing" they pick up - put in the machine - and instantly have access to the "thing". It's simple, predictable, fixable (generally) and swapable. The digital revolution is not what we had hoped for...

shaewest• 16 days ago

I don't think you could say humans prefer a physical thing, as for a majority of mediums, digital is the winner, by a significant margin.

Of my friends who own vinyl collections, they almost always use Spotify/Apple Music 90% of the time.

operation_moose2• 16 days ago

I've been replaying a lot of Gamecube (emulated) games recently and its kindof shocking just how quick you can get into the game.

From hitting run Run to first Player Input is seconds in most cases. No console bootup, no system updates, no game patches, no agreeing to game EULA version 5.129912342, no denying the game access to online content on every third screen, etc.

I'm sure its loading slightly faster emulated, but 90% of it is just not having the junk that has accumulated over the last 20 years.

vachina• 16 days ago

Steam update is FAST. Less than 10 seconds and their CDN saturates any pipe. And since it’s a PC you can do other things while waiting.

Xbox is a dedicated gaming device and while the game/device is updating I’ll have to sit there. Plus the updates for some reason slows down the longer it takes. They’ve lost my attention.

opan2• 16 days ago

I check for game and system updates on my Deck before and after a session and it just takes a few minutes at most. I get excited to read changelogs if a game has a big update. These updates are not automatic/forced if you don't want them to be, and for singleplayer stuff at least you can just go play the old version if you're in a hurry or have little to no Internet.

zeratax6• 16 days ago

steam does not force you to update though. you can just start the game without updating. if it's multiplayer ofc it might require an update anyways

Ntrails• 15 days ago

I've never had a steam update take more than 30secs.

Game updates can take a lot longer if you need them (ie multiplayer) to play. idk

SebastianKra• 15 days ago

It's a combination of two things that never should have been normalized:

- Steam forces game updates, even for single player games.

- terrible delta updates. Baldurs Gate 3 had 8 patches in 3 Years. That's 800GB of updates.

If a patch drops on the afternoon you planned with your friends, you're not playing that night (actually happened to us). Both decisions should have caused outcries, but I guess people would rather overpay for fast internet contracts.

dom963• 16 days ago

I've had the same experience with my PS5. It wouldn't even let me play 007 First Light a few weeks ago because it needed to update the system. Starting to wonder if I should/could just keep it offline to stop it from updating incessantly.

CivBase• 16 days ago

It surprises me that there isn't simply an option to postpone the update for up to 12 hours until shutdown. I'd much rather let my system take 10 minutes to shutdown when I'm done than have to wait 10 minutes on startup before I can use it.

How often could they realistically have updates that seriously need to be installed ASAP? Especially if you're not even doing anything that requires going online.

wodenokoto2• 16 days ago

While there are plenty of online updates on the switch, I never remember not being able to play a game without first running an update.

dsign• 16 days ago

What are the updates for, I wonder?

Video games, like all forms of art, are about stirring emotions. I don't own, nor have never owned an Xbox. But when I think of the device the first thing that comes to mind is "Microsoft" and "Windows". So I consider all the little beancounters and MBAs at Microsoft who are always optimizing for profit and that have made Windows nightmarish, and I imagine them with access to an "emotions machine" they can manipulate to make number go up, and can't help but think that the device is a pocket dimension of hell but more or less useless otherwise.

All said, in order for Microsoft to fix XBox, they will also need to fix the Windows desktop experience. Otherwise people will think "ouch, I don't want to buy a cousin of that creature. Better go for a Nintendo or Steam Deck or something..."

Gigachad3• 15 days ago

These days it’s probably all CI automated. So your Xbox updating probably means dependabot bumped some package automatically and it got built and deployed despite zero end user impact.

Hugsbox• 16 days ago

This is what drove me to get a PS5. My xbox one would have 30 minute updates nearly every single night, and it doesn't allow you to access anything on the internet unless you let it do the updates. It was always inevitably at 7 or 8pm, when I'm trying to wind down after a day of work and just watch a show or a movie or something. It was a constant interruption to my daily routine - I like my shows before bed.

And then sometime in the last year and a half or so it became nearly unusable, constant crashes, poor performance, it was just such a constant pain in my ass. Feels like Microsoft just don't give a shit.

dzonga2• 16 days ago

Xbox lost their identity.

Xbox was a Live Games platform. they lost that identity trying to please everyone not their core audience.

compare to Nintendo - who stuck to their identity - as fun games first. graphics not necessary.

they can cut so many jobs - but unless they return to what makes Xbox great. the platform / ecosystem won't recover.

nonethewiser4• 16 days ago

They immediately benefit from cutting things that hemorrhage money. The consumer's opinion can worsen and it's still a good move. When you lose 64 cents for every dollar invested you can simply stop spending - it's that simple.

brcmthrowaway2• 16 days ago

This reads like pie in the sky MBA thinking

bronson• 16 days ago

In addition, Mojang and King will now report directly to me.

Darn it! The ONE studio that I really wanted them to set free and go back to how well things worked before, and they tighten their grip. Whyyyy?

abtinf2• 16 days ago

This likely represents increased freedom and faster decision making for Mojang and King.

Moving up the org reporting chain lets you do more, because you have fewer people to convince.

It’s not as good as being fully independent, but that will never be an option for Minecraft again. Actually being spun off might even be worse, because any new owner will be even more fixated on just the numbers.

markus_zhang7• 16 days ago

Probably because their game made the bucks?

brisket_bronson• 16 days ago

Some of you May Die, But it's a Sacrifice I am Willing to Make

guluarte• 16 days ago

At least they’re honest and not blaming AI.

EcommerceFlow• 16 days ago

This is great news for gaming. Xbox, which has ruined Halo, Gears of War, Mass Effect, and countless other IPs, needs to be burnt to the ground.

chamomeal• 16 days ago

The whole redfall thing was tragic. It was crazy watching Arkane become a laughing stock. Some of the most talented game devs ever. Prey, dishonored

CyanLite2• 16 days ago

GamePass has awful choices of game, save or one two. Nobody wants to pay $35 a month for games (that sporadically disappear) which can be purchased outright at full retail price for $70.

forbiddenvoid• 16 days ago

I mean, no one except the 30 million or so people who are paying for it. I'm quite happy with the GamePass selection, and I consider it an excellent value for me.

bobthebob2• 16 days ago

Right? Talk about losing the pulse here. Millions of people would rather pay monthly for thousands of games vs $70 for one?

jjcm2• 16 days ago

What's fascinating to me are the Valve comparables here.

<500 employees vs 18k at Xbox

17B ARR vs 20B ARR

At the end of the day there are two strong differences here. Valve has always been lead by people who were game devs, and have always conveyed a message that the gaming experience matters most. Xbox was led by Phil Spencer, who at least was known as being an avid gamer, but in his tenure pushed for things like xbox game pass to drive continual revenue and windows integrations that affected performance of games. Now it's being led by an industry outsider.

It boils down to trust in the end, and willingness to place profit over brand. If you look at the responses to this in r/xbox or other communities, it's overwhelmingly a stance of zero surprise. Xbox has always placed the business first, and this is the natural end of that mission - you get a bloated org with a platform that people don't end up trusting.

I do think resetting is the correct thing to do; there's no reason for Xbox to have 10k+ employees. Still it's another black mark against the brand. Also look at the framing of this message - it's about how their structure has affected the business. In this entire 47 sentence post, there is a single sentence that talks about the affect on the players:

That complexity has slowed decisions, blurred accountability, and made it harder to deliver for players.

It says a lot when the players are the secondary consideration.

mvdtnz9• 16 days ago

Valve doesn't make games. (within the margin of error).

jjcm2• 16 days ago

A non-trivial amount of their ARR is still from Valve-made games. Counterstrike still nets a bit over 1b per year from just case unboxings, and Dota is in the hundreds of millions. I wouldn't call 8-10% a margin of error.

qiine• 16 days ago

"Valve rarely releases games" would be more accurate

arm32• 16 days ago

Missed chance to call this a "Red ring of death".

frollogaston2• 16 days ago

From the title alone, I thought it was going to be a howto on fixing the red ring. My Xbox and my 360 still need some lifesaving care.

dcrazy4• 16 days ago

I fear the core gaming demographic is too young to get this reference.

frollogaston2• 16 days ago

This is an unusually candid public announcement

botanrice3• 16 days ago

who is Asha?

not a part of Microsoft, I find it weird a company leader wouldn't sign their whole name even if an internal memo.

pizzafeelsright• 16 days ago

She's an AI businesswoman doesn't play games.

"I'm not a gamer"

receipt: watch?v=o0hMSekk4XE

We are one console cycle away from fully AI generated gaming worlds and systems.

Their best bet is to make everyone a developer, let anyone build and launch games from their own console, and take a cut as a walled garden/ecosystem.

Keyframe2• 16 days ago

This reads like corporate death rattle. Microsoft never had any clue what it takes to make a console - a console. Now it seems they've also completely lost the plot on what makes a business - a business. They should've been Steam, instead they ran out of it.

menshiki• 16 days ago

Microsoft never had any clue what it takes to make a console - a console.

The 85 million people who've bought the Xbox 360 would disagree.

Keyframe2• 15 days ago

while impressive as a standalone number, half of it is in US. It launched a year ahead of competition at a much lower price and was when XBOX Live came about. And even with that - it couldn't make a dent in the dominance of of Sony and Nintendo in Japan, where in some cases it was fully discontinued early on and it was s series of missteps that led to where we are today. Microsoft never knew what they were doing. When it seemed like there was a success at hand, it was serendipity rather than Microsoft. Microsoft and their fundamental lack of understanding of gaming is what led to all of that.

excalibur• 16 days ago

Missed opportunity to put a red ring on the announcement. ⭕

_-_-__-_-_-• 16 days ago

I've got an original xbox, a PS2 and a PS1 all softmodded or mod-chipped with all the games I could never afford 20-25 years ago. I even have wireless controllers. I never worry about the console being connected to the Internet or maintaining a subscription.

throwaway63467• 16 days ago

I think now a console like the Ouya could really be successful, I find when they tried this 10 years ago it was the worst moment possible as game hardware was cheap and competition strong. Now with the AI boom eating all hardware capacity and indie game development going up like crazy it seems like a perfect moment to build a new hardware platform on affordable last gen hardware that runs indie titles.

msftgreed3• 16 days ago

This is purely greed on Microsoft's point. They absolutely have a profitable business with some great games, and they are sad that their management decisions led to this outcome.

But it's the rank and file who will pay the price for these poor management decisions. Like it always is.

To hear that the new boss wants to increase capitalization on Minecraft, to make it more like a Roblox, is horrifying and truly goes to show Xbox has leadership with near zero understanding of what they have or how to run it.

I wish good landings for all those affected, I hope for the best for all the studios whose future is uncertain now.

nonethewiser4• 16 days ago

Their margins are 3% and they lost 64 cents per 1 dollar invested. It's just the reality-facing move. Everything you want from XBOX becomes more possible (not necessarily likely, but possible) when they stop lighting money on fire.

greatgib• 16 days ago

They don't realized that it is their business decisions that ruined the experience of the console gaming and they probably still double down on that.

Before, you would buy and play a console to be able to play in a minute, eventually with buddy around. Playing time duration was a key metric in game reviews.

Now, as they want to milk us the maximum it is a nightmare, game are mandatory online, you wait minutes and even dozen of minutes to be able to play like 3 minutes rounds, you are constantly nagged with restrictions, hours updates in the middle of game that prevents you to play, they force you to subscribe, register, give up on your data and all, consent screens everywhere, upsell barriers everywhere, and little opportunity to play with your friends...

So, after a few months, everyone will lose interest in buying games and even play. It's not fun, lot of lost time and frustration.

canto• 16 days ago

They're just all in mobile and fsck you Diablo and Fallout fans. That's pretty much it.

accounting2026• 16 days ago

Don't know if it is just me, but seems like a weird thing to read on their official website. I could see it as an email sent out in crisis and maybe it would get leaked, but putting it up there yourself? I mean it has "Our business today is not healthy", "we have 14 management layers" and such. To me this comes across as a manager's "See mee, see me, I want the whole world to see me" more than actually trying to fix a problem

benguild• 16 days ago

The hardware side doesn’t make sense as much anymore. I mean if we have these massive cloud datacenters for AI and people can’t even have disc copies then why

mkhalil• 16 days ago

In this economy, if you're playing catchup to competitors you really can't have growth AND large profit margins. Why is that not obvious?

XBOX brought in 5 billion, and after all development costs, marketing, operating expenses, investment in research, etc., they are STILL left with 200 million dollars.

What's the problem here? Shareholder value? (as in the mythical/speculative value of MSFT, because OF COURSE they don't want/care for part of the profits/dividends)

If the money being invested in research has a good return - i.e. a great product/service is created - then you will grow.

Chopping down the employees here is a horrible move. Besides crashing employee morale into the ground, losing hard-to-replace developers/staff, it also generally gives off shitty vibes to consumers.

People will think why invest more into a failing entity? I can see people worried about the future of their "purchases" (if you can call them that these days).

This announcement so soon after XBOX had to start yelling "we are not shutting down" from the roof tops doesn't look good.

functionmouse• 16 days ago

if they fire everyone and stop spending money, only making money, their PnL ratio will be infinite!

kermatt• 16 days ago

The layoffs will continue until morale improves.

ghaff2• 16 days ago

Xbox is a sideshow at Microsoft at this point--and arguably has been one for a very long time. Yes, it brings in non-trivial revenue but not a lot of profit. I don't really expect that you'll see new Xbox-related development in a few years.

wewewedxfgdf• 16 days ago

Microsoft has blown Windows and blown Xbox.

ZiiS2• 16 days ago

The writing was on the wall for Windows two decades ago; I am more impressed they dragged it out this long. It was probably decisions around 2010 in the lead up to the Xbox One that have now eventually killed them.

chupchap• 16 days ago

As an occasional gamer I hate modern big budget games as it takes me 15minutes to get gaming between launcher, updates, loaders and other distractions. It then takes me another 15minutes to get back to speed on which mission I was working on. By then I have 30 minutes left to game. Due to this, I frequently pick up older snackable games and skip AAA games altogether.

stevage• 16 days ago

Our business today is not healthy. We are operating at margins that are 3-10x lower than comparable platform and publishing businesses. We

Oof. We're making money, but we want to make more. So we're firing people.

rubicon33• 16 days ago

We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes

Fascinating. The death of management is happening all throughout software.

yashthakker• 16 days ago

This feels less like an AI story and more like a "subscription strategy met reality" story. Xbox spent years buying studios and subsidizing Game Pass to chase a Netflix-for-games future. When subscriber growth slowed, the economics stopped working. The layoffs are unfortunate, but they seem more like the consequence of executive-level strategic bets than anything individual studios or developers did. It's a reminder that distribution models are often much harder to reinvent than they look on paper.

uni_baconcat• 16 days ago

That’s a rough reflection to the second half of Phil Spencer’s leadership.

markus_zhang7• 16 days ago

Scott Miller on X said that many, if not most of ID was also let go.

https://x.com/ScottApogee/status/2074198967550685268

urbnspacecowboy2• 16 days ago

Entire post text:

This post was about the insider news I got this morning that a majority of Id's studio is being laid off, including most (if not all) coders.

johnnyanmac17• 16 days ago

Damn, not ID. Some of the best engineers in the industry and they are all nearly gone?

Not to mention the legacy. Some of those people may have been there for over 25 years, in times where the idea of programming for a dedicated GPU was cutting edge. Absolutely crazy how little respect the industry has for these golden geese.

tills13• 16 days ago

Even in the age of AI how the hell can you make a game without programmers?

urbnspacecowboy2• 16 days ago

Some specifics from George Broussard: https://x.com/georgebsocial/status/2074282537946386833

I've seen comments like "the MS layoffs weren't so bad".
re: id software.
Reports are that 50% (95ish of 200) of the studio was laid off. Here are some quotes on other details:
“Tools, programming (except a couple), Quake Champions team, testing team. All gone.”
“Yeah seems like all they left was leadership and art/design. I think Xbox forgot quakecon is next month.”
It really does sound as if id is now a support team for Bethesda/others. Rip idTech, which was amazing. Maybe Machine Games will carry it on or maybe it will be dropped for future games?
But the read is that id is essentially dead. At least for the time being. Yes, the studio wasn't closed and half still have their jobs. That's great.
re: the studios set free by MS to be sold or mgmt returned. One view is this is great. For MS they get decent PR for being "good guys". But the truth is that in at least one case (and maybe others), retaining the IP in such a case was written into the original contract when MS purchased them. Second, these studios now are out of the MS lifeboat, on their own, and will have short time to find new deals or funding and they will make it or not. Never mind they sold to MS originally to avoid this grind and be 'safe'. Yes they have a second chance but more layoffs may simply be deferred and outside the current umbrella of today's layoff round, so MS doesn't really get the bad PR of simply shutting studios down. This means continual worry by the employees and stress for mgmt.
re: Arkane. Same as the above but timing and process is different due to French labor laws, etc.
The layoffs are still happening. A substantial portion of Obsidian was let go today (near 1/3). Worries that they now don't have the staff to complete current projects. Deep layoffs at Zenimax Online. Even Bethesda or Activision studios were hit (with a minor round and numbers that are small enough that it reads more like "everyone has to take a hit, even the star studios"). More details will emerge, but it's a lot of people.
So it's bad. Real bad. Good luck to all affected.

jordwest2• 16 days ago

While those businesses have created meaningful value, they did not grow at the pace we expected.

That this is seen as a problem tells you everything about business today.

It has to be explosive growth or it’s pointless, according to execs and shareholders.

altairprime2• 16 days ago

The velocity up or down of { the rate of growth of profit } is the profit-linked factor that drives stock prices go up or down. Not the simple velocity of profits. The market demands corporations compete with cumulative interest to increase share prices, and that’s never a sustainable path.

jordwest2• 16 days ago

Ah wow of course, I think you just made something click for me.

It's strange how we take interest on cash as a law of nature, when the original intention might have been nothing more than compensation for the risk the lender was taking on.

Now the risk (on bank deposits, govt bonds etc at least) has effectively been removed so the interest rate is the baseline expectation.

So compound interest is underpinning the infinite growth forever delusion...

bschwindHN• 16 days ago

Microsoft, as always, has no taste. And they think they can MBA their way into making fun games.

The Xbox was my main gaming platform from around 2005 to 2018, and the experience got worse and worse as time went on. At this point in time, I really don't know why you would choose an Xbox over another console or just PC gaming.

They can try to "reset" but from the outside it just looks hopeless as long as Microsoft is involved.

I'll stick with Steam and Nintendo consoles. At least Nintendo still recognizes the importance of a fun gameplay loop, even if they struggle at other things like good online services.

whatever12• 16 days ago

Ha! The new boss of Xbox surely has innovative ideas! Layoffs, how nobody had thought about this before?

In every single case layoffs degrade the company’s core product. Unless they plan to completely change the XBox business (for example to one that sells hotdogs), this move will make XBox worse.

matchbok3• 16 days ago

Except in the many, many cases where layoffs help the company focus on a core product.

whatever12• 16 days ago

Name 1 case that we can evaluate 10 years after the layoffs.

beart4• 16 days ago

I agree with your sentiment, but not your conclusion. The new boss is being paid millions to explain that 14 layers of management is a bad idea... I'm sure there are thousands working in the xbox division that could have told you that one for free.

rudimentary_phy• 16 days ago

Honestly, they could try building an interface that doesn’t suck. I have no idea why Valve seems to be the only one doing this.

I’ve found a lot of things just from browsing the Steam store page. I don’t think I’ve ever done this with any of the others, console or otherwise. They are painful to use.

The manager ratio still sounds too high even after the changes as well. Too many managers can really slow down and demoralize a creative workplace.

zkmon• 16 days ago

I put her in the league of Marissa Mayer (Yahoo), Rometty (IBM) and Jane (Citi) - all came with a mandate to revamp the whole thing.

ahmeni• 16 days ago

weird how improving business always just seems to be labour cuts with sugar on top

findthebug• 16 days ago

Sold my xbox and going back to ps5.

nananana92• 16 days ago

You've changed, Microsoft. Saving the console is trivial, they're just afraid to do it.

"Minecraft and CoD are now Xbox exclusive".

antiframe4• 16 days ago

If I am unable to play Minecraft any longer because I have to buy a shit ass XBOX, I will never buy another piece of software (or hardware) from them. My $5 in 2009 came with a guarantee I would have access (and free updates) to Minecraft forever. Microsoft not honoring that agreement, which they said they would, is a step too far. I already signed up for a shit ass Microsoft account to keep access, and I said to myself that was the last hoop I would jump through.

nananana92• 16 days ago

Microsoft not honoring that agreement, which they said they would, is a step too far.

They already took that step too far - they broke ToS and closed all MC accounts that weren't linked to a MS account within the timeframe.

I'm obviously not saying I'd like them to make everything an Xbox exclusive, but it's the only play that makes sense after throwing $75B to buy Activision.

Alien1Being4• 16 days ago

"Today, in some parts of the company, work passes through as many as 14 layers of management. "

Microsoft is today's IBM.

And elephants cannot dance...

rustystump3• 16 days ago

- We are operating at margins that are 3-10x lower than comparable platform and publishing businesses

What comparable platform is there? Are they thinking netflix? God i hate corporate execs like this.

groundzeros20158• 16 days ago

I don’t know if it’s due to the subject matter but it seems there is a lot of confusion and low quality comments. Here are some reminders:

- businesses like Xbox try to make as much money as possible

- investments are judged on risk adjusted return. Net returns with high risk is failure.

- the risk free asset pays about 3%. So taking any risk better get you 6-10%

- you can lose your job at anytime for any reason. Any other expectation will lead to disappointment.

IshKebab2• 16 days ago

you can lose your job at any time for any reason.

Depends on where you are.

groundzeros20158• 15 days ago

I see no difference in this story between where studios are and the challenges facing their employees.

It’s the basic fact that you are in an organization which may change direction. And you do not control that organization.

mdavid626• 16 days ago

I expected an article about resetting an Xbox device.

andai• 16 days ago

How many of those 14 layers are getting cut?

wodenokoto2• 16 days ago

Of course we have to see how it plays out in reality, but giving back all IP and a runway to complete planned games to game studios as they are "released" from Microsoft is a really nice gesture, not just for the studios but also for the fans.

Most companies would just shut it down and keep the IP.

sidcool• 16 days ago

When all other revenue sources dry up, workforce cutting is the only thing that remains. Bosses and Wall Street loves it.

bni• 16 days ago

Go back in history, why did Microsoft create xbox at all?

It was Bill Gates fear of being overtaken by some "living room PC" or set top box that never materialized. It was an industry wild goose chase basically, with echos of past efforts (remember Philips CD-i ?)

Is this a concern Microsoft has today? xbox was a money sink from the beginning.

The sad part is they bought a bunch of very good game studios.

Alien1Being4• 16 days ago

Shutting it down or selling it to Bytedance is probably next.

d--b• 16 days ago

Today, in some parts of the company, work passes through as many as 14 layers of management.
We will reduce management layers to no more than 5, and where possible, 3

I don’t understand why they need to make a big announcement when what they’re doing is cutting the stupid management structure. Everybody hates cuts, except those that cut middle management.

They should have titled this “xbox cuts middle management: Less burocracy, faster delivery, more original games, more money for everyone involved, yay!”

rock_artist• 16 days ago

I saw already lots of comments about Nintendo, but one interesting bit I didn't see yet in comments here is the fact Nintendo just raised base salary.

https://mynintendonews.com/2026/06/26/nintendo-has-raised-it...

egorfine• 16 days ago

I seriously don't get it.

A mass layoff without blaming AI? Are they that backwards?

gehsty2• 16 days ago

I feel like the way Asha talks about Xbox owning game studios could also be applied to Microsoft Xbox. Pc gaming and console gaming has never been closer. Is it advantageous to own two essentially competing platforms?

Is console gaming really a core pillar for Microsoft? Should they kill Xbox, fall back to the (I imagine) hyper profitable platforms of Mojang and King, and focus on making windows gaming as good as it can be, which I think would tie in with the overall improving windows strategy.

They aren’t Sony, they aren’t Nintendo, they aren’t Steam, and I feel like the only unique thing they have is the Windows + PC gaming (that Valve are working hard to erode). If they have any chance of making a viable platform, for me, it needs to be in this space.

Alien1Being4• 16 days ago

They had 20,100 employees at one stage.

( Xbox plus the Microsoft Gaming )

That is around the same size as Finland's military....

fragmede• 16 days ago

How many employees would you have allowed them to have instead?

coffeebeqn2• 15 days ago

That’s the size of active duty but it’s a conscript army so in case of a war there would be a general mobilization of the 900k trained conscripts

akimbostrawman• 16 days ago

Industry crash has been long overdue. Turns out making games for "modern audiences" mostly funded by ESG isn't economically viable yet.

grugdev42• 16 days ago

Too little too late. Xbox is dying and PS won.

Try listening to your customers next time.

We don't want to be ripped off with paying for assets we don't own.

We don't want another monthly subscription.

We want the old games, remastered, with fully functioning multiplayer.

destring• 15 days ago

We don't want to be ripped off with paying for assets we don't own.

You do know that PS is literally stopping physical games? You will not own anything.

krige4• 15 days ago

Too little too late. Xbox is dying and PS won.

Seems like currently PS is too determined to snatch defeat from the jaws of victory.

ewy1• 15 days ago

crazy second sentence which makes the rest of the comment not make any sense

itomato2• 15 days ago

No “reset” can fix the Red Ring of Death.

itomato2• 15 days ago

MSFT used to be flat. What happened?

lovegrenoble• 15 days ago

It becomes a problem for consumers when Xbox lays off large numbers of employees and closes studios, leading to fewer games and poorer support for them.

maxehmookau• 15 days ago

A year-long restructure, where over 1000 people could lose their jobs is beyond disgusting. There's zero justification for it. Ever.

ghtbircshotbe• 15 days ago

They depict how Microsoft bought double fine at the end of the psychonauts 2 documentary. If you watch the documentary it's hard not to think it may not have been a genius financial decision.

Heidaradar• 15 days ago

I wonder if Sony / Playatation is having the same issues or not

jackdoe• 15 days ago

there is only so much attention/time human beings have

games are competing with netflix competing with tiktok competing with sleep

    Johnny Mnemonic: Yeah, the Black Shakes. What causes it?
    Spider: What causes it?
    [points to various pieces of equipment throughout the room]
    Spider: This causes it! This causes it! This causes it! Information overload! All the electronics around you poisoning the airwaves. Technological fucking civilization. But we still have all this shit, because we can't live without it. Let me do my work.

armoredmeatball• 15 days ago

Is anyone familiar with the history of Xbox? I'm wondering how their margins became so much worse than their competitors

steve19773• 15 days ago

We will reduce management layers to no more than 5, and where possible, 3. We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes.

This does sound quite reasonable actually.

Also, I think I didn't read "AI" anywhere, which is refreshing.

ambicapter• 15 days ago

The great thing about not making any money in a department is that all the money-hungry people flee the org, and people who are more invested in "doing things right" stick around. The bad news, of course, is that you're not making any money, which is bad for your long-term survival.

lostglass• 15 days ago

This is a very different take than I have. People who are good tend to leave sinking ships much faster.

steve19773• 15 days ago

I guess it becomes a problem when the money-hungry people still make money, but the larger organization doesn't.

khurs3• 15 days ago

Elephant in the room?

Maybe Microsoft is spending so much on AI that it is being forced to re-evaluating short term strategy in other business areas as financial have changed.

So perhaps in long term all these studio's making exclusives and getting people hooked on the Game Pass at a short term low price would have worked if they had dominated market share over playstation. But AI Data Warehouse & Power Plants funding and taking large stakes in multiple AI companies has depleted the cash.

And harder to raise money now hype is clearing and expectations of what AI can actually deliver are lowering, as per OpenAI's struggle to IPO.

ninefathom• 15 days ago

This is a very long-winded demonstration that the shareholder-driven philosophy of "we must keep growing at all costs" is not sustainable.

tibbydudeza• 15 days ago

That is retailer margins.

SaucyWrong• 14 days ago

Read all of this as: “I am currently mismanaging this business unit.”

Resetting Xbox

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