Xbox restructuring: what does this mean for gamers?
Intelligence Summary
- Discover the impact of Xbox’s recent restructuring, including layoffs and what it could mean for the division’s future.
In brief
- Microsoft has recently laid off 1,600 Xbox employees, with another 1,600 layoffs expected before the end of the fiscal year.
- Obsidian Entertainment has laid off a quarter of its staff and canceled Avowed 2.
- Bethesda Game Studios has raised concerns about the future of The Elder Scrolls 6 following the recent layoffs.
GAME-scanner analysis
Microsoft’s recent restructuring of its Xbox division is a major move that affects not only the company’s internal operations, but the wider gaming industry as well. The layoffs of 1,600 employees are a direct response to a worsening financial situation, with the Xbox division under pressure from declining revenue and a hardware crisis. This has led to the cancellation of major projects such as Avowed 2, putting Obsidian Entertainment’s future at risk.
The appointment of Asha Sharma as CEO of Xbox earlier this year marks a new direction for the company, but the question remains whether these changes will be enough to get the division back on track. The possibility that Microsoft is considering positioning Xbox as a standalone subsidiary could also point to a strategic shift in its approach to gaming.
What does this mean for players?
For gamers, this restructuring means uncertainty. The cancellation of projects and the layoffs could lead to a drop in the quality and quantity of future games. Players looking forward to titles like The Elder Scrolls 6 may need to prepare for delays or even changes in the development of these long-awaited games. The future of Xbox and its exclusive titles now depends on how effective the new strategies implemented under Asha Sharma’s leadership turn out to be.
Timeline
2026-07-09: 1,600 employees are laid off at Xbox.
2026-07-09: Another 1,600 layoffs are expected before the end of the fiscal year.
2026-07-08: Asha Sharma is appointed CEO of Xbox.