Xbox Cuts 3,200 Jobs, Sells 4 Studios
Microsoft's Xbox division is undergoing a significant restructure, cutting 3,200 jobs and selling four game studios, including Double Fine and Ninja Theory, due to low profit margins.
Key points
- Xbox CEO Asha Sharma announced the cuts, citing low profit margins of 3-10x lower than comparable platform and publishing businesses.
- 3,200 jobs will be cut, with 1,600 layoffs happening immediately, and four studios, including Double Fine and Ninja Theory, will be sold or spun off.
- Double Fine and Compulsion Games will return to independent ownership, while Ninja Theory and Undead Labs will be sold to new owners with funding to complete their current games.
- The cuts are part of a broader effort to reset Xbox's content portfolio and improve profitability, with a goal of reaching over a billion people per day.
- The layoffs will affect around 20% of Xbox's workforce, with the remaining jobs being eliminated over the next year.
- Microsoft's gaming division has struggled with low profit margins, losing 64 cents for every dollar invested, and is seeking to restructure and focus on more profitable areas.
Microsoft's Xbox division is undergoing a significant restructure, with 3,200 job cuts and the sale of four game studios. The cuts, announced by Xbox CEO Asha Sharma, are due to low profit margins, with the company operating at margins 3-10x lower than comparable platform and publishing businesses.
The four studios being sold or spun off are Double Fine, Compulsion Games, Ninja Theory, and Undead Labs. Double Fine and Compulsion Games will return to independent ownership, while Ninja Theory and Undead Labs will be sold to new owners with funding to complete their current games, Senua and State of Decay 3.
The cuts are part of a broader effort to reset Xbox's content portfolio and improve profitability. Sharma stated that the company's gaming division has struggled with low profit margins, losing 64 cents for every dollar invested. The goal of the restructure is to reach over a billion people per day and improve the company's profitability.
The layoffs will affect around 20% of Xbox's workforce, with the remaining jobs being eliminated over the next year. The company is seeking to restructure and focus on more profitable areas, and the sale of the four studios is seen as a key part of this effort.
Sources
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