Microsoft is all but declaring \u201cGame Over\u201d on Xbox.\u00a0<\/p>\n
Xbox CEO Asha Sharma announced plans to eliminate about 20% of the gaming console\u2019s staff by the end of fiscal 2027, starting with 1,600 Xbox employees who got the pink slip yesterday. Across Microsoft, 3,200 total jobs were eliminated, with 6,400 total planned, or about 3% of the wider company.<\/p>\n
The layoffs are part of a massive restructuring<\/a> meant to reset Microsoft\u2019s struggling gaming biz. The company will also sell off four game-making studios and consider parting ways with a fifth.\u00a0<\/p>\n Stuck at the Same Level<\/p>\n Sharma took the Player 1 controller as Xbox\u2019s CEO in February and has already decided the company needs a hard reset. She wrote in a memo last month that annual revenue fell by half a billion dollars over the past five years despite the company pouring in $20 billion. Microsoft also spent a whopping $69 billion acquiring \u201cCall of Duty\u201d publisher Activision Blizzard in 2023.\u00a0<\/p>\n Xbox\u2019s problems aren\u2019t a new game. It has been losing the console wars to competitors Sony and Nintendo, whose PlayStation 5 and Switch 2 have dominated.\u00a0<\/p>\n While rivals captured more playtime from Xbox over the years, AI simultaneously ramped up the difficulty mode:<\/p>\n Demand for AI chips has caused a crunch for the gaming industry, which needs high-tech chips to power its games. Console makers have raised their prices in turn: Sony jacked up prices of its PlayStation 5s by $100 to $150 this spring, while Nintendo said the price of the Switch 2 will jump by $50 this fall. Sharma said last month Xbox expects its memory and storage costs to be five times higher in 2027 than they were last year.<\/p>\n At the same time, AI is starting to revolutionize how games are made. Last year, the Indie Game Awards retracted the prestigious Game of the Year Award from \u201cClair Obscur\u201d for its use of generative AI. Microsoft\u2019s chief people officer said roles aren\u2019t being replaced<\/a> by AI but did caveat that \u201cAI is changing how work gets done.\u201d The company has set aside $190 billion for AI.<\/p>\n Low Score: Xbox had already shifted its priorities away from physical consoles and toward its gaming subscription service Game Pass, which has less than half<\/a> the subscribers the company had targeted this year. Under previous CEO Phil Spencer, Xbox scooped up smaller studios to create games for Game Pass and compete with indie titles known for low costs and high returns \u2026 when they\u2019re hits. Sharma said it\u2019s not possible<\/a> to compete with indie studios and major game publishers at the same time and Xbox will instead focus on the latter. Mojang and King, the businesses behind \u201cMinecraft\u201d and \u201cCandy Crush,\u201d will report to Sharma.<\/p>\n","protected":false},"excerpt":{"rendered":"Microsoft is all but declaring \u201cGame Over\u201d on Xbox.\u00a0 Xbox CEO Asha Sharma announced plans to eliminate about…\n","protected":false},"author":2,"featured_media":97524,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[29539,420,7829,2005,1297,320,7828,17754,39879,7357,11721],"class_list":["post-97523","post","type-post","status-publish","format-standard","has-post-thumbnail","category-microsoft","tag-activision-blizzard","tag-azure","tag-azure-ai","tag-gaming","tag-layoffs","tag-microsoft","tag-microsoft-ai","tag-nintendo","tag-playstation","tag-sony","tag-xbox"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/97523","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=97523"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/97523\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/97524"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=97523"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=97523"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=97523"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}