Microsoft has recently laid off many employees, with approximately 1,900 job positions being eliminated from its gaming division. According to journalist Jez Corden from Windows Central, these job cuts include shutting departments physically distributing Xbox games. While this move does not necessarily imply that Xbox is abandoning physical media altogether, as the company might still outsource distribution to external partners, it does raise questions about the direction of Microsoft’s overall strategy.
Microsoft has led the change from physical to digital media in the gaming industry. This shift is exemplified by the Xbox Series S, which is entirely digital, and recent leaks suggesting the development of a mid-generation, digital-only version of the Xbox Series X. Additionally, the highly anticipated game, Senua’s Saga: Hellblade 2, will be released solely in digital format in May.
Microsoft has not yet confirmed the effects of the layoffs on its physical games division. However, the impact of the company’s restructuring is starting to become apparent. As a result of the layoffs, an undeveloped survival game by Blizzard Entertainment has been canceled. This decision is attributed to challenges with the Synapse engine that Blizzard uses. Additionally, Mike Ybarra, the president of Blizzard Entertainment, has announced his departure from the company.
Multiple sources tell me that Microsoft is laying off the entire internal customer support team(s) for ABK games, save a few.
MS will outsource the rest to external companies abroad.
ABK was one of the few games pubs with a high-quality internal customer support team.
— Jez (@JezCorden) January 25, 2024
