# AJS News- The XBOX DISASTER!! BETRAYAL, HUGE Layoffs, Cancels Perfect Dark, Everwilds & Zenimax MMO! Source: https://www.youtube.com/watch?v=4LhY82e09Tg Recap page: https://rapidrecap.app/video/4LhY82e09Tg Generated: 2025-07-17T05:37:33.337+00:00 --- ## Quick Overview Microsoft's Xbox division implemented massive layoffs and canceled multiple high-profile games and studios, including Perfect Dark and Everwild, despite reporting record company-wide profits and Phil Spencer's claims of the gaming division being "stronger than ever." **Key Points:** - Microsoft laid off 9,000 employees, with a significant portion from gaming, following 10,000 cuts in 2023 and 2,500 in 2024. - Xbox canceled Perfect Dark, Everwild, and an unannounced Zenimax MMO, and closed studios like The Initiative, Alpha Dog Games, and Roundhouse Studios. - Phil Spencer claimed, "The gaming division has more players, games, and gaming hours than ever before" and "the Microsoft gaming line has never looked stronger," contradicting the mass layoffs. - Microsoft reported "record performance" in 2024, with over $245 billion in annual revenue and $109 billion in operating income. - Arcane Studio founder Raphael Colantonio criticized Game Pass as an "unsustainable model" that is "increasingly damaging the industry," arguing it cannot coexist with other models. - Techland canceled two games mid-development but retained all employees, moving them to other projects like Dying Light, contrasting with Microsoft's approach. - EA announced the sunsetting of Anthem servers in January 2026, a game described as "legendary for all the wrong reasons" due to its troubled development and release. **Context:** The gaming industry faces significant shifts, with major corporations like Microsoft implementing widespread layoffs and canceling projects despite reporting record profits. This trend raises concerns about corporate priorities, employee welfare, and the long-term health of game development, particularly following large acquisitions like Microsoft's purchase of Activision Blizzard. The discussion also touches on the sustainability of subscription models like Game Pass and the fate of long-running live-service games. ## Detailed Analysis Microsoft's Xbox division is undergoing significant turmoil, marked by extensive layoffs and numerous game cancellations, despite the company reporting record financial performance. Microsoft laid off 9,000 employees, with a substantial portion from gaming, adding to 10,000 cuts in 2023 and 2,500 in 2024. The company canceled high-profile projects like Perfect Dark and Everwild, and an unannounced Zenimax MMO described as a "Destinyesque third-person shooter MMO with a sci-fi noir aesthetic." Microsoft also closed several studios, including The Initiative, Alpha Dog Games, and Roundhouse Studios, and reportedly laid off nearly 50% of Turn 10 staff. This comes as Microsoft CEO Satya Nadella reported "record performance" in 2024, with over $245 billion in annual revenue and $109 billion in operating income. Despite these cuts and cancellations, Xbox head Phil Spencer claimed, "The gaming division has more players, games, and gaming hours than ever before" and "the Microsoft gaming line has never looked stronger," statements the hosts found contradictory. Critics like Arcane Studio founder Raphael Colantonio argue that Game Pass is an "unsustainable model" that is "increasingly damaging the industry." In other industry news, EA announced the sunsetting of Anthem servers in January 2026, a game described as "legendary for all the wrong reasons," while Subnautica 2 saw its studio leadership gutted by Krafton for "renewed energy and momentum." Conversely, Techland canceled two games mid-development but retained all employees, moving them to other projects, a practice highlighted as a positive contrast to Microsoft's approach. ### Xbox's Corporate Restructuring - Microsoft laid off 9,000 employees, including significant cuts in its gaming division, following 10,000 layoffs in 2023 and 2,500 in 2024 - The company closed multiple studios including The Initiative, Alpha Dog Games, and Roundhouse Studios, and reportedly laid off almost 50% of Turn 10 staff - Even successful divisions like King (Candy Crush) saw 10% staff reductions, impacting 200 people. ### Major Game Cancellations - Xbox canceled Perfect Dark, Everwild, and an unannounced Zenimax MMO described as a "Destinyesque third-person shooter MMO with a sci-fi noir aesthetic" - The Perfect Dark project, developed by The Initiative, was closed despite a seemingly finished "vertical slice" trailer - The Zenimax MMO, internally praised by Phil Spencer, was being developed by a team of 300 employees now gone. ### Microsoft's Contradictory Statements and Financial Performance - Microsoft CEO Satya Nadella reported "record performance" in 2024, with over $245 billion in annual revenue (up 16%) and $109 billion in operating income (up 24%) - Despite record profits, Xbox head Phil Spencer stated, "The gaming division has more players, games, and gaming hours than ever before" and "the Microsoft gaming line has never looked stronger," while simultaneously announcing mass layoffs and cancellations. ### Industry Reactions and Criticisms - Arcane Studio founder Raphael Colantonio criticized Game Pass as an "unsustainable model that has been increasingly damaging the industry for a decade" - Colantonio believes Game Pass "cannot coexist with other models" and will eventually lead to gamers hating its effects on games - The layoffs and studio closures fulfill concerns raised during the Activision Blizzard acquisition about Microsoft consolidating IPs and then reducing staff. ### Other Gaming Industry News - EA announced the sunsetting of Anthem servers in January 2026, allowing players to use remaining in-game currency until then - Subnautica 2's studio leadership (designer/director Charlie Cleveland, CEO Ted Gill, co-founder Max Magcguire) was replaced by Krafton for "renewed energy and momentum" - Techland canceled two games mid-development but retained all employees, moving them to other projects like Dying Light, contrasting with Microsoft's approach.