Microsoft’s recent decision to lay off around 9,000 employees across various departments has notably impacted its Xbox division. This move indicates a profound shift that may have serious implications for Xbox Game Pass, which is central to Microsoft’s gaming strategy. The intention behind Xbox Game Pass is to create a subscription model akin to Netflix, providing subscribers with day-one access to new games and a vast library of titles.
To make this strategy successful, sustaining a consistent influx of new games is crucial. Microsoft has pursued significant acquisitions to secure high-profile releases for Xbox Game Pass, exemplified by Bethesda’s Starfield and Activision’s Call of Duty: Black Ops 6. Moreover, Microsoft established its own studio, The Initiative, with expectations of producing new games for Xbox and Game Pass.
Recent successes for Xbox Game Pass have raised optimism, but the scale of the layoffs raises concerns about its future. Some have compared this moment to the “Avengers: Endgame” in the Marvel Cinematic Universe, suggesting that Xbox Game Pass might experience a subsequent slump. The layoffs have led to the cancellation of key projects like the Perfect Dark reboot and Rare’s Everwild, leaving consumers anxious about Microsoft’s ability to follow through on its promises and eroding confidence in Xbox Game Pass.
After the layoffs, industry giants such as Bethesda, Halo Studios, and Blizzard have also felt the effects, diminishing the workforce behind major franchises. The situation has even affected Call of Duty studios, raising further alarms given the franchise’s history of generating substantial revenue. With a new Xbox console set to be released, these layoff decisions cast doubt on the potential of Microsoft’s gaming hardware and leave fans worried about the long-term viability of Xbox Game Pass.