Xbox Layoffs Reportedly Include Shutdown of Physical Release Teams, Acti-Blizz User Support

Over the past week, Xbox fans have been thrown into turmoil by rumors that indicated everything from Starfield, to Indiana Jones and the Great Circle, to the Gears of War franchise may jump to PlayStation and other platforms. Some leakers have since walked those rumors back, saying Starfield making the jump is unlikely, but the horse is already out of the barn and speculation about the future of Xbox is running wild. Microsoft itself hasn’t exactly doused those flames, as they haven’t stepped into deny anything, but instead promised a “business update event” for this week.

Microsoft’s decision to lay off over 1,900 employees across Xbox and Activision Blizzard only three months after acquiring the latter has been cause for plenty of debate, and it seems U.S. government officials were definitely keeping an eye on the situation. While the Activision Blizzard acquisition has officially gone through, the U.S. Federal Trade Commission has not given up their fight against it, filing appeals to block and reverse the deal as recently as this past December, and now they’ve filed a complaint about the recent Activision Blizzard layoffs. According to the FTC, the layoffs directly contradict statements that Microsoft made to them that Acti-Blizz would be operated independently at arm’s length, with no redundancies between the two companies.

Nintendo recently shared their earnings for the third quarter of their 2024 fiscal year (which runs from April 1, 2023 to March 31, 2024) and, as we reported, it was a good three months for the company with the Switch inching closer to edging out the PS2 as the best-selling console ever. Overall, the first three quarters of FY2024 have set a record for the company, with them bringing in ¥408 billion (or about $2.8 billion). But what about what comes next?

Microsoft Corp.'s plans to cut 1,900 jobs from its video game division contradict statements the company made to a US  court that it would operate the newly acquired Activision Blizzard Inc. independently, the US Federal Trade Commission said Wednesday.

Following the most recent round of layoffs from Microsoft's Xbox division, details about Blizzard's in-development survival game, Odyssey, have now leaked online. Microsoft first announced the major layoffs earlier this week, reporting that 1,900 employees from the company had lost their jobs as a result. The layoffs reportedly saw particularly heavy impact on Microsoft's gaming division, with Activision Blizzard, Xbox, and ZeniMax reportedly seeing the brunt of the layoffs. Now, one of the casualties of the layoffs comes as an in-development survival game from Blizzard.

Blizzard Entertainment's survival game, which it informally announced in 2022, was reportedly canceled over engine issues during its six years of development, according to a new Bloomberg report. This report follows yesterday's news that Microsoft is laying off 1,900 employees across its Xbox, Activision Blizzard, and ZeniMax divisions. Alongside this news, Blizzard president Mike Ybarra also announced he was departing from the company, and we learned the aforementioned survival game had been canceled. 

The first month of 2024 isn’t over yet, but it’s already been a brutal year for the games industry, with thousands of people having lost their jobs in a barrage of industry-wide layoffs. Microsoft recently added a significant chunk to that number when it announced that it would be cutting 1,900 jobs across its entire gaming division, and it seems those layoffs are also going to come at the cost of the company’s physical distribution.

Microsoft recently announced widespread layoffs, confirming that it was cutting 1,900 jobs across its entire gaming division– which, following the company’s $69 billion acquisition of Activision Blizzard, also includes Blizzard Entertainment. The layoffs have also gone hand-in-hand with the cancellation of Blizzard’s long-in-development survival game, codenamed Odyssey, which was officially confirmed to be in development in 2022, and a new report published by Bloomberg’s Jason Schreier has shed more light on what brought about the highly anticipated project’s cancellation.

One area hit during the recent round of layoffs at Microsoft were the departments focused on bringing physical Xbox games to retail. On January 25, word began circulating that Microsoft Gaming was laying off a massive 1,900 employees from its 22,000-person team. A large portion of this number apparently is coming from the customer service group at newly acquired Activision Blizzard, which up till now was known for having relatively solid customer service.

Microsoft will let go of 1,900 employees at Activision Blizzard and Xbox this week, it said on Thursday, the latest cuts in the technology sector that has extended massive layoffs over the past years into 2024.

The recent layoffs across the various Microsoft studios include the vast majority of the customer service team at Blizzard. This means the multiple live service games run by Blizzard are currently operating with next to no moderators, game masters, and customer service representatives.

The development team behind Blizzard's now-cancelled survival game, reportedly called Odyssey, is seemingly among the teams dramatically impacted by the layoffs at Microsoft today.