Xbox loses five studios: Who will create new video games now?

Xbox has recently experienced a significant loss of five studios, leaving many to wonder who remains to develop new video games for the platform. Amid ongoing layoffs within Microsoft’s Xbox division, approximately 3,200 staff members have been affected, although no studios have been shut down. Instead, five studios have chosen to separate from Xbox, either becoming independent once again or being acquired by other entities.

With the reduced workforce and departures of these studios, Xbox is now facing limitations on its game development capabilities. This situation is in stark contrast to the ongoing jokes about Sony’s PlayStation 5 lacking games, as Xbox has undergone significant restructuring, with over 9,000 layoffs in the past three years, leading to the closure of various studios. As a result, the pool of developers available to create games for Xbox has significantly diminished.

Asha Sharma, the head of Xbox, has indicated a desire to refocus the company on core franchises, aiming to expand Xbox services to reach a daily audience of over a billion people. However, this goal seems ambitious given the current state of affairs within the business.

Remaining studios within Xbox and Microsoft include The Coalition, formerly known as 343 Industries and responsible for the popular Gears Of War series. The Coalition continues to work on its next project, the prequel game Gears Of War: E-Day, set to launch in October. Despite efforts to reposition Gears Of War as a key franchise for Xbox, the series has faced challenges in terms of sales. Similarly, Halo Studios, previously 343 Industries, is dedicated to the Halo franchise, with its recent project, Halo: Campaign Evolved, garnering good pre-order numbers.

Furthermore, inXile Entertainment, acquired by Microsoft in 2018, is preparing to release Clockwork Revolution, an action role-playing game slated for 2027. However, Xbox’s decision to make this game an exclusive may limit its reach and impact on hardware sales. Obsidian Entertainment, another Microsoft acquisition, has released several new games, including The Outer Worlds and Grounded 2, with plans for upcoming projects that may be subject to changes under Xbox’s new strategy.

Playground Games, a British studio known for the Forza Horizon series, has become a standout developer within Microsoft’s first-party lineup. The studio’s success with the Forza franchise has catapulted it to prominence within Xbox’s portfolio, surpassing the popularity of Halo and Gears Of War.

As Xbox navigates this period of transition and change, the future of its game development remains uncertain. With key studios departing and a refocused strategy on core franchises, Xbox faces challenges in maintaining its position within the competitive gaming market. It remains to be seen how the remaining studios will adapt and evolve to meet the demands of Xbox’s new direction.