It's not over—reports warn of more cuts on the horizon at Microsoft, citing a company structure spread too thin

Gaming IndustryIt’s not over—reports warn of more cuts on the horizon at Microsoft, citing a company structure spread too thinWhen you purchase through links on our site, we may earn an affiliate commission.Here’s how it works.

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(Image credit: Microsoft)

Phil Spencer giving a talk on stage, wearing a t-shirt with an �X� on it.

“History doesn’t repeat itself, but it often rhymes.” That’s an idiom I’ve got rattling in my head while the games industry stares down the barrel of further cuts at Microsoft’s gaming division, which is presently citing eerily familiar reasons for its alarmingly-rapid contraction.

Last year saw The Embracer Group (a company with a similar appetite for acquiring game studios) stumble out of aflubbed $2 billion deal, stagger around for a whileshedding studiosandlaying off staff, then finally drop—splitting intothree pieceswhen it hit the ground—almost a full year later. Widespread criticism followed from players and developers at large, with plenty of jabs fired across the aisle, bothsubtleandblunt.

Now, with Microsoft’s shock closure of studios includingArkane Austin and Tango Gameworks, we’re solidly into ‘time is a flat circle’ territory. This isn’t even the first tolling of the bell—in January, a rash of layoffs shocked over1,900 Blizzard and Xbox employees, prompting the cancellation of Blizzard’s no-longer-upcoming survival game.

According to the report, Xbox’s president Matt Booty talked about how thin-spread the company was, like “peanut butter on bread”, adding that understaffing was a concern across multiple studios. Similarly, Bloomberg states that ZeniMax Studios' Jill Braff added: “It’s hard to support nine studios all across the world with a lean central team with an ever-growing plate of things to do … I think we were about to topple over.”

The layoffs predominantly hitting Blizzard earlier this year, as tragic and as frustrating as they were, do feel like a case of grim cause and effect in hindsight. Any large-scale acquisition will come with restructuring, especially when $68.7billiondollars was spent to make it happen.

Yet looking at the latest wave of studio closures, as well as the prospect of likely having to come up with yet another headline about layoffs and cuts next week, I can’t help but think about that number—$68.7 billion, an amount of money no human mind is even capable of visualising properly.

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I also think about Embracer, I feel like I’m watching the same car-crash happen all over again in slow motion⁠—fingers crossed that somebody might have worn their seatbelt this time. Did Microsoft, like The Embracer Group, bite off more than it could chew when it dropped $68.7 billion on Blizzard—with all of its other freshly-acquired “Team Xbox” studios paying the price?

Here’s hoping that Microsoft’s Xbox division gets back on its feet. Not for the interests of the company itself, or the shareholders, but for the many studios and developers under its umbrella wondering presently how many axes need to fall before someone, somewhere, can look at a spreadsheet and say ‘you can stop holding your breath until next time’.

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