Xbox’s ‘reset’: all the news about Microsoft’s layoffs and studio changes – The Verge

The next Xbox could play every Xbox game ever made

2026-08-04T12:25:45-04:00

The next Xbox, Project Helix, could theoretically have the largest library of any home console. Not only will it play PC games, but we now know, courtesy of a leaked memo obtained by The Verge's Tom Warren, that it will run games from every generation of Xbox: the original 2001 Xbox, the 2005 Xbox 360, the 2013 Xbox One, and the 2020 Xbox Series, as well as any new Helix titles.

We already knew that Microsoft was bringing a limited sample of original Xbox games to PC, and we already knew it was prepping a way to digitize your Xbox One and Xbox Series discs. The leak fills in the missing puzzle pieces.

Microsoft is bringing Xbox 360 games …

Read the full story at The Verge.

Xbox CEO lays out priorities in memo after major ‘reset’

2026-07-31T05:28:15-04:00

Asha Sharma. | Image: The Verge, Microsoft

After a massive Xbox "reset" that laid off thousands of employees and spun off four studios, Xbox CEO Asha Sharma wants to get Xbox back to growth. In a memo obtained by The Verge, Sharma told staff by the end of fiscal year 2027 (which runs through next June), "we will return XBOX to player and revenue growth." Xbox will also "improve profits back in line with industry averages," Sharma said. "Every function and studio will own part of that outcome."

Since taking over Xbox in February, Sharma has made sweeping changes to attempt to turn things around. Previously, she has cited challenges like a low accountability margin, increasing compone …

Read the full story at The Verge.

Xbox revenue drops 10 percent as Microsoft’s cloud and AI business surges

2026-07-30T05:39:42-04:00

Xbox is having yet another tough quarter, as revenue from content and services like its Game Pass subscription dipped 10 percent over the past few months. At the same time, Xbox hardware sales declined 13 percent, according to Microsoft's fourth-quarter earnings report released on Wednesday.

The news comes just weeks after Xbox head Asha Sharma announced a "reset" plan for Xbox that included sweeping layoffs and the spinoff of four games studios, including South of Midnight developer Compulsion Games and Psychonauts creator Double Fine Productions.

Sharma has also made some other big changes to Xbox, including lowering Game Pass prices, te …

Read the full story at The Verge.

Bethesda teases Fallout 5 soon after Xbox’s mass layoffs

2026-07-17T11:30:07-04:00

The Fallout TV series. | Image: Amazon

Xbox is currently in a "reset" period that includes laying off around 3,200 employees over the next year, involving deep cuts at beloved studios like id Software and Obsidian Entertainment. Now, in an attempt to show that things are still running fine, the company has announced a slate of upcoming projects at Bethesda Game Studios - which itself was hit with layoffs - including official confirmation that Fallout 5 is in the works.

"We're investing more deeply in the worlds players love, giving creators a bigger role in shaping their experiences, and bringing our teams closer together so we can get our games into your hands sooner, support t …

Read the full story at The Verge.

Doom’s new expansion shows just what makes id Software special

2026-07-10T14:17:25-04:00

This week should have been a celebration for Doom developer id Software. The studio just launched Revelations, a meaty expansion for Doom: The Dark Ages that adds a powerful new weapon and more demonic levels to blast through. Even though I hadn't picked up The Dark Ages for more than a year, it only took moments before I fell right back into the familiar loop from id's modern Doom games. Each plays differently, but they all have a similar foundation built around fast-paced shooter action that makes them feel iconically Doom - and unlike pretty much anything else.

But instead the launch has been overshadowed. As part of Xbox's mass layoffs …

Read the full story at The Verge.

Microsoft’s Xbox reset is pivoting Obsidian to make Fallout instead of Avowed

2026-07-08T14:50:27-04:00

As part of Microsoft's big Xbox "reset," which includes layoffs affecting 3,200 staffers, jettisoning studios, and shifting investments to focus on "higher priority projects," Obsidian Entertainment is changing its plans. The studio, behind games like Grounded and The Outer Worlds, is starting work on a new Fallout title and has canceled "multiple projects," including a sequel to last year's Avowed, according to Bloomberg.

Despite the success of the Fallout TV show, which is getting a third season, Xbox hasn't released a new game in the series since 2018's Fallout 76. Josh Sawyer, Obsidian's studio design director, will head up the new Fall …

Read the full story at The Verge.

If Microsoft sold off Xbox, who would even buy it?

2026-07-08T13:13:07-04:00

This week, Microsoft took a huge ax to its Xbox business. The company announced that it would be laying off 1,600 workers now, 1,600 more over the next fiscal year, and that it would be shedding four studios. Xbox CEO Asha Sharma hasn't been shy about why she's making such dramatic cuts, saying in a memo that the business is "not healthy." Speaking to Fortune, she said that "we simply spread ourselves too thin."

Given the scale of the changes and Xbox's currently vague strategy of focusing only on big games, it's unclear just what the future of the platform is. As Microsoft invests much of its resources into everything AI, a struggling cons …

Read the full story at The Verge.

Doom developer id reportedly cut in half as part of Xbox layoffs

2026-07-07T12:23:14-04:00

As part of the mass layoffs hitting Xbox, Doom developer id Software has laid off around 50 percent of its staff, according to Game Developer. One source claimed to the publication that the cuts equate to more than 90 redundancies. Another source said that id's QA department was significantly impacted. The report was published the same day that id is releasing a major expansion for its latest Doom game.

A former id employee affected by the cuts, Michael Maynard, corroborated the figure in a LinkedIn post, saying that the layoffs affected "roughly" 50 percent of the company. "We created arguably THE BEST first person engine technology in the …

Read the full story at The Verge.

Xbox’s bold plan for the future sounds nearly impossible

2026-07-06T20:17:59-04:00

It's another bad week for the video game industry. Microsoft outlined a series of layoffs on Monday that Xbox CEO Asha Sharma described as "the most significant restructure in Xbox history." But buried in Sharma's memo was a curiously optimistic statement: "I want Xbox to be one of the few companies that entertains more than a billion people each day and gives everyone the opportunity to create and connect," she wrote.

Xbox has been a shambling mess after Microsoft spent billions of dollars with little to show for it, and now it aims to reach a much bigger audience with a much smaller team, amid one of the most challenging times in the ind …

Read the full story at The Verge.

Former Xbox studios Double Fine and Compulsion will keep games after going indie

2026-07-06T12:49:42-04:00

Microsoft is spinning off four of its Xbox game studios - Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs - as part of the restructuring announced today. However, two that are going independent, Double Fine and Compulsion, will get to keep their franchises and games catalogs, according to Xbox CEO Asha Sharma.

"Compulsion Games and Double Fine Productions will return to management and transition to independent studios with their IP, catalog, and runway for their next games," Sharma says in a memo.

Compulsion and Double Fine have also shared statements about their futures.

Here's Compulsion's:

When Compulsion Gam …

Read the full story at The Verge.