It is known that 3,200 employees are losing their jobs at Xbox. However, according to industry expert Jason Schreier, this is only the tip of the iceberg. The “bloodbath” is expected to cost many more people their jobs.
What is the situation? Just like last year, Microsoft is also conducting extensive layoffs in the Xbox division this summer. 1,600 employees are losing their jobs immediately. Another 1,600 positions are expected to be eliminated in the current fiscal year.
As part of this wave of layoffs, several first-party studios are being let go, including Ninja Theory, Compulsion Games, and Double Fine. However, developer teams that are still expected to develop games for Xbox in the future are also affected. There have also been extensive layoffs at ZeniMax, id Software, and Obsidian. This means, for example, that the future of Elder Scrolls Online is currently completely uncertain.
The Tip of the Iceberg
Who else is affected? Jason Schreier addresses this in his new video on YouTube. The industry journalist from Bloomberg has established a name for himself in recent years through his various investigative reports. There are hardly any other insiders who are as well-connected in the gaming industry and who know exactly what is going on in the studios.
Schreier explains that many game projects today are not only worked on by the main responsible studio but often also by many external partners. Therefore, when a project is completely shelved, it does not only affect the developers directly associated with the game.
The same applies to Xbox’s external partners, who have supported with PR or other tasks. Here, Microsoft also aims to cut a large portion of its investments in the future.
You can also watch the over 16-minute long video below:
Suddenly, these outsourcing teams lose a crucial planned source of income. As there is typically no replacement project ready to compensate for the loss, this often leads to layoffs as well.
According to Schreier, the affected employees from the external teams are said to face another problem: they are often bound by non-disclosure agreements (so-called NDAs) and are not allowed to document in their portfolio which project they last worked on or why they were laid off when searching for a new job.
In the current market situation, where studios are laying off more often than hiring, this is considered a clear disadvantage. Often, those who have been laid off must prepare for a long job search if they want to continue in the gaming industry.
Unlike the official figures from Microsoft, the affected employees from the external partners cannot be summarized under a single number. According to Jason Schreier, this number is expected to be significantly higher than the 3,200 currently reported.
In the second-to-last video from Jason Schreier, he discussed the strategies of the industry’s big players and why a company like Xbox, EA, or Sony must inevitably focus on expensive AAA games instead of releasing many smaller gems: Blizzard almost wasn’t allowed to make Hearthstone because it defies an industry law
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