Xbox Fumbles Again With Layoffs at 343, Bethesda Game Studios and The Coalition

When the year started, things were looking slightly up for Xbox. No, it hasn’t completed its acquisition of Activision-Blizzard, nor did it show anything major or noteworthy at The Game Awards (let alone in the weeks prior). But there were rumors of a Direct-like showcase, which it officially confirmed as the first-ever Developer_Direct. Airing on January 25th, this 40-minute event would feature titles like Forza Motorsport, Redfall, and Minecraft Legends.

More importantly, the official Xbox blog in Germany indicated that we would be getting release dates for all these titles. Starfield won’t be present at the show, but it’s getting a separate showcase at a later date. Considering the utter lack of big-name exclusives in more than a year, having some quality titles to look forward to in the coming months sounds nice, especially since Xbox committed to launching these games before June 31st, 2023.

While the Developer_Direct is still a bright spot for Xbox, it can’t hide the dreary and dismal shadow that the company continues to cast with its gaming efforts. In recent news, Microsoft laid off 10,000 employees due to “macroeconomic conditions and changing customer priorities.” Bloomberg’s Jason Schreier reported that Bethesda Game Studios and 343 Industries were affected, while Kotaku added The Coalition to the list.

For those following the tech industry, such layoffs probably aren’t surprising, as employees for Amazon and Meta also faced the same. There have been warnings of a recession for months, after all.

However, these feel like another stumbling block for the company that’s been struggling to find its footing for years in gaming. 343 Industries was reportedly “hit hard” by the layoffs, and though multiplayer support will continue, the campaign team has suffered greatly. Creative director Joseph Staten, arguably the biggest driving force in pushing Infinite towards the finish line after so many troubles, has also left and rejoined Xbox’s publishing arm.

343 Industries has faced backlash since Infinite’s initial gameplay reveal. The worst was last year due to content and feature delays and the cancellation of features like split-screen co-op. Things seemed to be on the right track following the release of Forge, and the team was still committed to its 2023 roadmap.

Halo Infinite - Season 2 Lone Wolves_02

Many of the issues at 343 weren’t necessarily the studio’s fault – much has been said about Microsoft’s policies when it comes to contractors. They could only be hired for 18 months, after which a mandatory six-month break is required. Instead of retaining said contractors as employees, they would be churned out in favor of new ones, causing major issues for Infinite’s development and content plans.

Former senior multiplayer designer Patrick Wren criticized the “incompetent leadership up top” for 343’s state. In recent tweets, he said, “The layoffs at 343 shouldn’t have happened, and Halo Infinite should be in a better state. The reason for both of those things is incompetent leadership up top during Halo Infinite development causing massive stress on those working hard to make Halo the best it can be.” He noted, “The people I worked every day with were passionate about Halo and wanted to make something great for the fans. They helped push for a better Halo and got laid off for it. Devs still there are working hard on that dream.’

The departures from Bethesda Game Studios also come at a concerning time. Yes, Starfield is getting a showcase and still reportedly launching in the first half of 2023. But let’s not forget prior reports from employees who told Schreier of the problematic state of the game when its initial launch date was revealed. It’s reportedly garnering positive impressions from play-testers, but time will tell.

When Xbox announced the acquisition of several studios like Ninja Theory, Compulsion Games, Playground Games, and Undead Labs in June 2018, it was viewed as a positive first step for the company’s lackluster first-party support. The addition of companies like inXile Entertainment and Double Fine, not to mention the establishment of World’s Edge and The Initiative, were also viewed positively. Of course, it only continued to expand with the acquisition of ZeniMax Media and its studios including Bethesda, Arkane, and many more.

state of decay 3

But despite a burgeoning Game Pass, which saw significantly reduced growth in subscribers last year, it still struggled with its first-party offerings. Projects like State of Decay 3, Compulsion Games’ next title, Fable, Perfect Dark, Senua’s Saga: Hellblade 2, and Everwild continue languishing without updates.

Reports of troubled development, whether it’s Everwild seemingly having no clear vision or numerous departures from The Initiative, also circulated. Allegations of sexism and a toxic work environment at State of Decay 3 developer Undead Labs were reported, with Microsoft reportedly not responding to employee concerns quickly enough.

Of course, there’s also its acquisition of Activision-Blizzard last year for $68.7 billion. What appeared as a major power play quickly spiraled into controversy, with Xbox and PlayStation fighting over future deals surrounding Call of Duty. Previously estimated to close by the middle of this year, the acquisition is facing an investigation from the UK’s Competition and Markets Authority and an antitrust lawsuit from the United States Federal Trade Commission.

Suffice it to say that if Microsoft goes to court, it could take even longer to close. But there’s something especially odd about laying off tens of thousands of employees and struggling to deliver titles while it unsuccessfully pursues an acquisition for tens of billions of dollars.


Despite how significant the doom and gloom may be, Xbox isn’t in the worst way. It had successes like Halo Infinite and Forza Horizon 5, and last year saw the release of titles like As Dusk Falls. Game Pass continues to be extremely popular for tens of millions of players and serves as a platform for indie games to gain exposure. Starfield is still a hotly anticipated title and could very well be one of the biggest releases of the year in terms of sales.

When it comes to Xbox’s gaming plans, however, it still feels like the company is trying to get its feet off the ground. A lot of the hype and promises come off as talk without addressing the core fundamental issues underlying the lack of releases or the well-being of its employees. Meanwhile, Sony is preparing to launch PlayStation VR2 in February with several exclusives, never mind the high-profile titles coming to PlayStation 5 later this year, like Marvel’s Spider-Man 2 and so on.

Perhaps we’ll see a significant shift at Xbox’s Developer_Direct with firmer commitments to its current releases. Maybe there will be fewer “world premieres” and more announcements with actual gameplay and tangible release windows. Xbox has been playing catch-up with its game offerings for a while now – if there’s ever time it should show up, both for its fans and employees, 2023 is it.

Note: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, GamingBolt as an organization.

* This article was originally published here


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