Tensions are very high among Xbox developers after the latest round of Microsoft layoffs, which appears to have removed hundreds of jobs across the whole gaming division. The Initiative and its Perfect Dark reboot are no more; ZeniMax Online's upcoming MMORPG, Project Blackbird, was canceled, and the studio founder left; Rare's new IP, Everwild, was also canceled, and veteran Gregg Mayles also left; and Turn 10 also saw the majority of its employees fired.
But it does not stop there. Engadget has reported that five employees were also cut from Halo Studios. Furthermore, the report doesn't paint a favorable picture of both Microsoft's overall plans for gaming and the progress of future Halo projects.
The anonymous source understandably expressed contempt for Microsoft Gaming CEO Phil Spencer's internal memo, which the executive started with the reminder that Xbox is registering record numbers when it comes to users, games, and gaming hours.
I'm personally super pissed that Phil's email to us bragged about how this was the most profitable year ever for Xbox in the same breath as pulling the lever. I wasn't sure what part of that I was supposed to be proud about.
The source also said that Halo Studios is now working with contracted studios across the United States and Europe, which they didn't really like.
Xbox in general feels years behind the curve in game development, and it leads to a lot of wasted time and effort.
The kicker came when they shared the impression that Microsoft is trying to replace as many human jobs as possible with AI.
They're trying their damndest to replace as many jobs as they can with AI agents.
It is no secret that Microsoft has invested heavily in AI, and this very possibility has been dreaded for years. Whether it's actually the case remains to be seen, but it's certainly a worrying report.
Lastly, the anonymous source wasn't confident that one of the Halo projects currently in the works will meet the expected standard of quality:
I don't think anybody is really happy about the quality of the product right now. There's been a lot of tension and pep talks trying to rally folks to ship.
Just two days ago, Halo Studios teased a reveal for their next project coming at the HaloWC 2025 event, which will take place in October. Needless to say, they cannot afford another blunder after Halo Infinite, else they might find themselves in the same position as Turn 10 - or even The Initiative - after the next Microsoft review.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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