Xbox's planned 3,200 layoffs by July 2027 are already easily the biggest round of layoffs the industry has ever seen if taken at mere face value, but Bloomberg's Jason Schreier argues that's just the proverbial tip of the iceberg.
In a new YouTube video, the journalist highlights the "hidden cuts" of the many contractors that were linked to a canceled project. Nowadays, triple-A game development involves several studios working together, some of which are external. For example, he reveals that the Perfect Dark reboot wasn't developed solely by The Initiative and Crystal Dynamics: sister studio Eidos Montréal was also involved, as were other unnamed teams.
What people don't know is that there were other studios working on that game, too. I can't name them all because I haven't confirmed every single one with 100% certainty, but, for example, Eidos Montreal, which is kind of a sister studio to Crystal Dynamics, also had some people working on Perfect Dark. And there are others out there, too, other work-for-hire studios that were working on that game. And as a result, they also had to lay people off.
Schreier goes on to explain that, in a way, those developers were in an even worse situation because they couldn't simply put "worked on Perfect Dark" on their portfolio, as they may have signed NDAs (non-disclosure agreements) that prevent them from doing so.
Similar ripple effects are believed to follow Obsidian's canceled projects (including a Shadowrun title, according to another rumor): co-development partners can lose work and may need to cut staff even though they are not counted in Microsoft's headline total.
They [Obsidian] canceled a few games, and those games, at least one of them, maybe multiple of them, I'm not 100% sure, but those games were also in development with codevelopment partners. And so those codev partners are now in a position where they're getting their game canceled. They're losing money. They can't afford to keep people employed. They have to cut jobs, and the people who are being cut can't actually say what they were working on.
Lastly, Schreier also pointed out that Sharma's public memo about the big Xbox reset included a line about reducing the vendor spend by 50%. That essentially means cutting a lot of jobs from outside vendors that, however, worked closely alongside Xbox, possibly in departments like marketing and PR.
We may never know the full tally, but the cost of this reset definitely numbers in many thousands of jobs affected.
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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