Under the guise of the great Xbox reset, Asha Sharma's big scissors have cut heavily among the internal studios. While none of the studios that were in danger of being closed will actually be shut down, which is indeed amazing news, some of the most successful teams remaining inside Xbox and Bethesda have been severely affected by layoffs, according to reports.
Obsidian Entertainment, for instance. The Californian studio has been one of the most productive since it joined Xbox in 2018, releasing The Outer Worlds 1 & 2, Grounded 1 & 2, Pentiment, and Avowed. Granted, none have been runaway successes (except for the first Grounded, to a degree), but the games were still well received. And yet, according to Kotaku, the team is losing 25% of its staff, with cuts affecting all departments, including quality assurance, artists, writers, programmers, and producers. The report adds that work on Grounded 2, which is still in early access, and the promised The Outer Worlds 2 DLCs will continue. Still, an insider at Obsidian questioned how the studio will be able to pursue its ambitious list of projects with a quarter of its staff gone.
Another historic studio's future is in question. id Software (DOOM, Quake) is not closing down, but Jason Schreier said they were forced to cut a significant number of its staff. Scott Miller, one of the founders of Apogee/3D Realms, added that most, if not all, of the studio's coders are reportedly gone. The fear in this case is that id Software may become a support studio for MachineGames, helping them create new DOOM, Quake, and Wolfenstein games, which are apparently still part of Sharma's new Xbox plan. Even so, that's a massive blow to a legendary team that also released successful games with the last three DOOM games. By the way, Revelations, the DLC to DOOM: The Dark Ages, is out today and could be their farewell as a lead developer.
Lastly, there's ZeniMax Online Studios, which was already impacted last year with the cancellation of its promising Project Blackbird game and the subsequent layoffs that affected its team. The studio has been hit hard again this year, which the team admitted will impact the previously announced 2026 roadmap for The Elder Scrolls Online:
As we get ready to launch Season One this week, we wanted to reaffirm our commitment to The Elder Scrolls Online. Our team’s immediate focus is on launching Season One, which we're all excited for you to jump in.
Looking beyond Season One, the roadmaps we previously shared will be shifting. We want to take the time to evaluate the work in front of us and then lock down an updated schedule. While we'd love to share a concrete details today, stepping back to get our plans straight will let us come back to you with a clear timeline.
The Elder Scrolls Online has consistently been among the most successful live service games in Xbox's portfolio. Moreover, Sharma is said to be betting heavily on the Elder Scrolls IP, and yet even that wasn't enough to prevent this unfortunate situation.
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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