Xbox Layoffs Just the Beginning of a Publisher-Wide Catastrophe; Arkane, Bethesda, id, BioWare, and PlayStation Studios Are Also at Risk

RUMOR ASSESSMENT

85%

Highly Likely

Source 5/5

Corroboration 4/5

Technical 4/5

Timeline 4/5

We had been waiting for the Xbox layoffs news since last week, and a few hours ago, several trustworthy sources started reporting that Compulsion Games, Double Fine Productions, and Ninja Theory are all at risk of being shut down, though they are currently trying to negotiate alternative solutions (like being sold or going independent).

However, according to French journalist Sylvain Trinel from BFM TV, this may well be the beginning of a publisher-wide catastrophe. He namedropped a lot of studios that might soon be affected by either studio closures or layoffs, and they were a mix of studios notoriously in financial difficulty and a few unsuspecting ones:

• Arkane Lyon
• Bethesda Game Studios
• id Software
• BioWare
• Don't Nod
• Quantic Dream
• PlayStation Studios

Let's delve into each case.

• Arkane Lyon, according to Trinel, is at real risk of being shut down. This isn't technically a new rumor, as there have been plenty of hints in that direction. Following the Xbox Games Showcase earlier this month, insider Jeff Grubb said their next project, Marvel's Blade, might be dead, though he later retracted the claim. Then, yesterday, Insider Gaming's Mike Straw named Arkane Lyon alongside Compulsion Games as two of the studios "scared" of being closed shortly. As a reminder, its sister studio, Arkane Austin, was shut down following the failure of Redfall. Arkane Lyon released Deathloop in 2021, which was well received critically but didn't sell well, and has since worked on Marvel's Blade, which, as a licensed game, comes with additional costs.
• Bethesda Game Studios is perhaps one of the most perplexing. After all, we just heard from Xbox CEO Asha Sharma that she wants to increase funding for the biggest IPs, and then we learned Elder Scrolls and Fallout were chief among them in her list. This should point to the studio scaling up, not down, especially as it approaches the crucial development phase for The Elder Scrolls VI. BGS also supports Fallout 76, but that game is going well, so it wouldn't make a lot of sense to cut that team, either.
• id Software is also certainly a bit of a surprise. The studio's latest game, DOOM: The Dark Ages, certainly performed at least adequately, and it's getting a DLC next month. Perhaps they will soon cancel an unannounced project?
• Moving out of Xbox's internal studios, BioWare is not a surprise in that their last two to three games haven't sold nearly as much as publisher Electronic Arts had hoped. However, the Canadian studio had already suffered several rounds of layoffs and, as last year, was believed to have fewer than 100 employees. More layoffs would inevitably raise many questions about the next Mass Effect game, which they have been working on for a while now.
• Don't Nod is also no surprise. Despite releasing some gems like Banishers: Ghosts of New Eden, none of the French studio's recent launches have sold well enough. It is believed that the studio's cash reserves will run out by November, and its previous investor, Tencent, does not seem interested in coming to the rescue this time around.
• Quantic Dream is another studio that's been known to be in a heap of trouble. The development of Star Wars: Eclipse, the studio's first action/adventure game, has progressed at a snail's pace; the MOBA Spellcasters Chronicles was shut down after a few months, and parent company NetEase is reportedly looking to sell the French developer.
• Finally, Trinel also mentioned that there would be trouble at PlayStation Studios. A fellow X user guessed it might be Bungie and Housemarque due to the lower-than-expected sales of Marathon and Saros, respectively, though the French journalist replied to keep an eye out, but not necessarily for those studios. When we look at other teams that Sony might trim down, Media Molecule is certainly a strong candidate, as they haven't released anything since 2020's Dreams (which was financially unsuccessful). Then there's Haven Studios; their heist shooter, Fairgames, was rumored to be transformed into an extraction shooter, but maybe that didn't convince Sony.

Overall, Trinel reckons we'll hear more about these layoffs and studio closures before the end of the month, as publishers attempt to get leaner before the end of the current fiscal year and the beginning of the new one. Unfortunately, this might result in thousands of layoffs across the game industry.

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