Microsoft's impending layoffs at Xbox are partly designed to allocate resources to Halo and other franchises, according to multiple insiders. The games industry is bracing for massive layoffs this month as part of CEO Asha Sharma's promise to 'reset' the company.
Cutbacks and Studio Closures
While the full extent of these cutbacks is yet to be confirmed, Microsoft has already pulled funding on a project from IO Interactive, developer of 007 First Light, and two high-profile executives left Xbox last month. According to Windows Central editor Jez Corden, Xbox is 'very heavily evaluating how Halo is run' as part of these layoffs, although he clarifies that developer Halo Studios is 'not in negotiations to shut down'.
'Some of these cutbacks revolve in allocating resources towards fixing Halo,' Corden added on X. This was corroborated by Halo insider Rebs Gaming, who shared Corden's post, adding: 'Part of the reason for the Xbox layoffs and studio closures is providing more funding/support to Halo and other iconic franchises.'
Focus on Key Franchises
There have already been reports that Sharma wants to accelerate development on Halo, The Elder Scrolls, and Fallout. The Elder Scrolls 6 was announced by Bethesda in 2018 and still lacks a proper trailer, while there hasn't been a mainline Fallout game since 2015's Fallout 4, despite the success of the TV show. A new Elder Scrolls and Fallout seem guaranteed to sell well, but Halo is in a trickier position.
The series has struggled to stay relevant since developer Bungie left the franchise after 2010's Halo: Reach. The last entry, 2021's Halo Infinite, had a mixed reception, and its separate multiplayer component quickly faded due to poor post-launch support. A big litmus test of Halo's popularity today will be the response to Halo: Campaign Evolved, launching on July 28 across PlayStation 5, Xbox Series X/S, and PC. The remake is doing well with pre-orders, but much of that may be due to curious PlayStation owners who have never experienced the franchise before.
Studios at Risk
As for which studios could suffer at the expense of this shift, Ninja Theory, Double Fine, Compulsion Games, Undead Labs, and Arkane are all reportedly on the chopping block. Although none of them will necessarily be shut down, Microsoft is purportedly looking at ways to either sell them off or help them go independent. Obsidian, creators of The Outer Worlds 2, were also mentioned as being under threat, but this has been debunked by Bloomberg's Jason Schreier – along with a rumour that the studio is working on a Fallout game.
Based on all reports, practically every studio under Microsoft is at risk of losing a significant amount of staff. The push to rely on its biggest franchises might make sense business-wise, but Halo today is a long way from being the safe bet it was 15 years ago.
