Xbox’s ‘reset’: all the news about Microsoft’s looming layoffs and studio closures

Xbox leaders warned staff of an Xbox reset as the division faces higher console component costs, margin pressure, and an overextended studio network. Reports say Microsoft is preparing July layoffs that could include studio closures, spinoffs, and possible game cancellations, alongside console price hikes and revised Game Pass plans.

The moves suggest Microsoft is shifting Xbox from expansion mode toward cost discipline after years of studio acquisitions and subscription growth bets. If closures and cancellations proceed, the reset could signal a broader industry trend: major publishers prioritizing fewer, higher-confidence projects over sprawling content pipelines.