Microsoft's Xbox Plans Significant Layoffs
"Game On" is The Fly's weekly recap of the stories powering up or beating down video game stocks.NEW RELEASES:This week's most notable new release is Electronic Arts'third-person fighting game "EA Sports UFC 6," which launches June 19 for PlayStation 5and Xbox Series X/S. Also out this week is Square Enix'saction role-playing game "The Adventures of Elliott: The Millennium Tales," which launches June 18 for PC, PlayStation 5, Xbox Series X/S, and Nintendo Switch 2.XBOX LAYOFFS/CLOSURE:Last Wednesday, Bloomberg's Jason Schreier reported that Microsoft's Xbox business is planning significant layoffs next month. The job cuts, the exact scale of which is not yet known, are expected soon after the close of the Xbox maker's fiscal year on June 30, Schreier said, noting that Xbox also intends to significantly slash budgets for marketing and some other parts of the business.That same day, Xbox CEO Asha Sharma and Xbox chief content officer Matt Booty released online a statement it issued to Xbox staff globally. In the statement, the executives discussed the challenges the business faces, including the "hardware component crisis," the massive decline in annual revenue for the business, and the current platform infrastructure not being "built for the battle ahead." The statement did not, however, contain any specific mention of job cuts.Several days later, The Information's Aaron Holmes, citing three people with direct knowledge of the discussions, that Microsoft has considered spinning out or restructuring its Xbox unit, which could make it easier to sell. Microsoft doesn't have any imminent restructuring plans, but those options are on the table, sources told the website.On Monday, however, Bloomberg's Schreier, citing people familiar with the company's plans, that several Xbox development studios, including "South of Midnight" developer Compulsion Games and "Psychonauts" developer Double Fine, are in active talks to spin off as they attempt to ward off closures. Meanwhile, "Hellblade" studio Ninja Theory is also in negotiations with Xbox, as are a number of other studios across the portfolio at risk of being closed, the author noted. Kotaku separately reported that Compulsion, whose workforce counts over 90 staff, would be shut down, while The Verge said that workers at Ninja Theory were informed of a studio closure but are hoping the studio will find a buyer. The Fly notes that "South of Midnight" released just last year, that Double Fine released "Keeper" and "Kiln" within the last eight months, and Ninja Theory's upcoming game "Senua" was announced at the Xbox Games Showcase last week.EA ADVERTISING:On Monday, Electronic Arts announced the launch of EA Advertising, a new platform "transforming how brands connect with audiences through digital and real-world experiences across its global portfolio of games." As part of the launch, EA Advertising is introducing new ways for brands to reach audiences and measure performance across its ecosystem: Brand Partnerships and Gameplay Integrations; Ad Units in 3D Sports Simulations; Enhanced Targeting and Measurement Capabilities; EA SPORTS Partner Program.MORE VIDEO GAME NEWS:Robloxthe global rollout of Roblox Kids and Roblox Select accountsRussia's TASS said that Roblox has resumed operations in Russia,Ubisoftclosed two development studios, which will result in up to 380 layoffs
