Xbox has claimed that it’s not reducing its “overall investment” in video games, as its workers brace for an expected huge wave of cuts starting next week.
The comment was made by a spokesperson in relation to the end of a deal with Hitman studio IO Interactive, which confirmed on Tuesday that it had lost an external partner for an in-development RPG.
Speaking to Bloomberg, an Xbox spokesperson said it was “taking a fresh look at where we invest so we’re focusing on our highest priorities.”
It added: “We’re not reducing our overall investment in games. We expect to invest about the same in content as we did last year. What’s changing is where we’re investing and the kinds of projects we’re backing.”
Microsoft‘s claim comes ahead of expected significant job losses across its business, as part of a major ‘reset’ being planned by CEO Asha Sharma.
According to media reports, Xbox’s cuts will begin on July 6 and lead to studio closures or spinoffs, potential studio mergers, and canceled games.
The first developers at risk of being shut down were recently named as Compulsion Games, Double Fine, and Ninja Theory, with Undead Labs later reported to be a target for closure.
On Tuesday, The Verge reported that France-based Arkane Studios, best-known for the Dishonored series, is also facing closure if Microsoft is not able to find a buyer for the studio.
Concerns first arose that Xbox was planning another round of layoffs after CEO Sharma stated during a Bloomberg Tech conference that she planned on “resetting the business” because it was “not in a healthy spot”.
In the same time frame, Sharma sent a surprisingly candid note to staff, in which she shared “realities that we need to navigate”, claiming that Xbox’s annual revenue had declined nearly half a billion in five years, with hardware costs up 4x, and its studio system “overextended”.
On Monday, unionized Xbox workers shared their views on the planned widespread layoffs, stating that they “will not be treated as disposable”.
