At the beginning of this year,Microsoftwas involved in one of the largestwaves of layoffs, with 1,900 peoplelosing their jobs at Xbox andActivision Blizzard. Many believed that would be the limit and that, all in all, the situation within the company would calm down. However, Microsoft has just announced the effective closure of several Bethesda studios, including Arkane Austin and Tango Gameworks.
Microsoft Once Again Leads A New Wave Of Layoffs
The news began to circulate thanks to an email that employees received written by Matt Booty, head ofXbox Game Studios. There, Booty informed that the company will make changes for the “reprioritization of titles and resources.”
These measures involve the closure of Arkane Austin, developers of Prey and Redfall; Alpha Dog Games, responsible for several mobile titles; Tango Gameworks, a studio founded by Shinji Mikami and developers ofThe Evil Within, Ghostwire: Tokyo,andHi-Fi Rush; and finallyRoundhouse Studios, co-developers ofThe Elder Scrolls Online, who will be absorbed byZeniMaxOnline Studios. It is still unknown specifically how many people will lose their jobs as a result of these measures.
pic.twitter.com/KhhqgR902g— Tango Gameworks (EN) (@TangoGameworks)July 20, 2025
The announcement generated unanimous rejection on social media.Dinga Bakaba,head of the surviving Arkane Lyon division, published an extensive statement strongly criticizingMicrosoft, describing the measure as “a stab in the stomach.” Redfall, Arkane Austin’s latest game, will no longer receive updates, and players who had pre-purchased the game’s futureDLCwill receive a refund.
This is absolutely terrible. Permission to be human : to any executive reading this, friendly reminder that video games are an entertainment/cultural industry, and your business as a corporation is to take care of your artists/entertainers and help them create value for you.— Dinga Bakaba 451 (@DBakaba)August 21, 2025
Tango Gameworks, on the other hand, had just celebrated its 14th anniversary two months ago. Their latest release,Hi-Fi Rush, was one of the studio’s most successful and critically acclaimed titles, to the point that until just over a month ago, it was still receiving awards at events like theGame Developers Choice Awards. The game had arrived onPlayStation 5in March.
Xbox had announced the acquisition of Bethesda and its studios in 2020, and the purchase was finally completed in early 2021.Matt Bootyexplained in the email: “We are making these tough decisions to create the capacity to increase investments in other parts of our portfolio and focus on our priority games.” According to Booty’s email,Bethesda Game Studios, id Software, andMachineGamesare not affected by this measure.
Numbers Over Quality
In the letter that Xbox Game Studios head, Matt Booty, sent to the workers, it is stated clearly and without mincing words: “These changes are based on prioritizing high-impact games and investing in Bethesda’s portfolio of major releases.” “So, I’m very sorry for those passionate and creative developers who want to make different games, but we don’t want that here”, he could have added.
In the end, it turns out that the massive studio acquisitions have served to standardize the industry and monopolize the market. No more games with medium budgets, no more inventing and creating… What should be done is more games as a service that lead nowhere, more Roblox and Fortnite clones, and more Call of Duty installments because video games are not art, they are a technological industry that for years has excited shareholders who probably have never held a controller in their hands.
Since the pandemic ended, it seems that the video game industry has entered a crisis, but it’s a rather curious crisis, one in which large companies record record profits year after year while laying off thousands of workers and closing hundreds of studios. According to the consulting firm Newzoo, the video game industry grew by 2.6% in 2023 and reached a turnover of $93.5 billion worldwide.
This situation raises very serious doubts because there are many game releases in May that are eagerly awaited by players. Following this trend raises more questions such as: Will it be a success? Does it even matter if it is? Will the studio close by the end of the year? Can developers be proud of their work or should they update their resumes already?
Stay tuned for this and other news likeSony Layoffs Affect 8% or About 900 Employees andEA Lays Off 5% of Its Workforce – 600+ People
