Most of these layoffs weren't on the gaming side. I believe 2000 or so of the 9000. Even King and Blizzard mobile devs, which has nothing to do with Game Pass, had layoffs. You are giving Game Pass way too much credit. 

You're reacting to an opinion of a dev who said it's unsustainable and now jumping to the conclusion Game Pass is to blame for these layoffs. 

Does Turn 10 (Forza) have nothing to do with Gamepass? How about Compulsion? (South of Midnight)

Nothing about this situation suggests a healthy business model. Even one of the biggest megacorps in the world can only dump billions of dollars into something for so long, as we're seeing now with all the cuts.

Netflix, Hulu, Apple TV, Disney plus, and more have all succeeded based on the subscription model. Some of those shows cost a lot money and time as well.

These layoffs were mainly outside of Xbox and was a way for Microsoft to get some capital to invest in AI. Personally, I would've kept the Zeminax MMO alive but Microsoft was smart about cancelling Everwild and Perfect dark because those games weren't going anywhere. I also rather Microsoft not invest in AI and purchase more studios like Ubisoft or Warner bros. Content is the king to success imo.

And many more have failed, including Playstation Vue and XBox/Groove Music.

And yes the layoffs were company wide, however

Microsoft confirmed that it’s laying off as many as 9,100 employees, or about 4 percent of its workforce.

Various sites are reporting that XBox was hit hard, although less than half of the 9,000 fired.

Total Microsoft Employees: Around 228,000.
Xbox Division Size: The Xbox division had around 20,000 employees before the layoffs
Layoffs impacting Xbox: The recent layoffs affected about 9,000 employees, with a significant portion coming from the Xbox division.

So it's a lot more than 4% for the XBox division. In absolute numbers it's more, but XBox is less than 10% of MS.

And not the first time:

Microsoft laid off 1,900 Activision Blizzard and Xbox employees in January 2024, followed by several game studio closures and job losses in May, and 1,000 job losses from its HoloLens and Azure cloud teams in June. Microsoft also laid off 650 more Xbox employees in September, as part of a restructuring related to the company’s acquisition of Activision Blizzard.

No don't let MS buy up more publishers just to ransack them.

A lot of the layoffs in the past didn't affect Xbox because their positions was redundant. Only Tango games was a travesty and thankfully they were saved by another company. These round of layoffs are overblown in terms of impact to Xbox. To the people that were affected by the layoffs, I am sorry but it is business at the end of the day.

MS is allowed to purchase studios or publishers that are struggling. Ubisoft and warner bros want to be purchased.Those companies are going to face layoffs anyways.

Nadella's a massive cocksucker. -_-

MS is going to draw down the staff of XBOX until it's just something like Steam. And after that, may disappear entirely. I've been waiting for this day for a long time, never liked the arrogance of MS's gaming execs. They aren't the best, you have to earn that right. The market decides who is best, not the execs.

Gamepass doesn't make every studio or game an equally worthy investment... So across the board the weakest segments within their divisions were cut. Gaming is not excluded from this but it was not the main focus either.  This is why Nintendo especially is so important as gaming is their primary income, and sony too to a lessor extent... 

But just to clarify these cuts are not about gamepass. It's about low-profit areas that microsoft wants to sacrifice for AI across the whole business and yes that means games that have been in development hell or teams that did not generate enough interest in their recent releases on or off gamepass. But this is also means some of these games/projects would have been perceived as potentially profitable but simply less so than 200m spent on more AI resources.

Here's a more in depth (or rather long winded) article about the recent (and earlier) layoffs. (without ever mentioning the controversial effects of gamepass)
Putting the blame ultimately on Nadella, but mostly on the lack of management as focus has shifted. (And those are not the people fired)



https://www.eurogamer.net/xboxs-absent-landord-execs-are-only-part-of-a-much-bigger-problem

Some excerpts

The vibe has shifted. We've had enough of the disasters now - more than enough - where the attempts at providing reasonable business cases for "organizational shifts", or whatever the latest placative, idiomatic glibness from this lot is, don't so much ring hollow as they do sound a great summoning bell of absolute white-hot rage.

Maybe we didn't absolutely need another Zenimax MMO, to pick one, very unfairly, of a seemingly endless array of examples. And maybe it really was quite likely to struggle on release, because we've seen this more than enough times now, with all the other expensive, ultimately failed live-service punts from the big dogs in recent years, to know how it probably goes (even with its reportedly cool traversal mechanics and likelihood of, given the talent involved, actually being really quite good).

Zenimax's project Blackbird, which really did sound cool and which I have written off incredibly unfairly for dramatic purposes here, is also only the start of it. As our extraordinarily bleak roundup summarises, Microsoft's dripping axe has also swung for the Perfect Dark reboot, the entire Forza Motorsport series, hundreds of people at mobile megastudio King, potentially the whole studio of Romero Games, and most ludicrously of all, Everwild.

Everwild's case is ludicrous not because it was cancelled but because it was allowed to continue unaided for so long. As my new colleague Alex Donaldson wisely pointed out, projects like Everwild - and similarly Perfect Dark, and I'm sure many more - have floundered for years. It's not unfeasible to suggest Everwild might have been cancelled, shelved, or reworked much earlier, when trouble started to show and when jobs could be far more easily saved. This game was announced six years ago and was reportedly in development for over a decade. A decade! What has Xbox, its publisher, been doing all this time?

The circumstances which have led to the likes of Everwild and Perfect Dark being cancelled are not sudden occurrences, not surprise market shifts, headwinds, pandemic hangovers or minor miscalculations. This is a publisher utterly failing in its duty.

These are not cursed projects or impossible ideas, nor wild, incompetent, untamable studios. They're games being made by people who are profoundly experienced and in many cases genuinely revered. Gregg Mayles, Rare's longest-serving developer, out in the latest bloodbath, had been there since 1989, joining the studio at 18 years old. Matt Firor, also gone - reportedly in protest at his team's widely-praised project getting canned - founded Zenimax Online Studios and had been there as its head for 18 years, overseeing the incredibly rare feat of running an actually successful MMO into 2025 with conviction and vision. These are instead creative projects that hit obstacles - maybe impassable obstacles - and were then simply left to continue banging their heads against them while their supposed custodians and ultimate bosses were busy buying more studios, turning the video game funding model on its head, and fighting the FTC, EU, and Competition Markets Authority to assemble their industry-gobbling megapublisher.

And the likes of Everwild sting, too, because this has happened before. In fact it's not just happened before, it's happened before that too! To the point where I've already done the article going "this has happened before" just last year. The echoes thrown up by the nightmare at Rare and co. here in 2025 harken back to fellow British development institution Lionhead, of course (via Arkane Austin, Tango Gameworks and the many more inbetween). A closure that happened in 2016, two years after Everwild's development got started and a year before it was revealed. Phil Spencer was there, at Lionhead, in 2014. He was part of Xbox's senior team when it was shuttered. That was his big lesson. The one do-over. The tortuous but, they say, necessary call that led he and Sarah Bond put out a video vowing never again.

Now, not just Firor and Mayles, or the Romeros, or even the old experts of Lionhead are out of a job. It's hundreds and hundreds more, career professionals from Zenimax, King, The Initiative, Turn 10, Blizzard, Halo Studios, Bethesda Softworks, Raven Software, Sledgehammer Games, High Moon Studios, Infinity Ward, Demonware and probably more. Those on top of Microsoft and Xbox's hefty share of the more than 17,000 developers laid off last year, the 8,000 the year before and 7,000 the year before that who are all out too.

When developers of conviction and expertise leave, at this extraordinary scale, video games only get worse.

Satya Nadella, who leads Microsoft on a desperate crusade to the promised land of AI, by any and all means necessary, will always bear ultimate responsibility. Which is why it's always tempting to offer some sympathy for those like Xbox's undynamic trio and their business accomplices. But then that sympathy is soon extinguished when you keep doing it. That goes double when you open a contemptible letter to those affected with boasts of "more players, games, and gaming hours than ever before" and a gaming business roadmap that has "never looked stronger". And when you set it against a share price at an all time high.

That price, of course, comes in large part from Nadella's unrestrained riding of the environmentally destructive, plagiaristic, disinformation-fuelling generative AI bubble (don't come for me about calling it a bubble: I'm just echoing what this Goldman Sachs AI analyst said!). This may seem like a sudden gear-shift, but if we're scratching heads for a true driving force here beyond the many other, still-present factors impacting gaming's business malaise - from the hangover of Covid-induced investor overoptimism, to shifts in the attention economy - it's this. The big boss has a big idea, that big idea is awfully expensive, and when that happens the margins of everything else tend to suddenly get much finer. The impact of those tight margins is then magnified a thousand times when said boss runs a company that owns such vast waves of a creative industry.

But it's also a signifier of something else. Namely Microsoft leadership's apparent, deeply concerning inability to think about anything like a normal human. More than that actually, it's the utter contempt for humanity itself (all of this putting its mealy-mouthed denial of its AI and cloud software's involvement in any "harm" in Palestine aside, of course). 

As even AI's biggest proponents will usually admit, it is fundamentally incapable of actually learning anything. Creative industries such as video games are human ones, existing because of deeply human urges, irrepressible natures and drives. Drives which run in direct opposition to the horrifying inhumanity of the people who run them.

Without delving too much into the discussion overall, I just wanted to point out that your examples of successful streaming services are highly flawed. Disney Plus - and by extension; Hulu, who are part of Disney's DTC effort, is hemorrhaging money since the beginning. It's considered to be among the company's least financially successful ventures since Disney was formed. Apple TV is in the red by at least one billion dollars annually, and is floating simply due to Apple at large choosing for it to do so. There is nothing in the model itself that makes Apple money.

Netflix are more or less the only streaming service that have consistently been in the black, but even they have faced struggles and continue to do so (mostly revolving around royalties and residuals due to increased competition in the space, The Office is the foremost example of a production growing beyond measure in fees to own the rights to). Even if Netflix were constantly doing great, this would only raise new concerns as long as competitors lose money (namely monopolies, which are bad news), as this is a likely signal that there's no room for more actors in the space.

Spotify is widely hated by artists and creators, but loved by shareholders. The truth is that subscription-based entertainment in any form is unproven as a concept, or at any breadth. The equation is hard to solve, and I don't see Gamepass doing it either. 

https://variety.com/2025/digital/news/apple-tv-plus-streaming-losses-1-billion-per-year-1236344052/

https://www.forbes.com/sites/carolinereid/2025/02/08/disneys-streaming-unit-loses-three-times-more-money-than-disneyland-paris/