At half past twelve yesterday afternoon, Eastern time, developers walked out of six buildings at once: the ZeniMax and Bethesda offices in Rockville, Austin, Dallas and Montreal, a rally at Obsidian in California where Blizzard staff came to stand with them, and one more outside Microsoft’s own campus in Redmond. The signs read 'Save Our Devs'. It is the first time in this industry’s history that game workers have marched at this many studios on the same day. Whatever finally got them all outside together, it was not a game.
They were marching against the most reliable thing Xbox puts out. The company delays its games for years; its layoffs are punctual. This year’s arrived on 6 July, right on schedule, around 3,200 jobs across the division, 440 of them union members at Bethesda, ZeniMax Online, id Software and the QA teams. 'The Elder Scrolls 6' has slipped for fifteen years. The layoff has not missed a summer in three, and next year’s is as good as announced.
The damage under those round numbers is worth naming. More than fifty of the people cut were building 'The Elder Scrolls 6', the game the division is supposedly reorganising itself to protect. id Software, which invented the first-person shooter, lost as much as three-quarters of its people and has been, by one internal account, shrunk to the size of a support studio. Ninja Theory, which made 'Hellblade', is closing. So is Double Fine, thirty years after Tim Schafer founded it. Arkane Lyon, the 'Dishonored' team, is going the same way, its half-finished 'Marvel’s Blade' cancelled from under it. This is the reorganisation working as intended.
The official reason is that the studios were losing money. Asha Sharma, who took Phil Spencer’s chair in February and marked the occasion with what she called the most significant restructure in Xbox history, a bold title for the fifth one, told Fortune the first-party studios were losing 64 cents on every dollar. The figure is real. What it leaves out is the counting. Put a game on Game Pass and the millions who play it arrive as engagement rather than sales, so a studio can make something people love and still finish in the red on the one page management reads. Compulsion made a game people loved and got shut for it, which on Game Pass is less of a contradiction than it ought to be.
It helps to see what Microsoft does with the money it is not losing. It paid about $76 billion for these studios to begin with, $68.7 billion for Activision Blizzard and $7.5 billion for ZeniMax, and this year it will spend $190 billion on AI datacentres, roughly $40 billion of that next quarter alone. The whole games division being dismantled to recover Sharma’s 64 cents would not cover a fortnight of the datacentre bill. The saving and the spending are the same motion, and some of what pays for the AI came out of 'Dishonored'.
Sharma also explained why you will not find an Xbox this holiday. Memory prices have tripled, and they have tripled because every hyperscaler on Earth, Microsoft loudest among them, is buying it by the shipping container for AI. The same hunger that is firing the people who make Xbox games is the reason you will struggle to buy an Xbox to play them on. Microsoft has outbid itself for memory and charged the difference to its own studios.
None of this is news to the people with the signs. One organiser pointed out that Microsoft keeps rehiring the same people it lays off, which does invite the question of what the earlier rounds were for. The one studio being handled with any visible care is Arkane Lyon, and the reason is a map rather than a change of heart: in France, ending ninety jobs is a legal process with the workers in the room, not a fifteen-minute video call. Everywhere the law lets Microsoft move fast, it has.
When Bethesda staff set out small memorial displays for the colleagues who had been cut, HR had them taken away. A company worth more than three trillion dollars could not spare the desk space for a few printed names.
The march broke up in the early afternoon, and the people who marched went back to making the games. The next one is already on the calendar, in the loose way these things are, for about this time next year. It stays the one Xbox release you can set your watch by.
