Microsoft is cutting 3.200 jobs in its gaming division this fiscal year, with half of the layoffs taking effect immediately. The subsidiary Bethesda is particularly hard hit by this massive job reduction, which affects roughly one-fifth of the entire Xbox workforce.
In an internal email to employees, Bethesda CEO Jill Braff announced the end of the company's existing model of independent studio plans. Remaining resources will be significantly reduced and concentrated on the most successful brands. Management is reacting to the continued unprofitability of large parts of its portfolio.
The realignment eliminates the risk of experiments.
The job cuts will have a structural impact on development studios across the entire ZeniMax group. Well-known teams such as id Software and ZeniMax Online Studios are affected, while Arkane Lyon according to internal reports The company is facing either sale or closure. This likely means the end for the announced "Marvel's Blade".
The previous principle, according to which studios like id Software or MachineGames were largely autonomous in deciding on their subsequent projects, has failed. Rising development costs and long production cycles make this system unsustainable.
The consequence is a strict consolidation of the portfolio. Going forward, the pipeline will no longer be determined by the ambitions of individual studios, but by the historical market value of the brands. Bethesda is essentially reducing itself to two main pillars: The Elder Scrolls and Fallout. The major project Starfield is being pushed to the back burner internally as a result of this prioritization. The new structure simply lacks the personnel for smaller brands or sequels like a potential Indiana Jones 2.
Collaborative assembly line work instead of creative independence
The remaining resources of formerly independent studios are being reallocated to accelerate production of core franchises. It appears that the reduced team at id Software will henceforth be used solely as a support provider for the first-person shooter technology of other Bethesda projects. This affects "Wolfenstein 3" and potentially the outsourcing of a new Fallout installment to Obsidian Entertainment. Obsidian is currently without a follow-up contract after the commercial failure of Avowed.
This restructuring reflects the general market trend in the gaming industry. Growth has stagnated in recent years, while budgets for AAA productions have exploded. Microsoft is correcting its aggressive acquisition policy of recent years by cutting 20 percent of its Xbox workforce. The company is forcing its subsidiaries to achieve maximum efficiency. Creative niche projects are the first to fall victim to this cost-cutting.
For gamers, this radical overhaul primarily means the end of diversity in Bethesda's catalog. The likelihood of seeing a new Doom, Quake, or an experimental RPG in the next five years is virtually zero. The advantage lies in the potential acceleration of "Fallout 5" and "The Elder Scrolls 6." Microsoft is transforming Bethesda from a creative studio network into a tightly organized production line for established blockbusters. This makes economic sense. For the medium itself, it remains a damning indictment.
It feels like this game will never be released.