The head of Xbox Game Studios is stepping down after only twenty months in office and leaving Microsoft entirely. Craig Duncan is resigning from his position as head of Xbox Game Studios with immediate effect.
His duties will be temporarily assumed by Matt Booty, Xbox's Chief Content Officer, until a permanent successor is found. Duncan had only taken over the position from Alan Hartman in November 2024. His responsibilities included well-known development studios such as Halo Studios, The Coalition, Rare, and Obsidian. At the same time, Chief of Staff Louise O'Connor, who also only assumed this role in September 2025, is leaving the company.
This personnel change comes at a critical time for Microsoft's gaming division. In an internal email, Duncan points to a series of flawless releases and financial successes. The reality behind the scenes, however, is quite different. The abrupt departure of two top managers after such a short tenure in their positions suggests a planned handover is unlikely. It smacks of restructuring. It smacks of crisis.
The context of the austerity measures
Such a double departure in upper management rarely happens without reason in the video game industry. In recent weeks, the signs of a renewed, massive wave of layoffs within the Xbox division.
By leaving, the executives are avoiding the operational pressure that comes with job cuts. Duncan had been with Xbox since 2011 and previously played a key role at the studio Rare for many years. O'Connor had an even longer career with the company, which began in 1999 as an animator. The fact that these long-serving veterans are leaving at the same time is no coincidence. It's damage control for their own careers.
The acquisitions of Bethesda and Activision Blizzard have drastically inflated Microsoft's games portfolio. The company is under pressure from shareholders to justify these massive investments. If the returns fail to materialize, heads will roll. First the managers go. Then the developers.
For gamers, this change in leadership means one thing above all: stagnation and delays. A studio consortium temporarily co-managed by Matt Booty will not make any risky decisions or initiate creative experiments. Until new leadership is established, Xbox Game Studios will simply maintain the status quo. This is causing unrest within the teams and is likely to directly impact the release window of upcoming major projects.
Completely scattered 😂
Just a few years ago they were throwing money around, and now they're realizing that hardly any money is coming in.
It's strange that Sony, Nintendo, and many other industry observers said back then that this business model wouldn't work 🙊
Surprise surprise…
Marcel Lunz, people were laughed at when they said back then that Game Pass wouldn't work in the long run 🤣 You can see it now, looking at the sales figures. Absolutely terrible 😅🤷🏼♂️ but oh well, what can you do 🤷🏼♂️
Lucien Noctus fanboys will just be fanboys, it doesn't have to be your problem.
How many people celebrate Appel for every little thing and won't let anyone criticize him?
Marcel Lunz: Look at how much Sony has spent this generation. They're in much worse shape. You can see that just by looking at their investments in games.
Un Blocker, yeah, those great games, they offer so much.
Nobody but you notices 🤡
Oh yeah, oops, another studio gone. Hellblade was just too good, I guess 🤣🤣🤣
Un Blocker, because Playstation is so badly affected, is also at a solid but still expandable 8% EBIT, while the group as a whole is at 11-13%.
Unlike Xbox, which delivers a ridiculous 3% EBIT, while Microsoft as a whole makes ~50% 🙊
It also sucks that Sony's PSN revenues are at a record high while Xbox has lost millions of subscribers 🫠
Marcel Lunz: What are the current PSN subscription numbers?
PlayStation is in such bad shape that the new console isn't even finished yet. The investments were laughable considering the record profits this generation. The number of AAA games has halved again, delivering less than half of what Xbox has. Xbox still has three games in development. Sony is doing so well that even PS Stars has been removed. But at least they offer six indie games per year as part of their subscription.
Those are brutal percentage figures. 🤭
Just compared to Xbox.
Unblocker, it's funny how you try in vain to make record subscribers and record revenue via PSN appear "very battered" when exactly the opposite is true 😆
Even funnier is the fact that you still believe that "everything is free with our GP subscription" would be a great thing.
It is precisely this unprofitable business model that has brought Xbox to where they are now.
Abysmally low margins, massive pressure on the workforce from CEOs to the studios, as well as the obligation to publish on competing platforms in order to earn at least a little money.
Genius! I'm so jealous! 😂
Marcel Lunz: You did that, didn't you? 😂
But to get back to the topic:
What are the current subscription figures for Sony's business model?
How do you even come to the conclusion that it's unprofitable, especially given the record revenue from Game Pass last year? They've invested a huge amount.
Perhaps Sony will invest a bit more money in the next generation. We're keeping our fingers crossed that the offer won't be so meager 👍 Then many won't have to be so envious anymore.
Sony, by the way, faces the same pressure. However, their business model means that the number of games released each generation is halved, despite record profits. Therefore, they are now looking to attract more customers, following Xbox's example. Let's hope it works.
Unblocker, I can also generate 100 billion in revenue per year, but that doesn't mean that a single cent of profit remains.
Let me repeat for you to write down: 3… THREE percent margin 😂
Just like the customers they gain… after they've lost millions and their website even crashed under the onslaught of GP cancellations 😂
So this is what the Xbox success model looks like, the one everyone is supposed to envy.
Wonderful 👌😆
Marcel Lunz And now look at Sony's offer. That was nothing in comparison.
That makes me really jealous! 🤣
Xbox now has the most customers. Sony doesn't even have a quarter of that.
How many customers does Sony still have on their subscription service? How does their business model work? Tell us about it.
3% margins on expenses, yeah. Now look at Sony's margins and their expenses. No wonder you feel this way. We all feel for you. Hopefully, the next generation will be better.
But maybe even you'll enjoy the six indie games released each year. The main thing is to be happy! That's all that matters.
Un Blocker is great, they still manage to achieve an EBIT almost three times higher with "absolutely nothing" than a corporation that thinks it can conquer the market by buying everything up 😂
A profit margin is a profit margin, you can't argue that away with expenses.
That's just a terribly miscalculated situation 😆
I see, you're stuck in 2023 and still think you have to flex with "customer numbers" that are artificially boosted not only by PC users but even by mobile phone users 😂
It's great that every mom who's ever played Candy Crush is now considered an Xbox player, so it doesn't look quite so pathetic anymore 🙊
Marcel Lunz: It's even crazier when moms generate more revenue than Spiderman 🤣
Every company flexes its muscles with paying customers. And Sony isn't even in the top 4. They've never artificially boosted anything; it's simply impossible.
With that margin, you've delivered twice as many games as Sony and still have three times as many in development. What an awesome generation!
You definitely can't ignore the expenses. Absolutely right! 👍
You're absolutely right. Hopefully, Sony will dig a little deeper into their pockets soon.
Sony's subscription numbers, by the way, stagnated in 2023. You can probably guess why. 🤭 I wonder if they'll ever be able to flex their muscles with them again, or if they've miscalculated terribly once more.
Unblocker, yeah, the moms generate a lot of revenue but no profit at all 🤡
I'm just waiting for Microsoft to buy Netgear, TP-Link, and Fritzbox so they can count everyone with an internet connection among their subscribers. It would fit their concept perfectly, since everything is Xbox after all 😂
But you're right, the SS/SX is a REALLY awesome generation. Precisely because there are so many great games, it's actually selling even worse than previous generations. And the press and players alike have praised the many, many games to the skies; they're of such outstanding quality that they haven't even won the Game of the Year Award to this day. Sony, with its non-existent games, really has a tough time competing. Oh wait, even a simple Astro Bot won. Oops! 😂
Isn't it wonderful when all the investment and numerous users pay off so well! It's just a shame that nobody but you recognizes this brilliance.
Things are going badly for Microsoft, Xbox sales are going badly, Game Pass subscribers don't give a damn and are canceling.
You should probably explain that to everyone 🤡
Marcel Lunz: Except these are routers. Game Pass won't run on them any more than it will on the PS5. 🤡
The internet connection is irrelevant. The routers would need to be integrated into the Xbox system; then they could be counted correctly. 👍
The console doesn't need to sell anymore. They're a step ahead of Sony. 🤭
The games were all better than Sony's this generation. No need to be envious. Over 500 million customers recognized their brilliance. Unfortunately, you're not one of them.
Nobody cares about that. Where do you think more people have cancelled their subscriptions by now? I'm curious about Sony's next figures. There's not much explanation needed there.
Even if the console sells terribly, the platform will remain number 1. Perhaps we'll even see Sony back in the top 3 one day.
The Series S/X was the best console of this generation in terms of game selection. Bring on the next one! 😍
I'd even accept a 1% margin. The main thing is that they offer that much again.
Escape the sinking ship quickly?