- Xbox laid off 1,900 employees in the last 24 hours.
- The entire physical game distribution department has been shut down.
- This could be a sign of an all-digital future for Xbox.
The last 24 hours have been chaotic for Xbox, to say the least. Following its merger with Activision Blizzard, the industry had high hopes for the future of Microsoft’s gaming business, but the gaming giant announced devastating news hours ago.
Amid layoffs impacting 1,900 employees, major studios like Sledgehammer Games have been hit extremely hard. However, Microsoft’s physical games department appears to have been completely wiped off, pointing to an all-digital future for Xbox.
Why it matters: Physical media, in general, appears to be on its way out. However, such decisions could accelerate what many fear will be the death of physical game discs.
Microsoft has also shut down departments dedicated to bringing Xbox games to physical retail … which if you've seen the digital-only Xbox console leaks … well, you can get an idea of where Microsoft is going here.
— Jez (@JezCorden) January 25, 2024
Microsoft’s layoffs have been extremely hectic, leading to new information each passing hour. Amid the chaos, journalists like Jez Corden and Jason Schreier have kept everyone informed with the latest updates.
Jez Corden has stated that the layoffs extend to nearly all facets of Xbox’s gaming business. Departments like QA and retail have been hit harder than others, wiping off the workers dedicated to bringing Xbox games to physical discs.
He clarifies that this does not mean Xbox will suddenly stop shipping physical discs tomorrow. However, looking at the industry’s trends, Microsoft’s recent leaks, and the general push toward Game Pass, Xbox might not have much of a physical presence by the next generation.
According to leaks, Microsoft’s next console will be an all-digital Xbox Series X. The next-generation console will also ship with a prominent focus on Cloud gaming, making such reports even more believable.
Elsewhere, one of Microsoft’s flagship first-party titles, Hellblade 2, will be launched as a digital-only title. All of these measures might be an effort to cut costs from Xbox.
The report points out that Xbox could still outsource this part of its business. However, it is easy to read the room and deduce the general implications of such decisions moving forward.
Physical media has been losing its importance over time, but there is still a dedicated audience fond of physical games. The CEO of GameStop also believes the option of physical games should always exist, but Xbox may be the first to break away from this trend.
Featured Image Credit: Windows Central
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