Microsoft is making significant changes to its gaming division, including mass layoffs, project cancellations and, now, an increased reliance on artificial intelligence . According to a company employee, the measures have affected major studios such as The Initiative, ZeniMax Online, Rare, Turn 10 and Halo Studios.
Furthermore, the employee also highlighted that the watchword seems to be restructuring. In this way, it is replacing internal teams with automated agents and specialized contracted studios to be able to generate the use of this artificial intelligence.
According to internal sources, Microsoft has reportedly shut down the Perfect Dark reboot project, as well as canceling the MMORPG Project Blackbird and Rare’s new title, Everwild. The teams involved in these productions have been laid off, including veteran names like Gregg Mayles. At Turn 10, most of the professionals have also been laid off.
In the case of Halo Studios, five employees left the team, and the company itself transferred part of the development to third-party studios in Europe and the United States. This decision did not please some employees, who were dissatisfied with the direction of the projects.
According to the same source, there is a feeling of lag in Microsoft’s gaming division compared to other companies in the sector. Thus, he revealed that this ended up contributing to the waste of resources and increased frustration among the teams.
Microsoft is betting on AI instead of in-house teams
One of the most controversial points involves the perception that Microsoft is trying to replace as many human jobs as possible with artificial intelligence. The company has invested heavily in the area and, although no one knows exactly to what extent it has already applied this technology, the possibility is causing concern behind the scenes.
The source revealed that employees are concerned about the quality of games developed under this new production model. According to the employee, there is no confidence that Halo Studios’ next releases will reach the standards expected by players.
This situation becomes even more delicate after the public received the title Halo Infinite with little enthusiasm. The division plans to reveal news during the HaloWC 2025 event, scheduled for October, and expectations are high that the new announcement will not worsen the situation even further.
Mass layoffs and canceled projects
Microsoft recently mandated the use of artificial intelligence (AI) tools across all company units . An internal email revealed that employees must incorporate AI into their daily work or risk negative performance reviews or job losses.
These changes come amid a broad cost-cutting process. This is because Microsoft announced the cut of around 9,000 employees , including Xbox studios such as King and ZeniMax in Europe. The mass layoff was the largest the company has recorded since 2023.
This naturally means that a number of games previously scheduled for release will no longer be available to players. The move has resulted in the cancellation of several projects in production , such as the Perfect Dark reboot, the MMORPG Project Blackbird and Rare’s new title, Everwil.
