Xbox physical games departments reportedly shut down as part of Microsoft layoffs

Microsoft has reportedly shut down departments dedicated to bringing physical Xbox games to retail as part of mass layoffs at the company.

Xbox physical games departments reportedly shut down as part of Microsoft layoffs
Sean Carey

Sean Carey


Microsoft recently announced it was cutting 1,900 jobs across Xbox Game Studios, Activision Blizzard, and ZeniMax. As part of these layoffs, it's been claimed that the departments responsible for bringing physical Xbox games to market have been shuttered.

According to Windows Central's Jez Corden, who said on Twitter, "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."

While this news will be alarming to those who collect physical media, Corden rightly points out in a follow-up tweet that "reducing retail teams doesn't confirm Microsoft is quitting physical retail for Xbox games yet, they can outsource, and might be consolidating here. So, don't run with 'Xbox is quitting physical' based on this. But, it does seem to be the industry trajectory. Writing is on the wall."

While we will have to wait and see what this means for future Xbox physical media, it does seem that Microsoft is already starting to favor a digital-only approach. We all saw plans for Microsoft's "adorably" all-digital Xbox Series X back in September, and more recently, Ninja Theory announced that the hotly-anticipated sequel Senua's Saga: Hellblade 2 would be a digital-only release.

Responding to the news, Josh Fairhurst, CEO of physical games publisher Limited Run, said Limited Run would "continue to support Xbox physical releases whenever possible." However, Fairhurst recently noted that Limited Run often has to skip physical releases on Xbox as "the majority of Xbox gamers are digital first" and "physical game sales are not high enough on Xbox to offset our development costs."

Corden also mentioned that he'd heard from "multiple sources" that Microsoft is laying off almost all of the internal customer support teams for Activision Blizzard games and will be outsourcing the rest to external companies abroad. He also notes that a "huge amount" of community managers have also been laid off.

We've also seen several different developers say that the team working on Blizzard's now-canceled survival game has been completely gutted and reports that Sledgehammer Games has supposedly lost over 25% of its staff across QA, art, and design.
Written by Sean Carey
Avid Xbox and achievement fan, Sean has committed to playing the best RPGs, racing games, and first-person shooters Xbox Game Pass and his precious free time will allow. Prior to joining TrueAchievements, Sean gained a degree in journalism from Solent University.
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