Microsoft's Xbox division appears to be gearing up for another wave of workforce reductions in the coming week. This development follows closely on the heels of Xbox's recent games showcase event, where the company announced exciting new titles including The Outer Worlds 2 with an October 29 release date, unveiled Double Fine Productions' upcoming game Keeper, and introduced the innovative ROG Xbox Ally handheld gaming device.

The gaming industry has been grappling with widespread layoffs since 2022, and Microsoft hasn't been immune to this trend. Over the past three years, Xbox has eliminated nearly 3,000 positions. Among the hardest-hit teams was 343 Industries, the studio behind the Halo franchise, which saw significant reductions in its single-player development team. These cuts reportedly led to a strategic shift away from continuing Halo Infinite's narrative, with rumors suggesting the studio is now working on an Unreal Engine 5 remake of the iconic franchise.

The layoffs had particularly devastating consequences for Bethesda Softworks last year, resulting in the complete closure of four studios: Alpha Dog Games, Roundhouse Studios, Tango Gameworks, and Arkane Austin. The shutdown of Tango Gameworks sparked significant controversy, especially considering Xbox had previously hailed the studio's Hi-Fi Rush as a major success. Fortunately, Tango Gameworks found a lifeline through South Korean publisher Krafton and continues to operate.

In related news, Xbox has confirmed that The Outer Worlds 2 will launch at $79.99, marking the company's first title to reflect the industry-wide trend of increasing game prices. The game will also offer a Premium Edition priced at $99.99, providing additional content for dedicated fans.

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As numerous companies across the gaming landscape continue to implement cost-cutting measures through layoffs, project cancellations, and studio closures, Microsoft appears to be following suit. According to a recent Bloomberg report by Jason Schreier, Microsoft is preparing additional workforce reductions within its Xbox division as part of a broader corporate reorganization that also affects sales teams.

The impending layoffs, expected to occur next week, raise questions about which Xbox divisions and first-party studios will be impacted. Since 2022, Xbox has implemented the fourth-largest number of layoffs in the gaming industry, trailing only Embracer Group, Unity, and Ubisoft. This would mark the fifth major round of job cuts for Microsoft and Xbox since early 2023.

Despite these challenges, Xbox finds itself in a strong position creatively. The platform's current lineup of first-party releases has been exceptionally well-received, with Xbox Game Pass offering arguably its strongest catalog to date. Successful PlayStation ports of titles like Forza Horizon 5 and Indiana Jones and the Great Circle have performed well commercially, while the upcoming ROG Ally handheld device promises to expand Xbox's reach in the portable gaming market.