Destin Legarie Podcast | Save State Plus

Xbox’s massive restructuring is now clearer: thousands of jobs are being cut, multiple studios are leaving Xbox, and teams like Double Fine and Compulsion are set to become independent again. Let’s break down what changed, what still isn’t clear, and what this means for the future of Xbox Game Studios.

Xbox CEO Asha Sharma sent an internal email announcing what she called the most significant restructure in Xbox history. The plan includes approximately 3,200 job cuts throughout FY27, 1,600 role eliminations today, and four studios leaving Xbox for new management.

Former Xbox veteran Laura Fryer recently shared her thoughts on why Xbox studios keep struggling, arguing that “creative freedom” can become a trap when there isn’t enough structure, accountability, or clear leadership behind it.

Laura's Video https://www.youtube.com/watch?v=2BZBoBAZGsc

A major leadership change has happened at Arkane Lyon, the Xbox studio behind Marvel’s Blade. According to VGC, MachineGames co-founder and studio director Jerk Gustafsson has taken over leadership of Arkane, while former president Leonard Bendel has resigned. This comes amid ongoing reports about Xbox layoffs, possible studio closures, and uncertainty around the future of Blade.

Xbox is reportedly testing a disc-to-digital feature that could let players convert parts of their physical Xbox game collections into digital entitlements.