Microsoft's Xbox division is undergoing a significant restructuring that will impact ZeniMax Media and Bethesda Softworks, involving substantial job cuts and a renewed focus on the company's most prominent video game franchises. The changes come as part of broader layoffs affecting approximately 3200 jobs across Xbox before the end of the 2027 financial year, with some studios facing closure or the need to find new ownership.
According to reports, ZeniMax Media, the parent company of Bethesda Softworks, will see a "significant overhaul" to concentrate on its major intellectual properties. This includes a deeper emphasis on established series such as Fallout, The Elder Scrolls, Doom, Quake, and Wolfenstein. These cuts are affecting numerous studios under ZeniMax's umbrella, including Bethesda's entire development roster.
The increased focus on the Fallout franchise appears to be a strategic response to the high demand for new titles, particularly following the success of the recent Fallout television series. While rumors persist about a potential remaster of Fallout 3, the IP has largely been supported by Fallout Shelter, re-releases of Fallout 4, and ongoing updates to Fallout 76, as Bethesda Game Studios shifts its development resources towards Starfield and the next mainline Elder Scrolls installment.
This strategic pivot also places additional pressure on the upcoming sixth main entry in The Elder Scrolls series. Meanwhile, ZeniMax Online's The Elder Scrolls Online is showing signs of a slowdown after more than a decade of service. The decision to prioritize these established franchises signals a potential shift away from ambitious new projects or less proven IPs.
Id Software, the developer behind Doom, is also reportedly facing staff reductions. This comes shortly after the studio released Doom: The Dark Ages. While there has been internal interest in continuing the Doom Slayer's story, Xbox appears eager for a return to the Quake series, which has primarily seen support through remasters and the competitive title Quake Champions in recent years.
MachineGames, known for its recent Wolfenstein titles, was reportedly working on a new installment in the series following its work on Indiana Jones and the Great Circle. The potential for brand synergy with a new Wolfenstein, perhaps tied to an upcoming TV show, is noted. However, the report suggests that future Indiana Jones projects might be uncertain given that IP is owned by Disney and Lucasfilm, and Xbox's current stance on developing games for other properties remains unclear.
This new direction for ZeniMax and Bethesda appears to leave little room for smaller or struggling franchises such as Prey, Deathloop, or Dishonored. Arkane Studios, in particular, is reportedly seeking a new owner, even while in the midst of developing Marvel's Blade. Further details are expected to emerge as Xbox's revised strategy for its studio portfolio becomes clearer in the coming weeks.