Xbox Game Studios is facing a major leadership change at a critical moment for Microsoft’s gaming division. Craig Duncan, the head of Xbox Game Studios and former Rare studio leader, has announced his resignation, leaving one of the most influential positions within Xbox vacant.

The unexpected departure comes as Microsoft reportedly prepares for additional layoffs and a significant organizational restructuring. Duncan is not the only executive leaving the company. Louise O’Connor, Chief of Staff at Xbox Game Studios, will also exit Microsoft.

Craig Duncan Resigns, Leaving Xbox Game Studios Without a Leader

Craig Duncan spent nearly 14 years leading Rare, one of Microsoft’s most iconic development studios. During his tenure, he oversaw successful projects, including Sea of Thieves, making him a natural choice to replace Alan Hartman as Head of Xbox Game Studios in November 2024.

Since taking over the role, Duncan has been responsible for managing Microsoft’s vast network of game development studios, one of the largest content publishing organizations in the gaming industry. However, his time leading Xbox Game Studios has now come to an abrupt end.

In an email sent to Xbox employees, Duncan reflected on his tenure and highlighted several achievements accomplished during his leadership.

“When I stepped into the leadership of Xbox Game Studios 20 months ago, my purpose was to serve our studios, our teams, and the people creating our games,” Duncan stated. “Together, we set out to deliver high-quality games, strengthen studio culture, and help shape the future of the business. I’m proud to say we achieved many flawless launches that contributed to the company’s commercial success.”

Craig Duncan

Why Is Craig Duncan Leaving Xbox?

While Duncan confirmed his departure, he did not disclose a specific reason for his resignation.

Industry observers speculate that Microsoft’s ongoing restructuring efforts and expected workforce reductions may have influenced his decision. However, neither Duncan nor Microsoft has officially linked his exit to the company’s broader organizational changes.

For now, Xbox has not announced a permanent replacement. In the interim, Xbox Game Studios teams will report directly to Matt Booty, Microsoft’s President of Game Content and former head of Xbox Game Studios.

Louise O’Connor Also Exits Xbox Game Studios

Adding to the leadership transition, Louise O’Connor, Chief of Staff at Xbox Game Studios, is also leaving Microsoft.

Like Duncan, O’Connor has deep roots at Rare. She previously worked as an animator on classic titles such as Conker’s Bad Fur Day and contributed to numerous projects throughout her career at the renowned British studio.

Following Microsoft’s cancellation of Everwild, O’Connor moved into a leadership role at Xbox Game Studios, where she supported studio operations and organizational initiatives.

Duncan praised O’Connor’s contributions in his farewell message.

“Louise has been a thoughtful, creative, and trusted partner who consistently championed excellence and supported our studios with clarity and dedication. I thank her for everything she has contributed to Xbox Game Studios and am confident she will succeed in whatever comes next.”

Craig Duncan y Louise O’Connor

What Happens Next for Xbox?

The departures of Craig Duncan and Louise O’Connor arrive at a sensitive time for Xbox. Microsoft Gaming continues to navigate industry-wide challenges, increasing development costs, studio integration efforts, and reports of further restructuring.

Neither executive has announced their next career move, leaving fans and industry observers watching closely to see where two of Rare’s most experienced veterans will land next.

As Xbox enters another period of transition, questions remain about the future leadership of Xbox Game Studios and the long-term direction of Microsoft’s gaming business.

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