What started as an ambitious initiative now faces growing uncertainty. Six years ago, Phil Spencer introduced Xbox Game Studios as the cornerstone of Microsoft Gaming’s first-party strategy. Backed by a wave of studio acquisitions, the division eventually encompassed more than 20 development teams. But today, that once-confident structure appears to be fracturing. According to recent reports, the official Xbox website no longer references Xbox Game Studios, raising fresh concerns about the future of Microsoft’s gaming ambitions.
Xbox Game Studios Section Quietly Removed
Social media users were the first to notice that the Xbox Game Studios landing page vanished without warning. Previously, the section highlighted Microsoft’s internal development push and listed its full roster of first-party teams, including major names like 343 Industries, Obsidian, and Rare. Each studio logo linked to its respective site, offering updates on recent projects.
Now, those links redirect to the main Xbox site, focused primarily on game releases and general promotions. As of July 15, according to archived versions via the Wayback Machine, the Xbox Game Studios page was still live. But today, it’s gone, and the current Xbox homepage makes no mention of the first-party division.
Turbulence at Microsoft Gaming Fuels Speculation
This change comes at a tense time for Microsoft’s gaming division. In recent weeks, the company laid off more than 9,000 employees across various departments, with Xbox and Microsoft Gaming taking a significant hit. Canceled projects like the rebooted Perfect Dark and the reported closure of The Initiative have only added to the uncertainty, along with workforce reductions at studios like Turn 10.
Reports suggest that Microsoft’s gaming business is not generating the returns executives had hoped for. At the same time, Microsoft is heavily investing in AI, reportedly shifting resources away from other divisions—including gaming—to support that push.
As a result, industry analysts and community members are debating what’s next. Some believe Xbox, as a brand, may be on the verge of a major transformation or even a quiet phase-out. The long-term strategy, many suspect, may involve a shift toward a multiplatform, service-based identity under the broader Microsoft Gaming label.
A Vision That Never Fully Delivered
Xbox Game Studios was founded in 2019 as part of a major investment in first-party content. Over time, the division came to encompass 23 development teams, ranging from world-renowned studios to ambitious startups. The goal was to create a strong pipeline of exclusive titles for Xbox consoles, PC, and Game Pass.
But despite this bold vision (and a few notable successes) the results have been mixed. With repeated delays, internal challenges, and shifting priorities, Microsoft now appears to be reevaluating the role of first-party development within its broader gaming ecosystem.