Microsoft’s ongoing restructuring of its Xbox division is delivering a heavy blow to Bethesda Game Studios and ZeniMax Media. According to reports from Jason Schreier at Bloomberg, these legendary developers will face a “significant overhaul” as part of the broader cuts affecting 3,200 roles within Xbox Game Studios.
While rumors suggested Microsoft might narrow its focus exclusively to Fallout and The Elder Scrolls, Schreier clarifies that this is not the case. ZeniMax will continue developing other major franchises, including DOOM, Wolfenstein, and Quake.
What survives the cuts?
The restructuring aims to streamline development around Xbox’s biggest intellectual properties. Despite the significant headcount reduction at Bethesda and ZeniMax, the studio is not abandoning its diverse portfolio of shooters and action games.
Schreier explicitly noted on Bluesky that ZeniMax “will NOT be reduced to only Fallout and The Elder Scrolls.” This means teams working on DOOM, Wolfenstein, and Quake remain active. For fans of these series, the immediate news is that development continues, though the scale and resources behind them may shift.
The uncertain future of Arkane Lyon
Not all studios under the ZeniMax umbrella have a clear path forward. Arkane Lyon, currently developing Marvel’s Blade, remains in limbo. The project has reportedly run over budget and faced delays, casting doubt on the studio’s future within Microsoft.
Reports indicate Microsoft is negotiating with the French government to find a solution that keeps the studio open and the game alive. However, no final decision has been announced. This follows previous closures of other ZeniMax subsidiaries in 2024, including Arkane Austin, Alpha Dog Games, and Tango Gameworks.
Impact on The Elder Scrolls Online
The layoffs are already rippling through live service titles. ZeniMax Online Studios confirmed that the content roadmap for The Elder Scrolls Online is “shifting” due to staff reductions. While specific details on what features or updates may be delayed remain scarce, players should expect changes to the release schedule.
In contrast, Bethesda Game Studios remains focused on long-term projects like The Elder Scrolls 6. Lead designer Todd Howard has previously stated that this title is still “a long ways off,” suggesting that while resources are tightening, the core vision for next-generation RPGs persists.
What this means for you
If you play Xbox games on PC or console, expect a consolidation of Microsoft’s gaming efforts. The company is prioritizing its “biggest franchises” to move faster with high-profile releases like Halo, Fallout, and The Elder Scrolls. While this ensures flagship titles get attention, it also means smaller studios and experimental projects face greater risk. For now, your favorite shooters from id Software and MachineGames remain safe, but the industry-wide trend of consolidation continues to reshape how these games are made.
Source: Windows Central
Source: Latest from Windows Central
Over to you: Do you think focusing resources on fewer, larger franchises will improve game quality, or does it limit innovation?
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