Patch Notes #12: Xbox treats workers to more layoffs, Kotaku escapes G/O Media, and a former Unity employee is sentenced to jail
Just another week in paradise.
Microsoft sent shockwaves across the video game industry this week after laying off around 9,000 employees, including an unknown (but evidently significant) number of workers within its video game division.
We're still attempting to understand the full extent of the cuts, with Microsoft refusing to provide clarity despite being approached multiple times for comment by presumably every publication under the sun.
The company did find the time to tell us that it's no stranger to making cutbacks "even in the best of times." We imagine those words will be hugely reassuring for those still in a job. It also said it hopes to empower its remaining employees to "spend more time focusing on meaningful work by leveraging new technologies and capabilities." What could that possibly be shorthand for?
Despite having racked up a fair bit of experience laying off workers (this is the fourth major layoff round at the company in 18 months), Microsoft still doesn't seem capable of treating the situation with the respect it deserves. Bloomberg reporter Jason Schreier noted that staff at ZeniMax Online Studios had their Slack abruptly deactivated, leaving many employees in existential limbo while they waited to hear whether or not they still had a future at the company.
Meanwhile, IGN obtained an internal memo from Xbox boss Phil Spencer in which he chose to kick off the layoff announcement by telling Xbox staffers how the company's platform, hardware, and video game roadmap have "never looked stronger."
Hey Siri, show me the definition of "tone deaf."
I'm now dangerously close to turning this into a scathing op-ed, so I'll bite my tongue and instead offer you a rather sobering rundown of this week's biggest headlines. There is a bit of good news in there, but there's no denying it has been a brutal few days.
Microsoft says Xbox layoffs are being made to 'enhance our efficiency'
via Game Developer // We could have filled this week's entire column with stories relating to layoffs within Microsoft's video game division. The company's refusal to answer questions about the true impact of the cuts means the industry is still attempting to understand the full scale of the situation, but right now it seems like hundreds of people have lost their jobs across major studios such Rare, King, ZeniMax Online Studios, Turn 10, and The Initiative—the latter of which appears to have been completely shuttered. Reports indicate notable projects have also been cancelled, including Everwild, Perfect Dark, and an unnamed MMORPG that had been in development for years. It's another dark moment for a company that has seemingly done nothing but downsize after spending almost $70 billion to purchase Activision Blizzard.
Phil Spencer isn't retiring as the chief of Xbox 'anytime soon'
via The Verge // Microsoft has denied that Microsoft Gaming CEO and Xbox boss Phil Spencer is preparing to exit after over a decade at the helm. As news of the company's fourth round of mass layoffs sparked chaos, one prominent Call of Duty leaker claimed that Spencer was preparing to depart and would be replaced by Xbox president Sarah Bond. Microsoft refuted that rumor in a statement to The Verge and insisted "Phil is not retiring anytime soon."
Subnautica developer Unknown Worlds loses leadership team
via Game Developer // The co-founders of Unknown Worlds, the studio behind Subnautica, made sudden exits this week. Parent company Krafton broke the news and suggested it tried to convince CEO Ted Gill, game director Charlie Cleveland, and technical director Max McGuire to stick with the studio in some capacity. It's unclear why the trio exited or what their departure means for Subnautica 2, which will apparently launch in early access later this year.
Former Unity senior client partner Rod Stafford jailed for 22 years over sexual offenses
via Game Developer // Earlier this week, former Unity senior client partner Rod Stafford was sentenced to 22 years in prison in the UK after being charged with 33 sexual offences. Stafford represented Unity at a host of industry events in his role, sitting on panels and giving talks in the name of the engine maker. That's despite Stafford having a documented history of sexual misconduct dating back to his time in the armed forces in 2004. Unity has failed to address how it managed to hire someone with a public history of sexual misconduct and place them in a position of power. The company has also refused to clarify when Stafford departed, but Game Developer understands he attended GDC in March 2025 as a member of the Unity delegation—just weeks before his trial began.
Update: Lost Records developer Don't Nod confirms layoffs at Montreal studio
via Game Developer // We heard reports of layoffs at Don't Nod Montreal last week and the company eventually decided to confirm the news. Although it didn't specific how many people were made redundant, it claimed the cuts reflect the "challenging reality of maintaining sustainable operations in a difficult economic context." Social media posts from impacted employees described the move as a "wave off layoffs" and indicated the news came as a shock.
G/O Media sells Kotaku to Gizmodo owner Keleops
via Axios // Finally some good news. G/O Media has sold video game news outlet Kotaku to European media company Keleops in a move that could enable the publication to expand. Axios confirmed Kotaku's editorial team will remain in place and that Keleops plans to hire additional talent, potentially bucking a trend of layoffs and downsizing that has decimated the game media landscape in recent years.
The FTC has paid out almost $200 million in refunds to Fortnite players it claims were duped
via Game Developer // This week, the FTC paid out $126 million in refunds to Fortnite players who were charged for unwanted in-game purchases. The U.S. regulator forked out the compensation to people it said had been duped by "dark patterns" used by Epic Games to trick Fortnite players into spending cash. The payouts come after a 2023 settlement between the FTC and Epic, which denied intentionally misleading players but agreed to pay $245 million in compensation to settle the issue. The FTC previously issued refunds worth $72 million in December 2024, meaning it has now paid out almost $200 million in compensation—and there's still more to come.
Myst developer Cyan Worlds is making more layoffs
via Game Developer // After laying off half of its workforce earlier this year, Myst developer Cyan Worlds confirmed it's cutting even more jobs. The company didn't disclose how many people have been let go but confirmed it has undertaken another "round of layoffs." In March, the studio said it was struggling to navigate "choppy waters" and claimed "industry conditions have forced us into a tricky spot where we are having to weigh the future of our studio against the month-to-month realities of game development."
French court convicts ex-Ubisoft executives over culture of workplace harassment
via France 24 // Three former Ubisoft executives—Thomas François, Serge Hascoet, and Guillaume Patrux—have been found guilty of enabling a culture of sexual and psychological harassment at the Assassin's Creed publisher. A court in France issued suspended prison terms to all three men. Former editorial vice president François was convicted on a charge of attempted sexual assault and handed a suspended three-year term. Former chief creative officer Hascoet was hit with an 18-month suspended sentence, while former games director Patrux received a 12-month suspended sentence.
FBC: Firebreak Launch Wasn't What Studio Hoped For, But Remedy Isn't Giving Up
via GameSpot // Remedy told GameSpot its first self-published title, FBC: Firebreak, has underwhelmed at launch. The co-op shooter landed in mid-June but estimates indicate it had fewer than 300 concurrent players on Steam as of last week. Remedy has now conceded it "had hoped for a better launch." The title, also available on subscription services like Xbox Game Pass and PlayStation Plus, attracted 1 million players across all platforms but now the Finnish studio must figure out how to keep them around for the long haul. "The team here is super-motivated to continue building the game and responding to player feedback," said studio comms director Thomas Puha. "We already reacted during launch week with patch 1.2, making some big changes to the game. As Remedy does, we'll do things with smaller teams in our way and try to solve challenges creatively."