TLDR
- Microsoft stock rose about 2% Thursday morning following layoffs at Xbox game studios
- Major game cancellations include Perfect Dark, Rare’s Everwild, and an unannounced MMO at ZeniMax Online Studios
- Multiple studios affected including Halo Studios, Sledgehammer Games, and Turn 10 Studios which cut roughly half its workforce
- The Initiative studio is closing completely with Perfect Dark’s cancellation
- Wall Street analysts maintain Strong Buy rating with average price target of $524.86
Microsoft stock jumped about 2% Thursday morning after the tech giant announced layoffs across its Xbox game studios. The cuts have resulted in several high-profile game cancellations.
The layoffs ended development on some of Xbox’s most anticipated titles. A new Perfect Dark game from The Initiative studio got the axe. Rare’s long-awaited Everwild project also faced cancellation.
ZeniMax Online Studios scrapped an unannounced MMO. Blizzard’s Warcraft Rumble will receive no new content updates. Several other unnamed projects at various studios lost funding.
The Initiative studio is shutting down completely. The closure comes alongside Perfect Dark’s cancellation. ZeniMax and Blizzard are moving some employees to different roles within the company.
Turn 10 Studios took the biggest hit. The Forza Motorsport developer reportedly cut about half its workforce. King will trim roughly 10% of its team.
Studio Cuts Across the Board
Halo Studios laid off an unknown number of employees. Sledgehammer Games and High Moon, both Call of Duty support studios, reduced headcount. Raven Software also cut staff.
Rare lost some employees as Everwild development stopped. ZeniMax Online Studios executive Matt Firor will reportedly leave the company. Multiple other studios felt the impact of the cuts.
The layoffs hit both announced and unannounced projects. Romero Games confirmed that Xbox pulled funding from its new game. One employee at Romero Games directly linked their layoff to Xbox’s job cuts.
Market Response
Microsoft stock gained 1.33% Thursday morning. The stock has climbed 18.52% year-to-date. Over the past 12 months, shares have increased 5.03%.
Wall Street analysts remain bullish on Microsoft. The consensus rating is Strong Buy based on 30 Buy and four Hold ratings. Analysts set an average price target of $524.86.
The target represents a potential 5.38% upside from current levels. No analysts currently rate the stock as a Sell.
Investors appear to view the cost cuts favorably. The layoffs could free up resources for Microsoft’s core gaming franchises. Projects like Halo and Forza may receive increased investment.
The gaming division restructuring comes as tech companies tighten budgets. Microsoft joins other major tech firms in reducing headcount. The company is balancing costs against long-term gaming goals.
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