Microsoft laid off thousands of employees, affecting many within the gaming industry. This decision coincided with the company's greater financial commitment to AI initiatives, reportedly amounting to $80 billion. ID@Xbox, which supports smaller gaming studios, invited partners to an AI roundtable during Gamescom 2025 despite the ongoing layoffs. The timing of this invitation appeared tone-deaf amidst widespread job losses and project cancellations, intensifying concerns about the impact of AI developments on the gaming sector's workforce and future projects.
Thousands at Microsoft experienced layoffs while more game developers and projects faced cuts as part of a push towards generative AI developments, causing concern and frustration.
Microsoft's significant investments in AI appear to be the rationale for the layoffs in its gaming divisions, raising questions about the future of game development.
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