Image: IO Interactive

IO Interactive, the studio behind the Hitman series and 007 First Light, announced that it is laying off staff after a relationship with an “external partner” on its next big franchise, Project Fantasy, “has come to an end.” IO has described Project Fantasy as an “online fantasy RPG”, and Kotaku and Bloomberg report that Microsoft, which is planning significant cuts as part of a broader “reset” of the Xbox business, was going to be the game’s publisher.

It’s unclear how many people will be affected by IO’s “staffing decisions.” The company says “we are fully committed to supporting those affected through this challenging transition.” IO also notes that it remains “100% committed to” Project Fantasy and promises that “this wonderful universe will see the light of day.”

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Image: Microsoft

Microsoft is set to announce a wave of layoffs for its Xbox studios and employees next week. Sources familiar with Microsoft’s plans tell The Verge that the layoffs will lead to studio closures or spinoffs, potential mergers of studios, and canceled games.

I understand Microsoft is currently weighing closing at least five studios, including the developers behind Marvel’s Blade. Sources tell me Microsoft wants to cancel Blade as part of a wave of cost cuts and job losses that are planned for the company’s Xbox gaming division.

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Photo by Vjeran Pavic / The Verge

Microsoft is increasing the prices of Xbox consoles again. Starting August 1st, 512GB models will be $100 more expensive, while 1TB models will be $150 more expensive. This means that the Xbox Series S will start at $499.99, the Xbox Series X without a disc drive will start at $749.99, and the Series X with a disc drive will start at $799.99. Microsoft also says it will be “sunsetting” its 2TB Xbox Series X.

Microsoft last raised prices in October by $20 to $70 and says it had hoped to avoid further hikes. “Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027,” Microsoft says in a blog post. “The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles. Unlike phones, computers, speakers, and other consumer devices, consoles are typically not sold at a profit, but instead for less than they cost to make.”

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Image: Ninja Theory

Xbox is closing down Ninja Theory, the studio behind the Hellblade series, a source tells The Verge. Staffers were told on a call on Monday about the closure, but they are hoping the studio will find a buyer. The closure comes as “several” Xbox studios at Microsoft, including Compulsion Games and Double Fine, are in “active negotiations” about spinning off, Bloomberg reports.

The closure and negotiations follow Xbox CEO Asha Sharma and chief content officer Matt Booty warning last week of a “reset” at Xbox, laying out several challenges facing Xbox’s business — including that it had “over extended” with its studio system and the hardware component crisis is significantly driving up prices. Kotaku reported earlier on Monday that Microsoft was planning to shut down Compulsion, though it noted in an update that studio leadership was in “negotiations” with Microsoft.

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Image: The Verge