September was the month Xbox’s ongoing restructuring stopped being background noise and became the headline. A second wave of layoffs landed, leadership took real public criticism, and the platform’s Game Pass strategy kept shifting underneath subscribers. Here’s the full picture.
A Second Round of Layoffs, and Real Criticism of How It Was Handled
Microsoft confirmed on September 22 that it was eliminating 268 roles across Halo Studios, other first-party teams, and Xbox Game Studios’ management and central functions, part of a wider Microsoft layoff that day totaling fewer than 600 positions company-wide. The studio reshuffle that came with it went further than just one team: Activision is expanding its remit to take over both World’s Edge (Age of Empires) and Rare (Sea of Thieves), and will develop the next mainline Halo game through a new dedicated team kept separate from Call of Duty. King is absorbing Microsoft Casual Games, Obsidian is moving under Bethesda’s oversight, and Turn 10 Studios is merging into Playground Games. Undead Labs, whose State of Decay 3 got a confirmed 2027 release across Xbox, PC, and PlayStation 5 last month, has now fully spun off as an independent studio rather than simply leaving Xbox’s first-party lineup as it appeared in August. Xbox says this round puts it roughly three-quarters of the way through the 3,200-role restructuring first announced in July, the same process that produced August’s Bethesda layoffs and the Elder Scrolls VI studio-visit protest.
The timing of the announcement drew real public criticism. Just days earlier, a Wall Street Journal profile of Xbox CEO Asha Sharma had covered her leadership philosophy, summarized by the phrase “clarity is kindness,” delivering difficult news directly and without softening it. Shannon Loftis, a 29-year Microsoft veteran and former head of World’s Edge, publicly called out the contrast in a post that read, in part: “Super funny that Asha Sharma said ‘clarity is kindness’ to the WSJ last week then did a half layoff today.” Loftis’s criticism sharpened further over photos Sharma had shared from a recent trip to Japan, where she visited Kojima Productions and spent time with Hideo Kojima, dubbing it “Kojima-maxxing” and suggesting the optics landed poorly against the backdrop of job cuts happening back home.
Microsoft CEO Satya Nadella added his own commentary during the same stretch, telling the Sources podcast with Alex Heath that the ongoing “streamlining” at Xbox was “great to see.” Sharma has defended the cuts by pointing to Xbox’s profit margins, which she says run three to ten times lower than comparable platform and publishing businesses, part of the broader financial case for the restructuring, alongside acknowledgment that 200 million new Xbox players gained this year still weren’t enough to offset falling revenue.
Game Pass Keeps Shifting
September brought a genuinely busy month for Game Pass subscribers to track. Wave 1 additions landed in a steady drip from September 1 through 15, including Speedrunners 2 as a day-one launch and Call of Duty: Black Ops Cold War joining the library. September 15 turned out to be the pivotal date of the month for the service: it was both the single biggest day for new additions and the day ten departing titles, including Cyberpunk 2077, left the library simultaneously. Minecraft Dungeons II arrived September 29 as the month’s one confirmed Day One launch. Persistent rumors continued to circulate about a possible restructuring of Game Pass itself, including a new ad-supported tier and the potential removal of day-one release access, though Microsoft has not confirmed any of this as of month’s end.
GTA 6 Still Touches Xbox Directly
Even with the console not at the center of the leak drama, Xbox stayed connected to September’s biggest ongoing story. Take-Two shifted its legal strategy on September 3, filing a sealed rather than public subpoena after reportedly identifying two Discord accounts tied to the leaks, specifically to avoid alerting suspects before they could delete evidence. On the business side, Xbox executives said the platform is “very happy” with GTA 6 pre-orders, claiming Xbox’s share of pre-order sales matches its overall share of the console market, a notable claim given other reporting this month suggested PlayStation pre-orders were meaningfully outpacing Xbox’s.
Smaller Stories Worth Knowing
Blizzard Entertainment, now part of Microsoft’s gaming division, held BlizzCon 2026 at the Anaheim Convention Center September 12-13. Double Fine’s Keeper, previously an Xbox console exclusive, finally arrived on PlayStation 5 this month after nearly a year, a visible reminder of Xbox’s earlier divestment of the studio. And GTA 6 scalpers were already reselling Rockstar’s $400 Collector’s Box for upwards of $1,500 this month, even while it remained in stock through official channels, a strange early preview of the resale frenzy likely to surround the game’s actual November launch.
Where Things Stand Heading Into October
Xbox closes out September in the middle of its most visible restructuring stretch yet, real layoffs, real public criticism of leadership’s handling of them, and a Game Pass strategy still very much in flux. Worth watching whether the rumored ad-supported tier or day-one access changes get any official confirmation in the weeks ahead.