Xbox Layoffs, Halo To Activision, Destiny's Back (And More)

Hello one, take Shrier here and today we're going to do something a little bit different than normal. We're going to talk about a whole bunch of news that has happened over the last two weeks. Well, I have been traveling around the world. I never want to see an airplane again. I flew to Tokyo, Japan. I was there for 6 days or so. 6 days, 7 days. And then I uh flew back home to New York for about 24 hours. And then I got on another plane to the UK. Um, and then just got back home yesterday. So, I am a little bit out of sorts and that's why you haven't seen me on this channel in a couple of weeks. And so, there's a lot to catch up on, a lot of news to break down. And so I'm going to go through a few stories rather than just do one big story on today's episode and share a couple of thoughts and reporting and observation about all of those things. And by the way, if you're wondering why I was in Japan and then the UK, um you

will find out at some point. Uh the Japan trip was for um some secret things that I'm working on. You probably won't find out about those for a while. the UK trip was also for secret things that I'm working on that maybe you'll find out about a little sooner. So, okay. Um, I'm going to go through a couple of headlines real quick. Let's start with Blizzcon. Blizzcon news happened. Well, that was gone. And, uh, the big kind of headline news out of Blizzcon was that they announced two big projects that are many years away. Diablo 5 in 2029 and Starcraft in 2030. And a lot of people reacted to that like, what what are they talking about 2030? who announces a game in 2026 that is coming out in 2030. Um, and uh, I thought that was pretty funny, too. So, I actually asked Blizzard's president, Johanna Faris, about this in an interview that I will post a link to in the show notes on Bloomberg, and she said, quote, "We want to convey confidence in some of our biggest bets coming forward. We are a Blizzard that's

going to ship and ship big and ship on time and all hands on deck to set those projects up for success." Um, if you think about it, this actually isn't a huge change from Blizzard in the past when they would announce games like Starcraft 2 and Diablo III and they wouldn't come out for 3 or 4 years after those announcements. In some cases, even longer. The difference here is that they're actually planting a year on this thing rather than just saying it'll be out whenever it's ready, which personally I I imagine would be a little less frustrating for fans than just hearing about a game and having no idea when it's coming. So, I can see the logic there. I've heard some theories online about why this might be the case, but I think that's the main one is they just want to plant their flag. Um, this has all been planned for a long time, by the way. I'm sure some people are wondering like, is this in response? Does this stuff have something to do with the Xbox stuff? Does that something to do with potential layoffs hitting Blizzard? I'm trying to announce all these things to get away from that. I do not believe that's the case. Often

times, Blizzcon announcements are planned a year in advance. um maybe a little less but like a long time in advance. These trailers um that we saw those cinematic trailers take a really long time to make and Blizzard has a great internal cinematics team and it takes them a long time to put these things together. In fact, a few years ago I I reported this at the time um but people still don't believe it. Uh it was 20 what was it 2019 um that at Blizzard the Blitz Chung controversy was happening. the Hearthstone uh professional player who got banned um for uh for for speaking out um uh uh about uh China and Hong Kong protests and people kind of jumped to the conclusion that Blizzard was announcing at the time Overwatch 2 and Diablo I to distract people from that but that was absolutely not true. Those announcements had been planned months and months in advance. So yeah, Blazecon announcements take a lot of planning in

advance as far as um Blizzard and we'll get to uh the kind of the layoffs that hit Xbox this week. Um a lot of people at Blizzard are still concerned about layoffs um and uh Blizzard has not acknowledged publicly if they are going to be part of this kind of looming Xbox layoff that is lingering. But Xbox has said in the past that they have all these layoffs planned. Blizzard has not been they were touched a little bit by them in July I believe in international offices but Blizzard and Irvine has not been touched by those layoffs. Um the kind of unfortunate part of that is that um I believe one of the reasons that Blizzard hadn't been touched is because they were in the process of union negotiations and now the big question is now that those are over because Blizzard actually just recently announced that it had formed this uh that it had ratified a huge union contract. So the big contra uh question now is now that that contract is done, are those layoffs going to hit Blizzard? Um they did not come this week. There were no Blizzards this week in this round of Xbox layoffs.

Um so we will see if Faries is able to negotiate the number down, negotiate out of layoffs. Not really clear at this point. Um, but there certainly uh is this kind of this this looming worry and expectation at Blizzard that something is coming. I actually asked fairies in that Bloomberg uh story that I mentioned and we'll link about layoffs. Um, she essentially wouldn't comment on them, but she said that she hoped BlizzCon would be quote a sort of oasis, a moment of real joy for Blizzard's staff and fans. She said that she wants to preserve Blizzard's culture and quote the unique special sauce that is Blizzard both culturally and creatively and to the extent that we can perform well for Microsoft. I think that should be seen as a mutual win which my read on that is fair saying come on like you're really going to do this. So we'll see what happens there. One other story I

published, by the way, while I was traveling is an interview with the creators of The Blood of Dawn Walker, who told me a little bit about their really interesting four-year development cycle. I will also link that in the show notes. So, please go check it out if you want to hear more about how that really cool game was created, how they came up with that awesome time system that I know has been controversial for some reason, but I actually really enjoy as a structure for the game. Um, and I think it's only controversial if you haven't played it because it's really way more forgiving than maybe it seems on the outside. Um, they told me that that game costs $40 million to make, which um, uh, makes sense given that they're in Poland. Poland cost of living is much lower than it is here in the US, especially in major cities here in the US. Um, and kind of places it in that quote unquote double A space. It's not quite an indie, not quite a AAA game that has been rare in recent times. So, that was really cool to see. Go check out that story in the show notes. What else? What else happened while I was

gone? Um, Hideo Kojima made some comments spec uh he gave a couple of interviews and they also his his company also posted a big statement on Twitter. Um, so, uh, in my last video I talked about why PlayStation, uh, decided to cancel his game, pull out funding from his game, Fizzant, and why Xbox decided to take over. And in that video, I gave perspectives. I tried to tried to offer as many perspectives as possible from all three sides. Um, short version is there were a lot of variables at play here. Um, financial concerns, budget concerns, timeline concerns, IP concerns, exclusivity concerns. Go check out that video if you want to hear the full story. Um, Kojima Productions, they put up a statement on Twitter uh that uh a lot of people have been messaging me about saying that it disproves what I said. Um, but if you actually read the statement, which I'll I'll post I'll link in in the show notes as well. Um, it actually doesn't comment on anything that I wrote or debunk anything I wrote.

It's kind of it's one of those typical things that companies do sometimes where instead of com commenting on the substance of a report, they'll just be like, "Well, none of the claims I'll I'll read this. I'll quote this directly. None of the claims written came from any official or on there source and as such we encourage you to take them with a dose of skepticism. I mean sure uh sure. Um Kojima has also said in interviews that PlayStation has not told him why they canled the game. Um so I mean them saying that our report like there there there's nothing for them to debunk if they don't even know why PlayStation canled the game. And uh it's a it's an interesting one, but I will say um whenever you see a company put out a statement that doesn't actually respond to the substance of something and it's just like well you should take this with skepticism because it's not people speaking on the record. Um I think you should judge that evaluate accordingly I would say. Um so

yeah, I mean there's really nothing for me to add there because they're not actually responding to anything that I've reported. Um, so I don't think I'll add anything there. One thing that I will say is that um, they had a lot of negotiations, the two parties, uh, Kjuma Productions and PlayStation, a lot of negotiations about the future of the project, about the budget of the project, about the about the timeline, about extensions, about exclusivity, and ultimately it didn't lead to a satisfying result. I'll also say, and I mentioned this in my video last time, that um the people who were involved with Kojima, signing Kojima um to previous deals for Death Stranding and Death Stranding 2, people who include Andy House uh used to be the president of PlayStation, Jim Ryan, who also used to be the president of PlayStation. I mean, these people are not there anymore, which I think makes a big big deal in all of this. the people who had committed to Kojima and had relationships with him and his team. Um, a lot of them aren't at PlayStation anymore. Um, so yeah, go check out that

statement. I will also post that in the show notes. All right, what else is going on? Xbox laying people off as I alluded to before shortly after announcing that they were signing Fizzant. By the way, while I was in uh Japan, uh [laughter] a several people came up to me uh as I was around TGS, Tokyo Game Show, and various TGS parties, several came up to me and said, "Have you heard how much money Kojima was asking for?" Um the the rumored number, I have not confirmed a number, but the rumored number was was pretty significant. Um, but that said, that doesn't mean that Xbox was willing to pay that much. And in fact, I think Xbox paid less than Koji might have been asking PlayStation for at the end of the day. Um, so Xbox announced this week that it is laying off another close to 300 people. It is consolidating a bunch of studios. Um, they call it uh quote continuing our reset. Um, this news is interesting for a lot of reasons. Um

it's not a big surprise because it's a continuation of what was announced in July. Um which is essentially just this ongoing layoff that still isn't done. They now say they're about 3/4 of the way through. Um a few things happen. One is that they're gutting Halo Studios and moving Halo into Activision, starting a new team um to make Halo at Activision. They say, quote, "A small team at Halo Studios will continue supporting the Halo community and games in market." Um, Obsidian is becoming part of Bethesda, essentially reporting to Bethesda, um, which they are making a Fallout for. Um, uh, Microsoft's casual games division is moving into King. Playground and Turn 10 are merging. They were, they worked pretty closely before, um, Playground made, um, the Forza Horizon games and also Fable, while Turn 10 made the Forza Motorsport Games, which it seems like are no more. So, makes sense for them to merge. Um, I suspect a lot of this is

kind of um essentially shuttering studios or like near gutting studios, almost shuttering down stuttering studios without actually saying that they're being shut down such as Halo Studios. Um, if Halo if Halo is moving into Activision, Halo Studios really doesn't have a reason to exist anymore. Um, but I guess they're keeping around a skeleton crew to just have a name around. So, there's no headline saying that they shut down Halo Studios. I don't know, that's a little unfair. Maybe that's not the only reason, but still um worth noting there. Uh they also say that Undead Labs, which is going to be sold, is instead doing an MBO and returning to independence, just like Compulsion and Double Fine did. And agreements they made with Ninja Theory, the makers of Hellboy, fell through. So, they are proposing a closure in the UK. You can't just close the studio. You have to do this whole like proposing uh what's it called? consultation is basically the process that it's called. Um so TBD what happens there but it is

not looking good. Um I think it speaks to how rushed this whole process has been and hopefully I'll be able to report on this and talk about this a little bit more down the road. Um what happened in June and July of this year cuz I've heard a little bit. Um, I think it speaks how rushed the whole process is that they said in July that they were selling Undead Labs and Ninja Theory and then now they are selling neither of them. Instead, Undead Labs is going independent and Ninja Theory does not have a buyer anymore. Um, I think uh they wanted to rush to get out a whole bunch of announcements as quickly as possible. It was a very um a bridged period. Uh, and so clearly, I mean, clearly they made some some announcements that they couldn't back up. They said they had found these buyers and were selling these companies, and in neither case that actually turned out to be true. So, um, worth worth

noting and and keeping in mind as we follow Xbox moving forward. Um, and there were also layoffs, uh, elsewhere, um, not just Halo Studios, um, and Turn 10. There were other kind of uh Xbox game studios layoffs um se central functions layers, management layers um and uh we've seen layoffs at the coalition, the maker of gears and others. And then TVD on what the next round of Xbox layoffs look like. Um, who knows what's going to happen next over there, but yeah, the reset continues at Xbox. Um, one more piece of news that I think is worth getting into, um, is over at Bungie, which has had quite a year from shipping marathon to announcing that Destiny 2

was being sunset to laying off hundreds of people and now saying, and this is from their new studio head, Poria Toran, and head of product Josh Dean, and they're saying that actually Destiny is uh going to be a foundational part of the studio's future. Quote, "We have more stories to tell, new worlds to build, but we have to do it right and give our teams the time they need to do justice to this amazing universe." All of this is to say we are not done with Destiny. And they said that they are going to unvault Destiny 2 campaigns and destinations and raids. So, they're still not doing new updates for Destiny 2, but they are going to unvault stuff so that people can go and play old content from Destiny 2 that has since been vaulted. Um, which uh is a big deal. Uh, it was just a couple of months ago that we believed that Destiny 2 would never be touched again. Um, I had reported and remains

the case that Destiny 3 was not in development at that point. Um, uh, uh, certainly wasn't anywhere close to being made. Um, uh, Destiny 3, I believe, was, uh, people at Bungie had pitched Destiny 3 in various forms over the last few years. It was always just kind of like a simmering piece of conversation or a simmering conversation, a kind of something that would get brought up in meetings, leadership meetings, staff meetings, whatever. Hey, are we going to do a Destiny 3? What is that going to look like? Um the biggest barriers uh were always the price of it, how much it would cost, which is 500 $600 million potentially um to make something that that kind of justifies having a three at the end. Um maybe there were ways to do it cheaper. And I'm sure there were all sorts of PowerPoint presentations and pitches put together to try to figure out here's what Destiny 3 looks like if it's $600 million. Here's what it looks like if it's $300 million. Here's what it looks like if it's $100 million. Um, but fundamentally to make the game that I think players would expect a Destiny 3

to be, it would be extremely expensive. That was one barrier. Um, another barrier was just trying to figure out, uh, is a Destiny 3 going to really bring in that many new players or is it just going to bring in all of the old Destiny 2 players? And one of the things that Bungie was trying to do was this new um this new game that was cenamed Payback that was being run by Luke Smith and Mark Noseworthy who were kind of the Destiny franchise overlords. Um this game was cancelled in 2024 in the summer of 2024 after the Final Shape came out. But up until then the idea behind Payback was that it was going to be the future of Destiny. And it wasn't clear. They weren't even sure if they were going to call it Destiny 3 or something else. Um, but it wasn't kind of a it wasn't a traditional Destiny 3. It was a little bit different. It was more hero focused. Um, Genchin Impact might be a comparison point, not in terms of monetization, but in terms of the way that you would kind of play as a

different hero from the Destiny universe. Um, uh, uh, there were a lot of things that were different about Payback, but one of the ideas was to try to appeal to younger audiences, to new audiences. is the audience that that weren't just kind of already in the thick of the Destiny universe because the average demographic of Destiny players uh the average age just kept getting older and older as the game went along because it wasn't a very good game at bringing in new players especially when they vaulted content and it really became unapproachable for people who just weren't already familiar with the story and the characters in the universe. So, that was always a problem and always something that Bungie was trying to figure out an answer to. Um, so what's next? I mean, uh, them alluding to working on future Destiny projects I think is really interesting and we'll see what happens there. Um, I, uh, have I mean, I I know they're pitching other stuff as well. Um, but I

think this is kind of a good sign for Bungie's future. Um, I think there were a lot of people ready to write the obituary on this studio a couple of months ago when Destiny 2 was announced to be sunsetting and Marathon's players clearly were were not where anybody wanted them to be and obviously the studio got gutted. A lot of people who worked on Destiny are no longer there. A lot of pivotal people in Destiny's creation are no longer there. Um, them saying that they're not done with the Destiny universe, I think, is is promising and can only be a good thing. Um, I do I I do have some more reporting on Destiny and Bungie that I will be getting to at some point in the coming months. Got delayed because of this travel that I talked about and some other stuff that I've got in the works, which is really exciting. I've got some really cool stories coming up in in the coming weeks that uh you got to keep your eye out for and of course I'll talk about on this channel. Um, but this is good news. I think it's good news if you're a Bungee fan. It's good news certainly if you're a Destiny fan to see that this game is not not 100% dead.

Destiny 2 might still be dead, but it's getting unvaulted and Destiny as a franchise is still going to keep going, which I mean, when you have a franchise like Destiny for all of its flaws, I think it's kind of it seems like a no-brainer to me that you would want to keep it going in some way, even if you don't want to spend $600 million to make Destiny 3. So, we'll see what that looks like. Um, but yeah, I'm I'm little bit little bit of reason for optimism. One more thing I'll add, by the way, about Destiny. I don't know if kind of the average player realizes it, but there's a reason that so many other games have tried to clone Destiny and failed. There's a reason that nobody has actually been able to achieve what Destiny has, and that is because it's kind of an impossible game to make. um to make something that is PvP and PvE, to make something that has a whole lot of bespoke PvE content, missions and dungeons and raids. Um most of which you

really can't repeat all that much. So players will just kind of churn through and eat through within a week of it going live and then just be ready for the next thing. um to make something like that requires so much time and resources and manpower and money um that there's a reason that so many studios have been unable to do it. And you combine that with all the technical problems and tools problems that Bungie has had over the years. Um the fact that Bungie is located in one of the most expensive cities in the world um to make games in, the fact that they have to compete for engineering talent. They're in Bell, which is right near Seattle in uh Washington. and they have to compete for talent with all the tech companies with Microsoft and Amazon and um engineering talent especially. I mean that makes engineer salaries extremely expensive. Um uh the fact that everything has to work consistently across PvE and PvP. Um that you're balancing out guns that work the same way in both of those modes. Um, the fact

that everything is at such a high level of graphical fidelity that you need a ton of people working on this stuff to to make it look as good as it does, it's really kind of an impossible task. It's really miraculous. Um, I'll talk about this more in the future when I do talk about some of that Bungie reporting I was talking about. But um it's kind of it's it's [sighs] really a miracle that that game ever happened, let alone that it lasted as long as it did, which I think is worth noting here before we say goodbye. All right, that's it for the news of the week. I will hopefully be back tomorrow because I've got another fun story coming tomorrow for an interview with uh makers of a hit game um that involves going for um how should I say this? I don't want to spoil the surprise, but let's just say it involves going for a long stroll. Um, so more on that tomorrow. And yeah, get get ready because I've got some exciting stuff coming up in the next few weeks and next couple of months. All right, see you all

next time.