Xbox’s Latest PR Blunder Is Their Worst Look Yet

Xbox is trying to get a cultural reset, but it’s not going great. Amid shifts in company leadership and blunt assessments from Microsoft’s corporate wing, the studio has shifted priorities. That means studio closures, layoffs, and attempts to, as reported by GameStop, better monetize the company’s gaming output.

It’s the former that’s catching the most attention, though, as the announcement that several developers under the Microsoft banner are either definitely shuttering or at risk of closure has been spreading worries among fans and developers alike. One of the companies definitely on the chopping block is Ninja Theory, despite their upcoming Senua being heavily featured at the Xbox Games Showcase. New reporting suggests Microsoft even knew that decision was coming when they were advertising the game, which could be a crucial PR catastrophe that impacts Xbox Game Studios’ future.

Why Xbox’s Plans For Ninja Theory Are A Really Bad Look For The Company

During the heyday of development on initiatives like Xbox Game Pass, the larger Microsoft company and Xbox Game Studios purchased several game developers like Double Fine, Obsidian, and even titans like Activision Blizzard. However, new leadership seems to believe that the success of the company is dependent on shifting to a different rollout plan. That means plenty of studios are being threatened with closure if they can’t be sold to other companies. While this has been something Xbox Game Studios hasn’t been afraid to do before, despite critical or commercial success — just like with Tango Gameworks even after Hi-Fi Rush became a hit — these new closures en masse are a lot more worrisome for the perception of the company.

The worst example might be Ninja Theory, though. The company has been formally earmarked for closure, despite the developer showcasing the trailer for their new game Senua at the XBOX Games Showcase earlier this month. At first, it appeared that this decision from corporate came after the trailer was launched. However, reporting by Game File indicates that Microsoft had already decided Ninja Theory would be closed down and released the trailer in hopes of attracting attention from potential buyers. It’s unclear at the time of writing whether or not the team at Ninja Theory was aware of this plan — which looks terrible for the new leadership at Microsoft.

Advertising the game and highlighting the game during their company showcase, only to reveal it was in an effort to attract potential buyers, feels dehumanizing from afar. It suggests that the company doesn’t care about the potential success or failure of Senua, only that they make money either by closing the developer or selling it off. That’s all true if Ninja Theory did know about the closure — and would be even more frustrating if Ninja Theory didn’t know, as it speaks to how little Xbox Game Studios seems concerned with the opinions of the developers that fall under their umbrella.

Developers And Gamers Are Going To Remember Xbox’s Latest Moves

Any public business is going to have to reckon with its reputation in the general marketplace — but that’s especially true in gaming, an industry that inspires a massive level of passion and personal identity in its consumers. Xbox getting the reputation that it will quietly shut down developers even as they are on their biggest stage is a terrible look for a company. That kind of PR blow could still be impacting their future for years to come. For developers, this undermines any confidence they could have in the Microsoft leadership. Especially in light of all the departures from senior staff and internal shuffling of executives, it suggests the brand has lost connection to the gaming identity it has spent the last twenty-five years crystallizing in lieu of monetization.

Developers bought by the company in the last decade were sold on the freedoms afforded them by being under Microsoft’s umbrella, only to discover that also made them easy targets for closure amid cost-cutting efforts. Going forward, it seems less likely that developers will be as attracted by potential collaborations with Xbox. There’s also the impact of this among gamers, many of whom have already been expressing their frustrations with the direction of Xbox Game Studios.

What drew them to Xbox was never necessarily the Microsoft branding but rather the games. Studios like Double Fine, Ninja Theory, and Compulsion Games have dedicated fan bases that will see these closures as dismissive choices that shut down beloved companies. It’ll set off layoffs as the studios are either sold for parts or shuttered completely. In an era where gamers are becoming increasingly frustrated over rising prices and corporate embraces of practices like AI, all this does is paint Xbox in an even worse light. Especially as PC gaming is on the rise and mobile platforms continue to eat into broader console sales, fans with a negative opinion about Microsoft are more likely to go elsewhere. These decisions by Microsoft may come with a quick financial perk, but they seriously risk the reputation of the brand among gamers and developers. In this industry, that can do more damage than any commercial dud.