Xbox Reportedly Closes Physical Game Release Divisions Amidst Mass Layoffs
Microsoft has reportedly shuttered its division responsible for physical game releases in the latest wave of mass layoffs. This decision aligns with the growing trend of new releases opting for digital launches, bypassing traditional physical releases.
While this development doesn’t signify Xbox’s departure from the physical games market, it has been noted that these roles might be outsourced. The move suggests a deprioritization of physical releases, in line with Xbox’s current strategy, which prominently features the digital-only Xbox Series S model and an increased emphasis on expanding its Game Pass library.
Windows Central journalist Jez Corden broke the news about Microsoft’s closure of the physical releases department, shedding light on the impact of the recent layoffs. Corden stated, “Microsoft has also shut down departments dedicated to bringing Xbox games to physical retail … which if you’ve seen the digital-only Xbox console leaks … well, you can get an idea of where Microsoft is going here.”
He further clarified, “Reducing retail teams doesn’t confirm Microsoft is quitting physical retail for Xbox games yet; they can outsource and might be consolidating here. So, don’t run with ‘Xbox is quitting physical’ based on this. But, it does seem to be the industry trajectory.”
Many publishers are advocating for an all-digital future, and Xbox has been moving in that direction through initiatives like Game Pass and the budget-friendly Xbox Series S model. Leaked documents also indicate that the next Xbox model will be based on the Series X specifications but will be digital-only, reinforcing Microsoft’s push for consumers to transition away from purchasing physical games.
The gaming community remains divided on this shift. Ubisoft faced criticism when one of its directors suggested that the move to digital “needs to happen,” urging gamers to become “comfortable” with not owning their games. Despite the increasing prevalence of digital purchases, the backlash indicates that the gaming community is not entirely ready to abandon physical games.
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