Rumor: Xbox division faces brunt of Microsoft's first round of layoffs
by Richard Mitchell 
{ Jan 23rd 2009 at 1:30PM }
Dean Takahashi reports for VentureBeat that ACES Studio, best known for the Flight Simulator franchise, has been shut down. Additionally, he reports that 30% of Microsoft's game testers have been cut and that the game group will soon undergo a "management restructuring."
Expect more on this story as it develops.
[Via GameDaily]
Reader Comments (Page 1 of 1)
Deck @ Jan 23rd 2009 1:49PM
Living in Seattle, and listening to NPR they are saying the same thing. That the Entertainment and Devices division is most widely hit. They also are just saying it is a rumor however and that they do not know for sure. They also don't know which section of E&D is being hit more.
Doesn't make sense that the bulk would come from the XBOX side due to the profitability but.. who knows. I know Microsoft is calling these layoffs "trimming the fat" to prepare for rougher times so they don't have to do larger layoffs later on. (Hopefully, they say that is their goal anyway.)
Morgon @ Jan 23rd 2009 2:02PM
On the flip side of the coin, perhaps it does make sense to trim down the profitable side and make it more profitable. Let's face it, at the end of the day, it's still a business :(
Larry @ Jan 23rd 2009 2:04PM
If you check out Major Nelson's twitter it might hint at who might have been trimmed.
Sean @ Jan 23rd 2009 2:15PM
http://xbox.joystiq.com/2009/01/22/part-of-microsofts-gamerscore-blog-team-let-go/
Larry @ Jan 23rd 2009 2:38PM
Opps, I had not seen that earlier post. Sad to see them go.
Alien Lord @ Jan 23rd 2009 3:50PM
@PBone Ms has been making profit on the hardware for more then a year and a half and the software has made then profit since day one. For the month of December third party developers/publishers made 504 million from software sold on 360, how much did MS make from that software, not to mention Halo 3 still sells well and for $60 still.
PBone @ Jan 23rd 2009 2:05PM
Just because they make a profit on selling a system this year and middle of last year doesnt make that divison profitable.
Remember they loose alot of money when they added that 3 year warranty. Think about all the xboxs that got sent it for the dvd drive dying and the rrod. My friend got both. he finally upgraded his fans and its been good for him.
they lost money on the systems that got sent in for repairs and what not.
Tony @ Jan 23rd 2009 2:11PM
I'm pretty sure they announced that that division as a whole was making a profit months back.
PBone @ Jan 23rd 2009 2:15PM
Like i said in the middle of 2008 from hardware sales. Not software sales.
It took ms two years to make a profit from xbox, remember they lost money from each system they sold it was like 70 bucks at first then slowly went down as they made cheaper parts.
and then they got sued and thats why they did the 3 year waranty for the 360. and then the repair cost. and the shipping it all adds up.
Im just saying they got hurt when they had to go to court, and then repair and ship back and forth all those systems. and pay costumer service people extra for the hours they put in to fix the problem and talk to u on the fone about it.
Sean @ Jan 23rd 2009 2:12PM
It only looks like there are accelerating a process they were in the middle of doing anyway.
FASA, Bungie, Ensemble, and now ACES (Flight Sim) and 30% of the QA staff. How long will certification take now? How long before Lionhead and Rare are spun off too?
And yet... they continue to sink even more money into online search!?! Why in God's name do they continue to invest in the "Live Search" money pit and not a division that is actually making them money escapes me.
kevin @ Jan 23rd 2009 2:44PM
definitely agree with live search. wtf? it just doesnt make sense
Velsar @ Jan 23rd 2009 2:45PM
Fire an executive, seriously.
I mean this is just getting from bad to worse, and now to awful.
Ryan W @ Jan 23rd 2009 2:58PM
PSST... Hey Microsoft! Maybe take a look at trimming the fat on the Vista team, as opposed to a team that is actually creating a GOOD product.
AxFactor @ Jan 23rd 2009 3:26PM
MS wants to trim fat?
*Close the MS Works div (note the oxymoron)
*Anyone associated with Vista management
*Work with open source more closely
*longer Dev cycles around Windows
*Close MS Money
*Kill most of your Live projects (Google is kicking ur butt)
*Stop charging an arm and a leg for Windows/any Visual Studio and maybe we'd actually buy them (listen up Adobe I'm looking at you)
These are just a few suggestions instead of cutting employees who are producing results (I assume this based on the div as a whole)
c4v3man @ Jan 23rd 2009 4:56PM
*MS Works allows for people to get introduced to "Office Lite", which helps them sell more copies of MS Office, which is very lucrative
*Why? Vista may have bombed, but management is only part of the problem. Maybe fire a few, but keep the rest, as I'm assuming they're working on Windows 7, which is shaping up nicely.
*Open source is fine for some products, but for most things, such as Windows, having it closed works in their best interest. Besides, they can just have Novell handle their open source ties.
*Londer dev cycles on Windows? Are you aware of how long the cycle was on Vista (as a whole)? Granted, the version of vista we are using today didn't take all that long to complete, but let face it; newer versions of programs sell better in general.
*Trying to be competitive with Google or other online providers with Live products helps Microsoft keep pace with it's competition. Let's face it, alot of the research being used for products such as search, messenger, and other products can be applied in multiple other applications indirectly.
*Let's face it, you're not important. Microsoft doesn't care if you build your own computer and steal windows, because they have 10 other people who are just going to buy a computer at best buy that has Windows preinstalled. Same goes for Adobe: they are targeting business not consumers. If you are going to use an adobe product, chances are you need the adobe product, so you don't have a choice. Charging a high price allows for more development and helps cover for the freeloaders.
I'm sure Microsoft is making the right call, why wouldn't they. They have people far smarter than you or I making these decisions. For all you know, 1,400 employees is a drop in the bucket, and may increase productivity.