Xbox Game Studios' leadership is in flux as its head, Craig Duncan, exits this week. Duncan, who took the helm in October 2024, will have his studios — Halo, The Coalition, Playground, Rare, Obsidian, Ninja Theory and Double Fine — report directly to Matt Booty, the chief content officer, until a successor is named. Chief of staff Louise O'Connor is also departing.

Booty and Xbox CEO Asha Sharma circulated a memo warning of a “reset” after revenue slipped, citing rising hardware component costs and stiff competition for player attention. The note admitted the division had become “over‑extended” following a decade of studio acquisitions that were never fully funded. Bloomberg links the memo to an upcoming mass layoffs wave slated for post‑June 30.

Microsoft already cut roughly 1,900 gaming jobs earlier this year and trimmed 9,000 positions company‑wide in July 2025, shuttering studios and canceling titles. Satya Nadella told a recent conference that the next challenge is to innovate hardware and games “in an economically viable way” after 25 years of investment. The leadership shuffle underscores a push to stabilize Xbox as a profit center.