Craig Duncan took over as CEO of Xbox Game Studios in October 2024.
Xbox Game Studios is set to find its third leader in the space of two years, amid reports that Microsoft’s games division is preparing another round of major layoffs. Current head of Xbox Game Studios Craig Duncan, who took office in October 2024, is resigning this week, according to a memo obtained by The gaming business.
Duncan’s teams – which include Halo Studios, The Coalition, Playground Games, Rare, Obsidian, Ninja Theory and Double Fine – will report directly to Matt Booty, Xbox’s head of content, until a replacement is named. Louise O’Connor, who became chief of staff at Xbox Game Studios last year, is also reportedly leaving.
Duncan and O’Connor are leaving days after Booty and Xbox CEO Asha Sharma sent a disturbing public memo to employees discussing a “reset” of the company after a drop in revenue. The memo points to the increasing costs of hardware components and competition from other forms of entertainment for gamers’ attention as other factors of concern. Executives also claimed Xbox was “overextended” after buying up so many studios over the past 10 years, saying “we haven’t funded them enough to compete and win.”
Booty and Sharma sent the memo just as Bloomberg reported that Xbox is preparing for another round of massive layoffs. The layoffs are expected to begin after Microsoft’s current fiscal year ends on June 30. Microsoft cut about 1,900 jobs in its gaming division in early 2024. In early July 2025, it announced it would cut 9,000 jobs across the company. Many of them belonged to Xbox, which canceled several games and closed a studio.
Asked at a conference last week about the memo shared by Sharma and Booty, Microsoft CEO Satya Nadella said: “The challenge now for us is to think about how to innovate both in hardware and in games, in a way that is economically viable.” He added that after 25 years of Microsoft’s investment in Xbox, “we now need to make this a sustainable business.”
