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The Great Reset: Xbox Layoffs Hit Bethesda Hard, But What Does It Mean for Our Favorite Games?

July 11, 2026 JauntyM 0
The Great Reset: Xbox Layoffs Hit Bethesda Hard, But What Does It Mean for Our Favorite Games?

Big news from the gaming world, and unfortunately, it’s not the kind we usually celebrate. Microsoft’s Xbox division has been going through a massive restructuring, resulting in widespread layoffs, and our beloved Bethesda studios haven’t been spared. We’re talking about hundreds of talented individuals from Bethesda Game Studios (the masterminds behind Fallout and Elder Scrolls), id Software (the Doom legends), and ZeniMax Online Studios (ESO’s creators) facing the axe.

This isn’t just about cutting costs; it’s a strategic shift. Xbox’s new CEO, Asha Sharma, is pushing for studios to work much closer together, with a sharp focus on their biggest, most successful franchises like Halo, Minecraft, Fallout, and The Elder Scrolls. Bethesda boss Jill Braff echoed this sentiment, explaining that these changes are about “operating from a more stable foundation” and ensuring “sustainable growth.” Essentially, they’re moving away from each studio doing its own thing towards a unified, franchise-first roadmap.

The Elder Scrolls 6: Delays, Worries, and Union Action?

Now, for the news many of you have been waiting for, and perhaps dreading: The Elder Scrolls 6. Despite being announced way back in 2018, it’s reportedly still at least two years away. And these recent layoffs have understandably caused a ripple of anxiety among the development team.

Insiders have shared worries about a “substantial and cascading effect” on the game’s development, leading to morale dips and fears of intense crunch periods. There’s even talk of potential delays and the possibility of skilled staff being replaced by cheaper, contracted labor, which could further complicate things. The BGS union, OneBGS, isn’t taking this sitting down, planning a march to pressure Microsoft to negotiate. However, amidst all this, sources close to Bethesda insist that the studio’s ambitious plans for TES6 remain unchanged, and the game is still on track – even if “on track” means a couple more years of waiting.

Fallout Frenzy: New Games, New Vegas Devs, and Fallout 5!

Good news for Fallout fans though! It seems Xbox wants more Fallout, and they want it faster. Rumors are buzzing that Obsidian Entertainment, the brilliant minds behind Fallout: New Vegas, are now working on a brand-new Fallout game, with Bethesda lending support. This is a huge deal, promising a fresh take on the wasteland from a beloved studio!

And that’s not all. Apparently, there are several Fallout projects cooking across Bethesda and its partners, including the highly anticipated Fallout 5. Todd Howard himself has confirmed it’s coming after TES6 and will even tie into the hit Fallout TV series canon. So, it’s definitely happening, eventually! Fallout 76 is also going strong, with hundreds of developers and millions of players, and Fallout Shelter is still kicking. Plus, Season 3 of the Amazon show is filming, and a Fallout 3 remaster is practically an open secret. So, get ready for a whole lot more trips to the nuclear wasteland!

The Elder Scrolls Online & Starfield: What’s Their Fate?

The Elder Scrolls Online, unfortunately, has seen its development roadmap shift due to the layoffs. While the team is working on new seasons, they’re also looking to collaborate more with Bethesda Game Studios, possibly even to help with TES6.

Then there’s Starfield. Fans noticed it wasn’t explicitly on the “priority” list in the new strategy. While it didn’t quite hit the mark for everyone at launch, updates and content are still planned. What exactly that means for future expansions or a sequel is hazy, but there’s even talk of a Nintendo Switch 2 version being in the works!

Arkane, Blade, id Software, and MachineGames: Updates

Arkane Lyon, the studio behind Deathloop, is currently in a tough spot, reviewing “strategic options.” But there’s hope they’ll find a buyer and that the exciting Marvel’s Blade game, which was reportedly on track for an early 2025 reveal and a late 2027 launch, will still see the light of day.

id Software, the legends who gave us Doom, released a statement reassuring fans. They acknowledge the impact but insist they still have the talent and resources to build “great games” and their proprietary id Tech engine is well-staffed. They’re back to the size they were when making the acclaimed Doom 2016 and are prototyping new ideas, including a potential John Wick-style IP or a new Perfect Dark! MachineGames, the studio behind Wolfenstein, seems to have dodged the immediate cuts and is reportedly working on Wolfenstein 3. However, the future of an Indiana Jones and the Great Circle sequel remains uncertain.

The Bigger Picture: Xbox’s Challenging Future

This whole situation is a stark reminder of the tumultuous times in the gaming industry. Xbox CEO Asha Sharma called it “the most significant restructure in Xbox history.” Beyond simply making profit, Microsoft faces huge questions about its ability to consistently deliver hit games and grow Game Pass subscriptions.

With rumors swirling about the future of Xbox itself – from potential spin-offs to selling parts of the business – and even whispers of the next-gen Xbox console costing over $1,000 (approx. Rs 278,000), it’s clear the coming years will be crucial. Could The Elder Scrolls 6 even launch alongside this pricey new console? Only time will tell, but one thing’s for sure: the gaming landscape is changing fast, and we’ll be here to keep you updated every step of the way.

Note: PKR figures are approximate, based on a rate of Rs 278.00 per USD. Exchange rates fluctuate — please check the latest dollar rate for exact pricing.

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