Back in July, new Xbox CEO Asha Sharma announced a total of 3,200 job cuts across Microsoft’s gaming arm, with roughly half of those cuts being made alongside that announcement. The impact was vast. Various developers at Xbox studios, including Activision, Bethesda, Id Software, Blizzard, Mojang, and King suffered layoffs. Double Fine and Compulsion were thrust into independence, while Dishonored 2’s Arkane Lyon, State of Decay 3’s Undead Labs, and Hellblade’s Ninja Theory entered terms for new ownership.
Then, two weeks ago, Xbox made more sweeping cuts. Halo Studios has been drastically reduced in size, with Activision taking control of the sci-fi franchise. Rare and World’s Edge were shunted under Activision’s umbrella, with the Age of Empires studio reportedly losing roughly half its developers in the process. Obsidian was absorbed by Bethesda, and Ninja Theory entered a consultation process in preparation for a potential closure as its new ownership deal fell through. Undead Labs suffered heavy layoffs as it went independent, while Arkane Lyon is still in a period of consultation with its staff. At least 268 more roles were eliminated in total in that latest round, though it’s unclear whether these also include the developers at the likes of Ninja Theory and Undead Labs.
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But there’s been one Xbox-owned studio left largely off the cutting block so far: Gears of War: E-Day developer The Coalition. Now, following the latest wave of Microsoft cuts – including the sudden departure of E-Day’s story director, Juan Vaca – Eurogamer has learned staff at the studio have become increasingly fearful of imminent layoffs, and the potentially major financial consequences which could follow. Eurogamer spoke to multiple sources at the Vancouver-based studio with knowledge of the situation for this article, who have been provided anonymity to protect their identity.
It’s worth noting that this sense of trepidation wasn’t always the case. Before the latest round of Xbox layoffs, developers at The Coalition had been cautiously optimistic. They believed The Coalition had been spared the cuts, at least thus far, for two main reasons: first, they were working on a big, imminent release for Xbox, in the upcoming Gears of War: E-Day – laying off developers still working on a game would make little sense.
Second, the studio maintains a status as one of Xbox’s “good children, so to speak”, as one source put it to Eurogamer. The studio’s official site, for instance, describes it as “a flagship first-party studio within Xbox Game Studios” and the “home to one of gaming’s most critically and commercially acclaimed series” in the long-running Gears of War. Xbox leadership, meanwhile, has largely had a “hands-off” approach to managing the studio over the years, which was, at least for The Coalition, a situation that had seemingly been working well. Those two factors combined to create a sense of relative safety.
Naturally, the knowledge that Xbox still had many job cuts to go still had an impact on morale. Prior gut-punches, such as Tango Gameworks’ shock closure after the release of the critically-acclaimed Hi-Fi Rush, were “still on everybody’s minds”, as oneage of Xbox’s self-described reset. But the belief continued that it simply wouldn’t be smart to “cannibalise” the studio
Another source had similarly mixed feelings at the time. They felt Microsoft had “faith” in The Coalition, following years of positive support, and that development of Gears of War: E-Day itself was in a good place. But they too felt uneasy, following the first 1,600 job cuts and massive restructuring, describing the mood as “cautious”, with the remaining, unspecified layoffs of the 3,200 said to be “hanging over our heads.” Energy at the studio was “not full death-march”, but at least muted, as they put it, and would likely remain so until three-months after E-Day’s release. “The mood is certainly ‘let’s not celebrate the game until we’re three months post launch, just in case’, which is very unusual,” they said.
Notably, this same source claimed the team had been “crunching hard” in the final months before E-Day’s launch, but even then, at the time the atmosphere still wasn’t overtly negative. This strenuous push towards the finish line by E-Day developers, for instance, was rewarded with extra vacation time. While the amount given varied from person to person, gestures such as these – despite the crunch – were cited as helping to alleviate worries among staff. Regarding the practice of crunch itself at the studio, Eurogamer understands the internal position is that “extra work” is viewed as occasionally necessary for games such as this, and there is an acknowledgement the team has been working “incredibly hard” on E-Day. The issue of crunch remains a major issue in game development, despite much reporting on the matter and promises of changed culture at various studios over the years.
Ultimately, combined with The Coalition having been largely sheltered from Microsoft’s cuts at the time, the sense earlier this summer was that Xbox was “invested” in long-term support in the studio. Cautious optimism remained the ruling sentiment.
That feeling had persisted – until this month. Last week, Gears of War: E-Day’s story director Juan Vaca announced he had been laid off as part of Microsoft’s cuts, barely two weeks before the game’s release. At that time it was unclear how many other developers had been cut. A source speaking to Kotaku claimed a “handful” of developers were also laid off from the studio, shortly before Vaca, for reasons separate from the wider Xbox layoffs. Multiple sources have also told Eurogamer that staff were quietly let go at The Coalition in the past few weeks.
Their departure, along with Vaca’s, has taken a hammer to the remaining optimism at the studio. Oneut it: “I can only imagine the heartbreak of spending all those years on a game to have the final stretch ripped away, completely out of your control. It’s like you planned for a year on a meal for your family where everyone will be there and the day of, you get locked out of the building or something and can’t join in.”
Coalition developers as a result are “unhappy about it and on edge”, they added, “because we honestly expected the layoffs to hit us post-release, but that seems to not matter now. Now we’re just expecting the next wave, or being reorganised under Activision or something later this year.”
Beyond the stress, meanwhile, Vaca and others’ departures have also raised concerns of a financial nature: staff are now concerned that, were they to be laid off within a few weeks of Gears of War: E-Day’s release as some fear, they may miss out on potentially lucrative Metacritic bonuses.
The existence of this bonus scheme itself isn’t irregular; Metacritic bonuses tied to a game’s critical reception have been an established practice at game development studios for years. Likewise the stipulations involved are standard. An internal email, verified by Eurogamer, confirms the existence of this bonus and its relatively typical nature.
However, given the threat of ongoing Xbox cuts, one aspect of this Metacritic bonus has become a cause for concern. In order to be eligible to receive the bonus, developers must be full-time employees at the time of the payout. Studio leadership have communicated to The Coalition developers that this payout date “should be near the end of October”, as one
As a result, it has been unclear to developers still at the studio and who have recently left whether those such as Juan Vaca, who were recently laid off by Xbox and therefore are no longer employed at The Coalition – but will technically still be on payroll at the time of the payout in late October – will receive this bonus if the game hits its targets. Eurogamer understands that despite concerns, those recently impacted, such as Vaca, will still receive their bonuses if the targets are met.
What remains uncertain, however – and crucially so for developers at The Coalition today – is the question of what happens to current staff’s bonuses if they are laid off immediately following the release of Gears of War: E-Day as some now fear. As of now, it is still unclear whether these developers would receive their Metacritic bonus.
As a result, aacritic bonus payout has now become a “morbid joke” among members of the team. The assumption among them, for instance, had been that Vaca would not be receiving his bonus, which could account for tens of thousands of dollars. The possibility of layoffs before the bonus payout has become the “biggest concern” among staff
Multiplen laying off large numbers of staff and cutting multiple studios, has also manifested in a significant amount of scepticism, with some at The Coalition expecting an attempt to “avoid” paying out Metacritic bonuses to any developers hypothetically laid off just before or right after E-Day’s release
Anothere payout should technically be eligible for the bonus, they still remained doubtful: “It’s hard to believe anything [Microsoft leadership] say anymore after discarding staff in this manner,” they explained. Another expressed similar scepticism, saying they “wouldn’t put it past Microsoft” to try and avoid paying these bonuses out to any potentially laid off employees
One more put it like this: “There was a general perception here that we’re in a relatively secure spot, despite everything in the industry. But now that feeling is up in the air.”
All in all, Xbox’s “reset” has, in a matter of months, taken the morale of a strong studio, on the eve of an exciting triple-A release, and turned it sour. With continued cuts planned across Xbox, estimated to still be in the many hundreds at least, time will soon tell whether these fears are unfounded, or if what should be a celebratory milestone for The Colition’s developers is spoiled by decisions made far above their heads.
Xbox declined to comment on the record when approached by Eurogamer about the claims in this report.
