Microsoft cuts prompt Xbox digital future questions

Microsoft's decision to cut 1900 staff members has reportedly seen the company's games retail teams reduced, prompting fresh questions over Xbox's future in the physical games business.

Writing on X, Windows Central's Jez Corden said Microsoft had "shut down departments dedicated to bringing Xbox games to physical retail".

Is this the end for boxed Xbox games? Perhaps not yet, Corden continued. Microsoft can outsource physical game production and may be consolidating teams across departments. But the news it has cut staff working on physical game releases comes after Microsoft accidentally revealed it had planned for a digital-only console future as early as this year. And only last week, Microsoft said that one of its key games for this year - Hellblade 2 - would be a digital-only launch.

"There are certain AAA games with 80 percent plus digital shares on Xbox these days so it's not too surprising," video games industry analyst Daniel Ahmad wrote in response. "Indicative of how next gen will be for sure."

Eurogamer has contacted Microsoft for comment on its physical game release plans.

Microsoft's plans to replace the current Xbox Series X with a digital-only refresh were included in the enormous cache of files it accidentally uploaded to an FTC server last September.

Those plans, which dated from April 2022, described an "adorably all-digital" machine to launch this year, that drew less power, allowed for faster Wi-Fi and featured 2TB of internal storage.

Xbox boss Phil Spencer later acknowledged the leak but said it featured "old emails and documents", and said that "so much has changed" - though whether the company still had a digital-only Xbox Series X in mind, he did not say.

"It's a good thing Microsoft now says its 'adorably all digital' future plans are outdated," I wrote at the time. "They suggested a potentially different path to Sony, and poorer game preservation as a result."