Two Xbox executives have announced their departures this week, adding to the uncertainty surrounding Microsoft's gaming division as it undergoes significant changes, including declining revenue, a shift back to exclusive titles, and revisions to Project Helix. Reports suggest layoffs are expected later this month, with speculation that Xbox could become a separate subsidiary under Microsoft.
Key Resignations
Craig Duncan, head of Xbox Game Studios, is leaving Microsoft after 18 months in the role. He oversaw first-party developers such as Halo Studios, The Coalition, and Ninja Theory. Duncan joined Microsoft in 2011 as a senior studio director at Rare, where he spent 14 years overseeing the Kinect era and the launch of Sea of Thieves. In an email to staff, he said: 'When I stepped into the role of leading Xbox Game Studios 20 months ago, my purpose was to serve our studios, our teams, and the people making our games. Together, we set out to deliver high-quality games, strengthen the cultural fabric across our studios, and help shape the future of the business. I’m proud to say we delivered many flawless launches that drove business success for the company.'
Louise O’Connor, a former colleague at Rare who was promoted to chief of staff at Xbox Game Studios in August 2025 after the cancellation of Rare’s Everwild, is also leaving. In the same email, Duncan praised her: 'Louise has been a thoughtful, creative, and trusted partner who has consistently championed the craft and supported our studios with clarity and care. I’m grateful for everything she’s brought to Xbox Game Studios, and I’m sure she’ll be successful in whatever comes next for her.'
Layoff Rumors
While the reasons for the resignations are unclear, they are likely linked to the reported layoffs. Current rumors suggest thousands of job cuts across the Xbox division, potentially including the closure of at least one entire studio. Rare could be at risk, which might explain the departures. Following Duncan’s exit, Xbox’s first-party studios will report to chief content officer Matt Booty until a replacement is found.
These developments come amid broader turmoil at Xbox, with the company facing declining revenue and strategic pivots. The gaming community is closely watching for further announcements.
