Kevin LaChapelle, the Microsoft vice president of Xbox Platform who led the Xbox backwards compatibility and cloud gaming initiatives, has been laid off after 37 years at the company. His departure is part of a broader wave of layoffs affecting 3,200 staff across Xbox this financial year, with major studios and veteran executives impacted.
LaChapelle's Legacy and Reaction
In a LinkedIn post on July 7, LaChapelle confirmed his layoff, writing: 'I will add my name to the list of people who were laid off today at Xbox. This ends my 37 years at Microsoft. I have worked in many different parts of the company, and I will say my fondest memories are of leading the team of very talented engineers who built the Xbox backward compatibility program. Sitting in the auditorium when Phil [Spencer] announced the program at E3 2015 was incredible. The audience’s reaction was unbelievable. I followed that with leading the team who created our Cloud Gaming product.' He added: 'I am a firm believer that all entertainment will eventually become streamlined to you wherever you are. I look forward to watching how Xbox evolves going forward and I wish the team nothing but success.' Before Xbox, LaChapelle led development on Windows Movie Maker in 2000.
Studio Impacts and Independence Moves
The layoffs have already hit multiple Xbox studios. Compulsion Games and Double Fine have severed ties with Xbox and regained independence, while Ninja Theory and Undead Labs are being sold off. Arkane Lyon is reviewing its 'potential strategic options.' Reports indicate that Doom's id Software, ZeniMax Online Studios, and Bethesda Game Studios have also been badly affected.
Obsidian Entertainment Hit Hard
According to Kotaku, roughly 25% of Obsidian Entertainment—the studio behind Pentiment and The Outer Worlds 2—has been laid off, estimated at 60-70 people. Affected roles include animators, senior narrative designers, and system designers, some with decades at the studio. Obsidian is currently working on Grounded 2, released in early access in 2025, and has two story expansions planned for The Outer Worlds 2 with no release dates yet. Former Obsidian co-founder Chris Avellone indicated on X that a sequel to Avowed is also in development.
Ongoing Uncertainty
While 3,200 layoffs are planned over the coming months, the exact studios and individuals affected remain unclear. The cuts mark a significant restructuring for Xbox, removing key talent that drove beloved features like backwards compatibility and cloud gaming.
