Craig Duncan assumed leadership of Xbox Game Studios in October 2024.
Xbox Game Studios is preparing to appoint its third head in two years, with Craig Duncan expected to resign this week as Microsoft’s gaming division braces for significant layoffs. Duncan, who has led the studio since October 2024, is stepping down according to a memo obtained from a reliable source.
As Duncan departs, teams including Halo Studios, The Coalition, Playground Games, Rare, Obsidian, Ninja Theory, and Double Fine will now report directly to Matt Booty, the chief content officer of Xbox, until a successor is named. Additionally, Louise O’Connor, who took on the role of chief of staff at Xbox Game Studios last year, is also anticipated to leave.
The exits occur shortly after an unsettling memo from Booty and Xbox CEO Asha Sharma was disseminated to employees. This memo discussed a “reset” plan for the business due to falling revenues. It outlined concerns such as rising hardware costs and increased competition for player engagement. The executives asserted that Xbox has become “overextended” after acquiring numerous studios over the past decade, and admitted that insufficient funding has hindered these studios from being competitive.
Around the same time, reports indicated that Xbox is gearing up for another wave of layoffs, with these expected to commence after the end of Microsoft’s fiscal year on June 30. Earlier this year, Microsoft had already cut about 1,900 jobs within its gaming division and, in July 2025, announced an additional 9,000 job cuts across the entire company, affecting many within Xbox, which also saw several game cancellations and studio closures.
Responding to inquiries about the recent memo during a conference, Microsoft CEO Satya Nadella commented on the need for innovation in both hardware and gaming in a financially viable manner. He emphasized that, after 25 years of investment in Xbox, it is now vital to transition the venture into a sustainable business model.
