Layoffs at World's Edge and Undead Labs mirror broader industry challenges amid significant corporate reorganizations.
The gaming industry is experiencing notable upheaval, marked by significant layoffs at two prominent studios. World’s Edge, the developer behind the popular Age of Empires series, has been substantially impacted following its transfer to Activision, with reports indicating that just under half of its employees have been laid off. This move follows the studio’s incorporation into Activision’s portfolio, shedding light on the potentially turbulent transitions that can accompany acquisitions. More on this story can be found at GamesIndustry.biz.
Similarly, Undead Labs, known for the State of Decay series, is witnessing a “significant” number of layoffs after its separation from Xbox was announced earlier in the year. Microsoft had previously signaled its intent to divest the Seattle-based studio, illustrating the strategic realignments happening within major tech companies as they reevaluate their gaming portfolios. For more details, visit Game Developer.
Market Adjustments: Revenues and the Impact of Policy
The financial landscape for game developers on platforms like Steam is also shifting. According to GameWorldObserver, the median revenue for games on Steam has been decreasing for 12 consecutive years. The data for 2026 reveals a median revenue of just $1,728 per title, a stark contrast to figures from a decade ago. This trend highlights the challenges developers face in a saturated digital marketplace.
Regulatory developments in the EU could further influence game developers, as outlined in a GamesIndustry.biz article discussing the EU KIDS Act. This proposed regulation introduces measures affecting games, particularly those with AI and online components, in a bid to create safer digital spaces for children. Although primarily targeted at social networks, the gaming industry must be aware of potential compliance requirements.
Corporate Insights
Regarding financial results, both Sony and Microsoft have released their earnings reports for the quarter. Sony has benefited from tariff compensation in the USA, bolstering PlayStation’s profitability, albeit maintaining a stable performance in its gaming division. Full details are available at GameWorldObserver.
Conversely, Microsoft reported a decline in its gaming division’s revenue as part of their overall earnings. Despite this downturn, CEO Satya Nadella remains optimistic about the broader corporate growth. For a deeper look, see GameWorldObserver.
Industry Movements
In corporate developments, the new game publisher PUBLSH has launched, bringing its first title, Pera Coda, inspired by Disco Elysium, to the market. Established by former executives from marketing agency Petrol, PUBLSH aims to carve out its own niche in the industry, as reported by GamesIndustry.biz.
Lastly, as Bethesda and Obsidian navigate their merger, assurances have been reportedly given to Obsidian staff regarding the preservation of their creative identity amidst what has been described as primarily a structural change within the organization. This insight is from Game Developer.
