Xbox revenue declines and Double Fine cuts staff

July has been a brutal month for the video game industry. Sadly, the months beforehand haven’t been much different.

Hardware continues to get more expensive, developers continue to get laid off in masse, and company executives continue to invest billions in the promise of generative AI.

Hope is hard to find these days, and distractions grow scarcer. Everyone on Bluesky continues to discuss that one review of The Odyssey, and my Instagram algorithm gets increasingly more cursed each day.

As a journalist and critic who covers the video game industry in a plethora of ways, the next couple of months should be an enticing prospect, with literally every video game on Earth seemingly releasing one after the other. Let’s just say the general vibes make it hard to muster the proper enthusiasm.

Yet, developer creativity hasn’t waned, and folks continue to fight for a better future. Whether it is in the form of smaller games or by continuing to share insights about an ever-evolving industry, there’s always something to look forward to and learn from. It’s important to stay informed, sure, but also to hold onto these scarcer, yet ever-present beacons.

via Double Fine // Regaining independence from Xbox maker Microsoft has come with a cost, as the developer of the Psychonauts series has laid off 23 staff members. This comes weeks after Microsoft outlined plans to eliminate 3,200 roles across its video game division, a move that also involved parting ways with multiple studios. “As a small, tightly-knit team, these actions are not taken lightly,” reads the statement from Double Fine, penned by studio boss Tim Schafer. “Only the survival of our studio would ever make us consider such a painful action. Our transition to becoming an independent company also means becoming a size that we can sustain.”

via Game Developer // The barrage of layoffs in the past couple of years have real consequences. As columnist Nicole Carpenter explains in a new report, institutional knowledge is key to making games, and its value is being eroded with each wave of job cuts. “Studios need to invest in technical writers and archivists to preserve this kind of thing, but that doesn’t directly contribute to a product so you rarely see anyone doing it,” senior technical producer Shayna Moon told Game Developer.

via Game Developer // If you read last week’s Patch Notes, then you know senior news editor Chris Kerr’s devotion for Poinpy is immeasurable. So much so that he pretty much immediately reached out to Devolver Digital to learn how the effusive mobile platformer, which was previously delisted from Netflix Games, was brought back from the dead. Come for the insight on mobile exclusivity deals, stay for the lovely concept art at the bottom of the article.

via Game Developer // In the company’s latest 10-K filing, Xbox reported that revenue decreased by 7 percent, a mere $1.7 billion, during the fiscal year ended June 30, 2026. According to Microsoft, that downturn was driven by a decline in Xbox content and services and diminishing console sales. Console revenue, specifically, has been in decline for some time, but that hasn’t stopped the company from increasing the price of flagging Xbox hardware, attributing the latest price hike to the component crisis driven by widespread investment in AI data centers. Meanwhile, via Bloomberg, Microsoft reportedly poured over $130 billion in new data center leases. Go figure.

via Mike Blubnika, GDeavid, and Oro Interactive // Mike Blubnika, the main developer of Buckshot Roulette, has steadily released a game a year since 2023, starting with Unsorted Horror and following up with S.p.l.i.t. last year. The latest, in collaboration with GDeavid and published by Oro Interactive, is a series of gruesome party games where failure is lethal. A good alternative for the weekend if you’re tired of seeing Luigi get away with the majority of stars.

via Radio Times Gaming // In a recent video interview, which was spotted by MP1st, The Blood of Dawnwalker director Konrad Tomaszkiewicz says that he doesn’t want to measure the studio’s games in millions of sales, as this thinking can hinder the design process. “If it’s possible, maybe some awards, which would be excellent for us as artists,” he added. “Not in the sales, because sales are secondary. I believe that if the game is good, there will be sales. But if you’re thinking about the sales when you create the game, and you try to design the game to achieve sales, it will fail.”

via Messhof // Blood Dungeon, introduced as a 2D platforming autoshooter, releases on August 25. Messhof shared the news via social media, where it has been sharing gameplay video snippets for the last month. It looks delightful, and its arcade spirit is an intriguing return-to-roots after the team worked with Annapurna Interactive on Wheel World.

via Game Developer // Resident Evil Requiem, the latest mainline entry of the zombie series by Capcom, has sold over eight million units in cumulative sales. When it comes to the series as a whole, the figure sits at 213 million units. Capcom notes the franchise continues to “increase in popularity with a broad, global audience while sales of the previous titles in the series also grew steadily due to pricing initiatives.”

I wonder exactly what is drawing people to the Resident Evil games. Unrelated, here’s a bumper sticker I came across last month.