The news is out, and it’s not pretty. id Software, the legendary studio behind Doom and Quake, has been severely gutted by a wave of mass layoffs at Xbox, with reports suggesting that around half of its employees have been let go. This devastating development comes hot on the heels of Microsoft’s announcement to eliminate 3,200 roles across its video game division, leaving many in the industry wondering what this means for the future of gaming and, more specifically, immersive experiences.
According to sources close to the situation, over 90 employees at id Software have been laid off, with some claiming that even the studio’s QA department has been decimated by the cuts. These layoffs are part of a broader restructuring effort at Bethesda, which is being reorganized around its biggest franchises. In an internal email obtained by IGN, president Jill Braff explained that the company will now focus on its strongest properties: Fallout, The Elder Scrolls, Wolfenstein, Doom, and Quake.
The reasons behind this radical shift in strategy are unclear, but it’s likely a bid to prioritize profitability over innovation and creative freedom. This is a worrying trend for VR enthusiasts, who rely on studios like id Software to push the boundaries of immersive gaming. Will Microsoft’s emphasis on its biggest franchises stifle the development of new, innovative experiences that showcase the true potential of VR?
It’s worth noting that this isn’t an isolated incident; Obsidian Entertainment, another Xbox-owned studio, is also undergoing significant restructuring, with reports suggesting around a quarter of its staff have been let go. The writing is on the wall: Microsoft’s ‘reset’ strategy appears to be all about cutting costs and prioritizing established franchises over new ideas.
The impact of these layoffs will be felt across the industry, but what does this mean for VR fans? Will id Software’s legendary team be able to regroup and find a way to continue creating innovative experiences, or will their departure mark the end of an era? As the gaming landscape continues to evolve, one thing is certain: the future of immersive gaming hangs precariously in the balance.
Source: Game Developer XR — 2026-07-07