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Report: Id Software and ZeniMax Online Studios will survive the "Xbox reset"

But unfortunately, they won't come out of this unscathed; sources say they, too, are facing layoffs.
Jonas Mäki Editor Sweden 6 July 2026

As we just reported, around 3,200 people in Microsoft's gaming divisions will lose their jobs as part of the Xbox "reset." The term was coined by Xbox head Asha Sharma, who believes it is necessary because the business is struggling.

For Double Fine and Compulsion, things seem to be ending on a reasonably happy note, as they're returning to being indie studios and appear to be retaining their intellectual property rights. Ninja Theory and Undead Labs, on the other hand, have found new owners, while Arkane is exploring various options.

The latter was part of the Bethesda acquisition, but what will happen to other studios that belong to Bethesda? Fortunately, the answer seems to be that they'll at least fare reasonably well (compared to being shut down). Bloomberg journalist Jason Schreier writes on Bluesky that while there will certainly be layoffs, both id Software (Doom) and ZeniMax Online Studios (The Elder Scrolls Online) will survive.

https://bsky.app/profile/jasonschreier.bsky.social/post/3mpydldy43226

This isn't an official source, of course, but Schreier is very rarely wrong, so if you've been worried about Bethesda's developers, it seems you can at least breathe a partial sigh of relief.

Editor Sweden Jonas Mäki has written for Gamereactor since 2002, becoming an editor in 2007. He covers the video game industry across news, releases and the business side, with a particular interest in sales figures and where the industry is heading.
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