Age of Empires Studio Canceled in Microsoft’s Latest Xbox Layoff Wave

Microsoft has canceled its next Age of Empires game as part of a fresh wave of layoffs and a sweeping corporate restructuring at Xbox, sending shockwaves through a studio that had long been the franchise’s beating heart. On Tuesday, the company announced cuts affecting 268 employees alongside a major reorganization that would shift the Halo series to Activision and hand Obsidian Entertainment to Bethesda Softworks. World’s Edge, the internal studio created in 2019 to oversee the Age of Empires franchise, was inherited by Activision in this shuffle, but it was simultaneously hit with job losses and the cancellation of its upcoming title. The news arrives as Xbox leadership signals a firm pivot toward a franchise-driven strategy, prioritizing existing blockbusters over new intellectual property.

The announcement builds on a turbulent period for the platform holder. In early July, Microsoft revealed it would immediately cut 1,600 employees, with further reductions planned for the next fiscal year. The company also divested from several of its most acclaimed studios, including Double Fine and Ninja Theory, while survivors like Doom developer id Software faced significant headcount reductions. This Tuesday’s wave of 268 layoffs represents another chapter in that ongoing contraction, and it has come with structural consequences that extend well beyond the numbers.

A Studio Cut in Half, a Game Scrapped

World’s Edge was hit hard by the latest job cuts. According to a post by former creative director Adam Isgreen on ResetEra, Xbox let go of just under half the studio, including Isgreen himself. Compounding the blow, software engineer Andrew Martz wrote on LinkedIn that, as part of the reorganization, Microsoft canceled its next project. Given that World’s Edge was established to oversee the Age of Empires series, the canceled title was most likely a new entry in the franchise, or perhaps a spinoff such as Age of Mythology.

“I guess it is time to pick up the pieces one more time,” Martz wrote in the post announcing the news, noting that he was laid off just seven days after receiving a promotion.

Andrew Martz

The timing and framing of these posts have drawn attention from the community, with many readers reflecting on the irony of a studio being dismantled at the very moment it was tasked with building upon a beloved franchise. Martz’s remark about picking up the pieces one more time underscores a broader sentiment across the layoffs: a sense of exhaustion and uncertainty among the workers who built much of Xbox’s current portfolio.

The Studio That Built the Franchise

World’s Edge was established by Xbox Game Studios in 2019 to manage the Age of Empires series, working alongside several external development studios such as Relic Entertainment, Forgotten Empires, and Tantalus Media on remakes and sequels. The studio contributed to the Definitive Editions of the first three Age of Empires games, a remastered version of Age of Mythology, and the all-new Age of Empires 4, which launched in 2021. With World’s Edge’s headcount now reduced and its next game canceled, the future of the franchise looks considerably dimmer.

The inheritance of World’s Edge by Activision adds another layer of complexity. Activision already absorbed the Halo series in this restructuring, and the studio’s new ownership may reshape how the Age of Empires IP is developed, marketed, and maintained going forward.

Looking Ahead

Xbox leadership has indicated it will prioritize a franchise-driven approach going forward, with most teams focusing on existing series over new IP. Since World’s Edge was already operating within that model with Age of Empires and still took significant cuts, it appears Microsoft is doubling down on a small pool of massive franchises such as Halo and Fallout. The message from the company is clear: consolidation and focus over expansion, even at the cost of beloved studios and their pipelines.

For fans of the Age of Empires series, the immediate question is what happens next. With the studio decimated and its next project scrapped, the roadmap for remakes, sequels, and new entries remains uncertain. Microsoft’s commitment to its biggest franchises is unwavering, but the studios that carry them forward are being reshaped faster than ever before.