No one is suggesting that Microsoft should stop making video game hardware. What we've been considering, here in the dark and twisted Engadget Slack channels, is whether Microsoft should keep making generationally distinct consoles in the traditional hardware cycle. Basically, does Xbox need a box? Microsoft has been busy building the foundation of a platform-agnostic, cloud-first future for video games, and it consistently falls behind both Sony and Nintendo in the console race. So why are executives trying to get us excited about a superpowered 10th-gen Xbox?

Maybe Microsoft is hesitant to reveal a drastic ecosystem change after the chaos around the Xbox One and its always-on DRM features in 2013. After an outpouring of negative feedback at the idea of a persistently online console, Xbox had to rapidly reverse its launch plans, while Sony took the PlayStation 4 on an early victory lap. This fumble set the stage for the next decade of console sales, and it's a lesson that would stick with any studio — especially one that's trying to make streaming and cloud gaming the norm.

That's understandable, but it doesn't change the fact that accessible, affordable (and probably handheld) hardware makes a lot of sense for Microsoft's current vision and investments. More than an expensive console, at least.

This week's stories

A delicious Elden Ring entrée

Elden Ring’s Shadow of the Erdtree expansion will come to PlayStation, Xbox and PC on June 21. This one has been a long time coming: FromSoftware announced the DLC in February 2023, leaving plenty of time for players to get super psyched for more masochism. A new, three-minute trailer for Shadow of the Erdtree shows off sprawling locations and epic bosses inspired by chaotic combinations of animals, insects and elements. The expansion costs $40 and pre-orders are live now.

Borderlands by Cate Blanchett

I’m just gonna come out and say it: I think Cate Blanchett makes a great Lilith. The first trailer for this summer’s Borderlands movie is out and it looks like Mad Max meets Guardians of the Galaxy — which is Borderlands in a nutshell anyway. The film stars Blanchett, Jamie Lee Curtis, Kevin Hart, Jack Black and Ariana Greenblatt, it’s directed by Eli Roth, and it’s due to hit theaters on August 9.

Xbox should exit the console business

Last Thursday, Xbox executives made it clear that they weren’t about to abandon the traditional hardware market, and they teased a next-generation console that will represent “the largest technical leap you will have ever seen.” That’s cool, but considering Microsoft’s position in the industry, it doesn’t feel like Xbox needs to be making consoles any more.

After acquiring half of the industry, Microsoft is now a mega-publisher of games, with over 30 in-house studios. Many of these development teams are world-renowned, with rich, multi-platform histories. It’s also the operator of one of the largest game subscription services in the world, Game Pass.

Game Pass grew wildly during the pandemic, but subscriptions have stagnated. In court documents from April 2022, Microsoft revealed it had 21.9 million Game Pass subscribers and 11.7 million Xbox Live Gold members across its consoles, for a total user base of 33.6 million. Last week, Microsoft revealed Game Pass has 34 million subscribers, which includes PC Game Pass and Game Pass Core, the new name for Xbox Live Gold. Even assuming PC Game Pass had zero subscribers in 2022, this means Game Pass subscriptions grew just 1 percent over the past 22 months. The more likely scenario is that the total number of subscriptions actually shrank over this period — though it’s at least possible that more people are paying for the full-price service than before.

Microsoft’s plan for this console generation was clear for all to see: Sell hardware and upsell a subscription service populated by its own games. Turns out, it’s tough to sell Game Pass to someone without an Xbox, and not enough people are buying Xboxes. Microsoft stopped reporting hardware numbers during the Xbox One era, but analysts peg the combined sales of the Xbox Series consoles at around 25 million. Meanwhile, Sony has sold more than 50 million PS5s, and Nintendo has sold around 140 million Switches. This gap appears to be growing every day, and it’s far more pronounced in Japan and Europe than in the United States. If Microsoft wants to grow Game Pass, it seems like it’ll have to be on platforms outside of Xbox.

This week, Xbox confirmed plans to bring four formerly exclusive games to PlayStation and Nintendo consoles, and for years executives have been pitching an ecosystem where Xbox — and Game Pass — is playable on anything with a screen. Microsoft has a powerful cloud network that even Sony uses for game streaming, plus it owns more than 30 studios. Long-term, Microsoft is positioning Xbox to be a platform-agnostic, software-publishing powerhouse with the industry’s most stable streaming network at its back.

In this landscape, it’s surprising to hear Xbox talk about building a hyper-powered console for the next generation. I’m not advocating for Microsoft to ditch the hardware market — it makes sense for the company to focus on handheld devices and affordable streaming boxes that support Game Pass and cloud play. Xbox is working toward a future where its games and Game Pass are available everywhere, which raises a clear question about its current plans: Why bring an expensive next-gen console to a war that is actually about software, subscriptions and streaming?

Bonus Content

• Sony president Hiroki Totoki told investors last week that the company would be more aggressive in bringing its PlayStation titles to PC.

• Xbox has confirmed which of its games are coming to other consoles: Grounded and Pentiment will come to PlayStation and Switch, while Sea of Thieves and Hi-Fi Rush will only arrive on PS5. Both Sea of Thieves and Grounded will support crossplay across all platforms.

• Now for a totally different port: The Pokémon Company has scheduled an anniversary stream for next Tuesday at 9AM ET. It might be a bit early for a gen-10 reveal, but a Switch remake of Black & White seems like a safe bet.

Now Playing

If you’re a Switch or PlayStation player curious about all of these Xbox games coming to your consoles, I have one easy and clear recommendation: play Pentiment. Obsidian’s narrative-driven, tapestry-looking game is a surprise and a delight, and I’ve had a lot of fun playing it on Game Pass recently. It's out now on PS4, PS5 and Switch, and I’m sure it’s just as great on those platforms.

The first Activision Blizzard game to join Xbox Game Pass will be Diablo IV, and it's due to land on March 28. The move means Diablo IV will be playable on Xbox and PC at no extra charge to Game Pass members — of which there are 34 million, Xbox announced today. 

This is just the first step in Xbox's broader plan to offer Activision Blizzard titles in its monthly subscription service, now that Microsoft fully owns the studio.

"There will be even more to play as we begin to fulfill our commitment to offer Activision and Blizzard games with Game Pass, both new releases and classic games from its legendary catalog," the Xbox Wire reads. Xbox plans to share more information about additional Activision Blizzard titles hitting Game Pass "soon."

Microsoft acquired Activision Blizzard in October 2023, after nearly two years of antitrust investigations from authorities in the United States and abroad. The deal was worth nearly $69 billion, the largest in Microsoft's history. As part of negotiations with regulators, Microsoft agreed to offload the streaming rights for Activision Blizzard games onto Ubisoft, opening the door for their inclusion in Game Pass, Ubisoft+ and other cloud services.

In the US, the FTC is continuing to investigate the acquisition and recently accused Microsoft of misrepresenting its plans for Activision Blizzard following a round of layoffs in January that affected 1,900 employees across the company's gaming segments.

There aren't enough games with queer characters and themes — and GLAAD, the world's largest LGBTQ media advocacy group, has the statistics to prove it. GLAAD's first annual report on the video game industry found that nearly 20 percent of all players in the United States identify as LGBTQ, yet just 2 percent of games contain characters and storylines relevant to this community. The report highlights three critical truths: Representation matters a lot to LGBTQ players, the remaining gaming audience largely welcomes these themes, and new generations of gamers are only becoming more open to queer content.

GLAAD has the numbers, so let's take a deeper look alongside a few bits of gaming news from the past week:

This week's stories

Xbox rumor mill

Xbox is preparing to address a bunch of rumors on Thursday about the company’s plans to bring its exclusive games to PlayStation, Switch and other platforms. The rumors have centered on major releases like Indiana Jones and the Great Circle and Starfield, but according to The Verge’s Tom Warren, the first titles scheduled to make the leap are Hi-Fi Rush and Pentiment. Nothing has been confirmed yet, but Xbox’s top gaming executives, Phil Spencer, Sarah Bond and Matt Booty, will chat about all of it on the next installment of the Official Xbox Podcast, which drops at 3PM ET on Thursday.

Ubisoft pledges to be good again

Ubisoft CEO Yves Guillemot said on an investor call last week that the studio is officially going to make good games again. Talking about the company’s positive third quarter, Guillemot said it “marks the beginning of our turnaround to consistently creating and delivering high-quality, long-lasting games,” which sounds like a tacit admission that Ubisoft hasn’t been producing great games recently. This is something I’ve talked about a lot — it feels like the studio has been coasting on NFTs and free-to-play mobile titles since a period of financial turmoil in 2015, and I’m actually excited to see a return to its weird, more focused roots. Assassin’s Creed Mirage and Prince of Persia: The Lost Crown were great first steps. Ubisoft plans to reveal more details about Star Wars Outlaws, the new Assassin’s Creed set in Japan and its mobile lineup in May.

Gaming has never been gayer

“The game industry is out of step with contemporary media in terms of LGBTQ representation, and it is failing its LGBTQ customers.” That’s one of the breakout lines from GLAAD’s first annual gaming report, which analyzes the state of the video game industry from the perspective of lesbian, gay, bisexual and transgender players in the United States.

In its survey, GLAAD — the world’s largest LGBTQ media advocacy group — found that 17 percent of the total gaming audience identifies as LGBTQ, or about one in every five players. This figure falls in line with statistics for Gen Z. Still, just 2 percent of all games on the market contain LGBTQ content, a saturation level that falls miserably short of those in film, TV and other forms of media.

GLAAD ran the numbers itself: In November 2023, the Xbox store had 146 games with LGBTQ content, while PlayStation offered a list of 90 titles with these themes, and the Switch eShop had 50 games tagged LGBT. Steam had 2,302 English-language games under its LGBTQ+ tag, but that figure dropped to 1,506 when filtering out “adult only sexual content” titles. All told, queer games composed roughly 2 percent of the stores’ libraries.

In contrast, GLAAD found that almost one in three films from the top distributors in 2022 contained an LGBTQ character, and LGBTQ characters appeared as series regulars in 10 percent of primetime scripted broadcast shows in 2022 and 2023. GLAAD Associate Director of Gaming Blair Durkee said that, with queer representation at just 2 percent, gaming remains woefully behind other entertainment industries.

The report also tried to identify why this gap exists. It suggested some developers simply don’t think about including LGBTQ people, or they worry about pushing away a core audience that they assume is hostile toward LGBTQ content. However, the report says, “This imagined core audience is a myth,” considering LGBTQ people compose nearly 20 percent of the market on their own. Critically, GLAAD found that more than 60 percent of non-LGBTQ players weren’t bothered by queer protagonists in their games, and 70 percent said they were fine with titles that presented the option to play as an LGBTQ character.

So this type of representation doesn’t bother most straight, cisgender people, but it means a lot to LGBTQ players. 72 percent of LGBTQ players said that seeing characters of their gender identity or sexual orientation portrayed well made them feel better about themselves, and this number was even higher among younger players. Overall, 36 percent of LGBTQ players reported that video games helped them discover their sexual orientation or gender identity, and this percentage rose to 41 percent among LGBTQ players of color. More than 40 percent of queer players said video games helped them cope with a lack of acceptance in the real world. These issues are more prominent than ever amid an avalanche of anti-LGBTQ legislation: Already in the first few weeks of 2024, more than 500 anti-LGBTQ bills have been proposed or passed in the US, a majority of which target transgender youth.

While GLAAD found that 66 percent of all LGBTQ gamers said they use gaming to express themselves in ways they don’t feel comfortable doing in the real world, this statistic rose to 75 percent for players living in states with proposed or active anti-LGBTQ bills.

The real key is that more gamers identify as LGBTQ than ever before, and resistance toward these themes is waning with each new generation of players. I’m part of the LGBTQ community, and I can say that overall, the GLAAD report rings true. It feels like the industry is saturated with games that weren’t made for me, and there’s an immense joy that comes with discovering a new title that speaks to my own life or lets me play in a world that doesn’t involve traditionally straight-male power fantasies. Queer people have fantasies, too, and the GLAAD report highlights how forgotten these stories have been in games. It’s not a matter of LGBTQ people asking for all games to be gay — we just want proportional access to fantasy and escape. Personally, I’d love to see more LGBTQ people in positions of authority in video games, a recommendation that GLAAD makes in its report as well.

And really quickly because I can already hear the keyboards melting: Woke ideas will not destroy the gaming industry, but stagnation will, and as the GLAAD report points out, we’re much closer to that reality than anything else.

Bonus content

• FromSoftware's parent company has acquired Acquire, the team behind Octopath Traveller.

• The FTC accused Microsoft of lying about its intentions with Activision Blizzard after enacting a huge round of layoffs at the end of January, and the FTC is continuing to investigate potential antitrust issues around the acquisition. Microsoft responded by saying its plans changed, so there.

• Microsoft’s gaming layoffs included 86 jobs at Skylanders developer Toys for Bob, effectively shutting down the studio.

Now playing

Children of the Sun is a dark and trippy puzzle game that makes shooting a mechanic of elegance. Players find an angle, set up the shot and then control the path of a single bullet as it takes out every enemy on-screen. This is my kind of shooter. Children of the Sun is available on Steam as a demo only for now, and it comes from solo developer René Rother, published by Devolver Digital.

“The game industry is out of step with contemporary media in terms of LGBTQ representation, and it is failing its LGBTQ customers.”

This sentiment has felt true for years, and now the statistics in GLAAD’s first annual gaming report prove it. The media watchdog and LGBTQ advocacy group today published GLAAD Gaming: The State of LGBTQ Inclusion in Video Games, offering a comprehensive breakdown of the industry from the perspective of queer players and developers.

According to GLAAD, 17 percent of the total gaming audience identifies as LGBTQ, or about one in every five players. This figure falls in line with statistics for Generation Z. Still, just 2 percent of all games on the market contain LGBTQ content, a saturation level that falls miserably short of those in film, TV and other forms of entertainment media. GLAAD found that 28.5 percent of films from the top 10 distributors in 2022 contained an LGBTQ character, and LGBTQ characters appeared as series regulars at a rate of 10.6 percent on primetime scripted broadcast shows in 2022 and 2023.

For the gaming stats, GLAAD ran the numbers: In November 2023, the Xbox store had 146 games with LGBTQ content, while PlayStation offered a list of 90 titles with LGBTQ themes, and Nintendo’s Switch eShop had 50 games tagged LGBT. Steam had 2,302 English-language games under its LGBTQ+ tag, but that figure dropped to 1,506 when filtering out “adult only sexual content” titles. Together, these games composed less than 2 percent of the Xbox, Playstation and Switch digital libraries, and they made up just 1.7 percent of Steam’s offerings (without the adult-only content). For context, it’s estimated that about 1 percent of all games released in the 2010s included LGBTQ themes.

“Despite the significant progress we’ve seen, gaming remains woefully behind other forms of entertainment media when it comes to representation,” GLAAD Associate Director of Gaming Blair Durkee said.

GLAAD’s report identified the following reasons behind the lack of LGBTQ representation in video games:

“Some reasons for exclusion are passive. Often, game companies have not considered that they should represent LGBTQ people, nor do they see us as a major part of the core gaming audience. Some reasons for exclusion are active. Companies worry about pushing away a core audience that they assume are resistant or hostile to LGBTQ content. This imagined core audience, however, is a myth, and it is one of the reasons it was paramount for GLAAD to create this gaming report. LGBTQ gamers are a significant part of the existing active gamer market and, by and large, non-LGBTQ gamers are not nearly as resistant to this content as many assume.”

More than 60 percent of non-LGBTQ respondents said they weren’t bothered by LGBTQ protagonists and NPCs in their games, and 70 percent said they were fine with titles that presented the option to customize a bisexual, gay or lesbian character. Resistance toward these themes is waning with each new generation of players, GLAAD found.

One of the report’s key takeaways is the idea that developers seem to be building games for an outdated stereotype, rather than the reality of the market. Straight, white, cisgender men definitely play video games, but the actual gaming audience is much more diverse and it’s only become more variable.

“The lack of LGBTQ representation in video games is often explained by the assumption that the stereotypical core video game consumer is a white, heterosexual, cisgender man between the ages 18 and 34,” GLAAD said. “However, our data shows that 17 percent of active gamers are LGBTQ, a 70 percent increase from the 10 percent counted in Neilsen’s 2020 report.”

This figure is even higher for younger players, the next generation of gamers. Roughly 25 percent of players under the age of 35 identify as LGBTQ, a higher concentration than reported in the human population as a whole. This trend drives home another conclusion of GLAAD’s gaming report — the idea that LGBTQ players are drawn to games in particular because they offer an immersive outlet for expression, experimentation and escape.

“The interactive nature of games, the opportunity to build community in gaming, and the long history of LGBTQ game industry professionals makes this medium a uniquely powerful tool for LGBTQ people to safely discover, connect, and express themselves,” GLAAD president and CEO Sarah Kate Ellis said. “Particularly for LGBTQ gamers, gaming can not only be an escape and source of entertainment, but also an important outlet of self-expression.”

In the GLAAD survey, 72 percent of LGBTQ players said that seeing characters of their gender identity or sexual orientation portrayed well made them feel better about themselves, and this number was even higher among younger players. Overall, 36 percent of LGBTQ players reported that video games helped them discover their sexual orientation or gender identity, and this percentage rose to 41 percent among LGBTQ players of color. Notably, GLAAD found that gamers of color are less resistant to titles with queer content than white players.

More than 40 percent of LGBTQ players said video games helped them cope with a lack of acceptance in the real world. At the same time, 51 percent of LGBTQ players said they wanted video games to do more in terms of inclusion, and 74 percent wished for more opportunities to explore and express their true selves in games.

“Games are a medium in which players can be anything, but the game industry has continued to rely on very narrow representational options,” GLAAD said.

Transgender content faced the most resistance among all respondents. Concerning LGBTQ players, 63 percent said they were more likely to buy a game that supports a bisexual, gay or lesbian protagonist, while 46 percent said the same about a transgender main character. However, 94 percent of LGBTQ respondents said they were just as likely or more likely to purchase a game that includes the option to embody a transgender protagonist. Among non-LGBTQ gamers, 80 percent responded the same way.

The importance of representation in video games has only grown amid an avalanche of anti-LGBTQ violence and legislation in the United States. In the first weeks of 2024, more than 500 anti-LGBTQ bills have been proposed or passed in the US, a majority of which target transgender youths. This is already a dramatic spike from 2022 and 2021, both record-setting years in terms of anti-LGBTQ legislation.

Queer players are more likely than their counterparts to use gaming as an escape, according to GLAAD, and this is even more true for people living in states that have proposed or passed anti-LGBTQ legislation. While 66 percent of all LGBTQ gamers said they use gaming to express themselves in ways they don’t feel comfortable doing in the real world, this statistic rose to 75 percent for players living in states with proposed or active anti-LGBTQ bills.

“For these LGBTQ gamers, gaming is necessary to cope with real-world discrimination and targeting,” GLAAD said in its report. “Game developers need to understand the role gaming plays for LGBTQ gamers in the United States and especially LGBTQ gamers in states where they are disproportionately targeted and attacked.”

Researchers offered the following recommendations for increasing LGBTQ representation in games:

• The percentage of games with LGBTQ representation should be proportional to the share of gamers who are LGBTQ.

• Game developers should strive for representation that promotes inclusivity and acceptance.

• The game industry should take responsibility for making their communities more inclusive.

• The game industry should consult LGBTQ media content experts.

• LGBTQ game industry workers should be hired in positions of authority.

Amid all of the percentages, GLAAD identified a clear pattern in its first gaming report: Representation matters a lot to most LGBTQ players, and the majority of the remaining audience isn't too bothered by queer content. Sometimes, it's even preferred.

“We are nearly invisible in game representations, despite being a significant percentage of gamers,” Ellis, GLAAD’s president, said.

The report’s survey data was collected in collaboration with Nielsen Games and includes responses from 1,452 active PC and console players in the US, with a boost sample of LGBTQ gamers to ensure accuracy for the community-specific questions. The survey was distributed between June and August 2023.

One week after Microsoft laid off nearly 2,000 employees in its gaming division, the Federal Trade Commission is accusing Microsoft of contradicting its pledge to allow Activision Blizzard to operate independently post-acquisition. The FTC filed a complaint in a federal appeals court on Wednesday, arguing that last week's downsizing, which affected employees of Activision Blizzard, "contradicts Microsoft’s representations in this proceeding." The FTC is asking for a temporary pause of Microsoft's acquisition of Activision Blizzard as it further investigates potential antitrust issues.

In its arguments to the FTC, Microsoft said it would treat Activision Blizzard as a vertical acquisition and suggested that it wouldn't need to institute layoffs, since there would be no redundancies. On January 30, Microsoft announced it was cutting 1,900 jobs across Activision Blizzard, ZeniMax and Xbox after identifying "areas of overlap" specifically between Microsoft and Activision Blizzard. This is the core of the FTC's complaint.

"Microsoft’s recently-reported plan to eliminate 1,900 jobs in its video game division, including in its newly-acquired Activision unit, contradicts the foregoing representations it made to this Court," the FTC's complaint said. "Specifically, Microsoft reportedly has stated that the layoffs were part of an 'execution plan' that would reduce 'areas of overlap' between Microsoft and Activision, which is inconsistent with Microsoft’s suggestion to this Court that the two companies will operate independently post-merger."

Though the UK's Competition and Markets Authority approved Microsoft's $69 billion acquisition of Activision Blizzard in October, the FTC hasn't seen satisfaction regarding its own antitrust concerns. The FTC is still challenging the acquisition, which means there's a possibility that Microsoft will be forced to divest all or part of Activision Blizzard.

In Wednesday's complaint, the FTC argued that the recent layoffs also undermine its own ability to order relief for employees who were negatively affected in the acquisition.

Microsoft's layoffs join an avalanche of mass firings in the video game industry, specifically in the past few months. An estimated 10,500 people in video games lost their jobs in 2023 — and already in 2024, 6,000 workers have been laid off.

The production pipeline for mainstream video games has always been hectic. The AAA factory is powered by rigid marketing plans and periods of soul-sucking crunch, and while this process has resulted in incredible games over the years, it's also been detrimental to developers' mental health and long-term job stability. Layoffs have long been baked into the video game industry, but in recent months, this trend has been running in overdrive, and it's happening at studios of all sizes.

This week's stories

Kojima Films

Hideo Kojima is partnering with Sony to build a new game that’s actually more like a movie. Of course, you could say this about any of Kojima’s games since Snatcher, but this time around, he’s doing the Hollywood thing on purpose. The new project is codenamed PHYSINT., and it’s a return to Kojima’s action-espionage roots, but it’s definitely not Metal Gear. Apparently it’s going to blur the boundaries between film and games, and it’ll take advantage of Sony’s connections in movies and music. Kojima Productions will start working on the new IP after finishing Death Stranding 2, which is set to come out in 2025. Kojima is also building OD, an Xbox movie — sorry, game — made in collaboration with horror director Jordan Peele.

Xbox on other platforms

It looks like Xbox is preparing to release some of its exclusive titles on PlayStation and Nintendo platforms. A handful of reports rolled out this week suggesting Starfield, Indiana Jones and the Great Circle, Sea of Thieves and Gears of War are all slated to hit PS5 or Switch in the near future. Xbox head Phil Spencer neither confirmed nor denied the reports, and instead teased an event next week that should clarify the studio’s multiplatform plans.

Layoffs in 2024

Both Sony and Microsoft have delivered their first showcases of 2024, highlighting all of the big, shiny games coming out soon, like Hellblade 2, Avowed, the Silent Hill 2 remake and Stellar Blade. The trailers for these titles are as vibrant as ever and the marketing beats are just as breathless — but, man, it’s really hard to get excited about video games right now. Rampant layoffs have cast a shadow over the industry, and even if 2024 turns out to be a banner year for video game debuts, it still feels shitty.

In the first month of 2024, an estimated 6,000 people in the video game industry lost their jobs. This figure is steadily climbing and it’s building on a rash of layoffs in 2023, when an estimated 10,500 video game jobs were cut. I don’t want to just drop these numbers without context — 2022 saw about 8,500 layoffs and this was considered terrible. 2023 eclipsed this total and, just six weeks in, 2024 is on track to do the same.

Here are some stats from January alone: Riot Games laid off 530 people, or about 11 percent of its workforce, and closed down its experimental publishing label. Devolver Digital laid off 28 people at Artificer, a team it purchased in 2021. Dead by Daylight studio Behaviour Interactive lost 45 people. Sega of America fired 61 workers. Microsoft laid off nearly 2,000 employees across Activision Blizzard, ZeniMax, and Xbox the same week that it became a $3 trillion company. Unity plans to drop 1,800 employees by March, and this is on top of the 1,000 jobs that the studio eliminated in 2023. Embracer Group gutted the team behind Tiny Tina’s Wonderlands and laid off 97 people at Eidos Montreal, canceling a new Deus Ex game in the process. The holding company already terminated about 1,000 jobs in 2023 and its restructuring efforts are expected to last until March.

Recent layoffs have affected studios of all sizes, and they’re happening even as the industry’s leading companies grow financially. If it sounds like I’m repeating myself, that’s because I am — I reported on the layoffs crisis at the end of last year, and things have only become more concerning in the first weeks of 2024. The video game industry received an influx of attention and cash during the pandemic in 2020 and 2021, and today’s layoffs are a response to a period of unchecked growth and corporate consolidation.

All of this instability provides an unsettling backdrop for the hype coming out of the video game industry this year. It’s tough to get excited about Xbox’s Avowed when we know people lost their jobs during production, and it’s hard to enjoy Devolver’s next edgy showcase when it just downsized a studio it didn’t need to buy in the first place. 

At the same time, we’re seeing how unionization can help protect the people who make video games. Though dozens of people lost their jobs at Sega of America this year, the studio’s AEGIS-CWA union negotiated to save some roles and offer severance to temp workers. Unionization efforts have been on the rise since 2021, and the appeal of collective bargaining is only clarifying as the firing squads take aim.

Bonus Content

• The futuristic action-RPG Stellar Blade is coming out on April 26, exclusive to PS5.

• Dave the Diver, the pixelated non-indie game that somehow got nominated for Indie Game of the Year, is coming to PS4 and PS5 in April, and it’ll get Godzilla DLC in May.

• Johanna Faries has replaced Mike Ybarra as the president of Blizzard. Ybarra quit during Microsoft’s downsizing in January, and Faries was previously the head of Call of Duty under Activision.

Now Playing

Now that I can actually talk about it, I want to say that Persona 3 Reload is absolutely delicious. The Morning After host Mat Smith wrote our review, go give it a read if you’re a freak like us.

It's an awkward time to be a PC player. The platform has more games covering more genres than ever, and even standard PC hardware can deliver pristine, photorealistic graphics. At the same time, some of the biggest titles in recent memory have been absolute messes on PC at launch, like Cyberpunk 2077, Star Wars Jedi: Survivor, Redfall, the Dead Space and Resident Evil 4 remakes, and The Last of Us Part I. Unfortunately, it looks like we can add Cities: Skylines II to this list — which means I'm eagerly looking forward to the day when we can look back and say, "Man, remember when this game was broken? I'm glad Colossal Order fixed everything and appropriately apologized to its community." At least, I hope that's what we'll say.

This week's stories

Microsoft, macro layoffs 

Three months after closing its purchase of Activision Blizzard, Microsoft fired 1,900 people in its Xbox, ZeniMax and Activision Blizzard divisions. This follows a rash of layoffs in video games in recent months — last year, around 9,000 people in the industry were fired, and already in January nearly 6,000 jobs have been lost. It’s a legitimate crisis. Alongside the layoffs, Microsoft officially canceled Odyssey, the survival game that Blizzard had been working on for six years.

Palworld is the zeitgeist

So far, 2024 is the year of Palworld. The game comes from a small, rookie team and it’s been billed as “Pokémon with guns,” though it’s really more like Ark in terms of gameplay. Whatever reference you pick, Palworld is so popular that it’s No. 2 on the Steam charts for all-time concurrent players, right behind PUBG. With all of this attention, it was only a matter of time before Nintendo stepped in — the Pokemon publisher is investigating Palworld for potential copyright infringement, and we’ll see how that plays out in the coming weeks.

Cities: Skylines II and toxicity

The original Cities: Skylines came out in 2015 and ate up the audience that was left behind by EA’s SimCity, which landed in 2013 and was a busted mess. Cities: Skylines scratched that urban-planning itch, and over the years, developers at Colossal Order worked closely with players to foster a thriving mod community on Steam Workshop. Mods, custom assets and let’s play videos have been a critical aspect of Cities: Skylines’ long-term success.

Last October, after months of marketing collaborations with content creators like Biffa and City Planner Plays, Cities: Skylines II came out — and it was a disappointment to many players. The game was originally pitched as a simultaneous PC and console release, but it’s only available on PC and there’s no concrete timeline for when the other versions will come out. There’s been no word on a Mac or Linux launch. There’s also no official mod support for Cities: Skylines II, and when this feature does land, it will be through the game’s publisher, Paradox, rather than Steam Workshop. On top of all this, Colossal Order raised the game’s minimum and recommended PC specs just a month before release, and the new requirements made it unplayable for a large chunk of players. Even with a capable rig, Cities: Skylines II is riddled with visual and mechanical bugs. Simply put, it feels like Colossal Order pulled a SimCity.

The studio has been steadily rolling out updates, and CEO Mariina Hallikainen acknowledged that the game is missing some promised and highly publicized features, like mod support. But in a recent note to the community, she said the conversation with players was becoming toxic and she called for civility. Hallikainen told Engadget she'd witnessed a surge in personal attacks on developers and other players in forums and on social media.

Community members like Philip, the man behind the YouTube channel City Planner Plays, were surprised to hear the word “toxicity.” He told Engadget he's witnessed an increase in negativity and frustration from players, but not toxicity. For Philip and many other dedicated Cities: Skylines players, the feedback has been justified. They want Colossal Order to take accountability for the state of the release, say they’re sorry, and provide a plan to fix things going forward. Maybe throw in some free in-game perks, too.

Collaboration with the community is what made the original game so successful, and the sequel could certainly benefit from crowdsourced improvements. Hallikainen told Engadget that working with content creators and modders has helped direct the updates to Cities: Skylines II post-launch, and the studio still loves working with these players.

This is only the beginning for Cities: Skylines II. Colossal Order intends to support and expand the game over the next 10 years. The original Cities: Skylines didn’t have all of the bells, whistles and mods when it first came out in 2015, and the sequel is starting in a similar position. Colossal Order sees Cities: Skylines II as a fresh foundation, but its core community expected a more complete experience from the jump — especially people who paid $90 for the Ultimate Edition.

We’ve seen titles like No Man’s Sky and Cyberpunk 2077 overcome rough launches to become beloved games down the line, and Colossal Order has a solid track record when it comes to long-term support. However, options like early access and paid betas exist for a reason. At the very least, players should know whether they’re spending money to play a new game, or to help finish it.

Now playing

I’ve been playing Persona 3 Reload, and now that embargo has lifted, I can say it's great. Otherwise, my quest to hit Grandmaster in Overwatch 2 continues unabated.

Cities: Skylines II developer Colossal Order has a uniquely close relationship with its community. The original Cities: Skylines came out in 2015 and gobbled up the audience that was left behind by EA’s SimCity, which came out in 2013 and was a busted mess. Cities: Skylines scratched that urban-planning itch, plus it cost just $30. The game came first to PC, Mac and Linux with modest hardware requirements, and it hit consoles within two years. Critically, Cities: Skylines also supported mods through the Steam Workshop, allowing players to add their own tools to the game and share those features with others.

“With Cities: Skylines, the audience grew in size and the modding took even a bigger role, allowing for a huge amount of creativity and inspiration for us devs,” Colossal Order CEO Mariina Hallikainen told Engadget. “Anything from quality-of-life improvements to ideas for DLC content, we have gathered a huge amount of information to help us create the game that Cities: Skylines is today.”

Colossal Order and its publisher, Paradox Interactive, continued to support Cities: Skylines with consistent game updates and DLC drops, and its mod community continued to grow. The game picked up a ton of new players during the pandemic in 2020, and around that time, a number of now-prominent content creators leaned into Cities: Skylines for streams and videos.

In the months before the launch of Cities: Skylines II in October 2023, Colossal Order partnered with a handful of content creators and gave them access to bits of the game early, so they could create YouTube videos showing off specific features each week. These partners included Biffa, two dollars twenty, YUMBL, Infrastructurist and City Planner Plays. City Planner Plays has a clever edge in this space — Philip, the man behind the builds, worked as an urban planner for more than a decade, and his videos often include insights about how real-life cities are designed. He started his channel in mid-2020, and today he’s a dedicated Cities: Skylines streamer and video editor with nearly 650,000 subscribers on YouTube. Like many other community members, he has a history with Colossal Order that spans years.

“Prior to the Cities: Skylines II release, I think that most everyone in the community viewed them incredibly positively, looking at them as ‘one of us’ and the type of developer that you want making a game that you love,” Philip said. “They were viewed as responsive and generous. …I can’t recall a bad thing being said about them.”

That’s exactly what made Hallikainen’s blog post on January 15th so surprising.

“We have seen a growing tendency of toxicity in our community, something we have not experienced to this extent before,” Hallikainen wrote, clarifying that the negativity was being directed at developers and players alike. She continued, “We have always treasured having the devs present on the different social platforms and having direct communication with the community, but our biggest responsibility will always be protecting the team.”

Tensions have been high in the Cities: Skylines community since the launch of the sequel in October. Though the game was originally pitched as a simultaneous PC and console release, it’s only available on PC and there’s no concrete timeline for when the other versions will come out. On top of that, Colossal Order raised the game’s minimum and recommended specs just a month before release, and the new requirements placed it out of reach for a large chunk of players.

Colossal Order

Even with a capable rig, the game is riddled with visual and mechanical bugs. Philip said Cities: Skylines II strained his RTX 4090 graphics card, making it run at 100 percent on the main menu, and he couldn’t play in 4K at launch because the game was so GPU-bound.

Simply put, it feels like the game needed more time in development.

“Since the launch of Cities: Skylines II, things have without a doubt gotten more prickly,” Philip said. “While many people have been appreciative of Colossal Order’s transparency with the weekly updates as well as the frequent bug fixes, many appear to view Colossal Order as being all-too-willing to release a game that wasn’t ready to be released.”

Hallikainen acknowledged that the game is missing some promised and highly publicized features, like mod support.

“Naturally we’re disappointed we weren’t able to achieve everything we aimed for, but it’s fantastic to have the game finally out and continue working on it with more openness,” she said.

The issue, as far as Colossal Order sees it, lies in the community’s response to Cities: Skylines II. Players have been venting on social media and in the Steam and Paradox forums, and the feedback has risen to toxic levels, according to Hallikainen. She cites a surge in personal attacks on developers and other players.

Colossal Order

“Cities: Skylines II attracted a lot of attention and very high expectations were set,” she said. “When the game did not fulfill all the promises, it was natural to cause frustration in the audience. However, the shortcomings should spark a conversation on ideas for improvement, constructive feedback and respectful discussions in the community.”

For City Planner Plays and other community members, the issue is the game itself. Where Colossal Order sees toxicity, Philip sees justified frustration.

“I will admit that I was taken aback by this description of what’s happening in the Cities: Skylines community regarding Cities: Skylines II,” he said. “I have noticed increased negativity. However, I wouldn’t say that I have noticed increased toxicity. And bluntly, I think the negativity is completely understandable and predictable.”

Philip identified four factors driving the negative sentiment: The game is only on PC, it’s buggy and unplayable on many common hardware configurations, there’s no official support for mods, and Colossal Order hasn’t held itself accountable for the game’s blunders.

“Colossal Order has been transparent, talking with the community, but has not taken accountability for the release of the game,” Philip said. “I hear this over and over again. Many players appear to want them to admit that the release state of the game was poor, say that they are sorry, and make some gesture to make amends. To date, they have delayed the DLC release — which actually was a huge negative for people that purchased the Ultimate Edition of the game — but not made amends. [They haven’t] provided the information that people are looking for.”

Colossal Order

The biggest misstep on Philip's list is the lack of mods. Colossal Order is planning to add an official pipeline for mods directly through Paradox, rather than Steam Workshop, which was the home for mods in Cities: Skylines. Shifting to an in-house modding platform will ensure parity across all platforms, bringing mods to consoles and players outside of Steam. However, the Cities: Skylines mod community was built on Steam Workshop, a popular and easy-to-use platform, and with the delay of the console release, the current player base is simply being inconvenienced.

“The maps that come with the game aren’t great — incredibly high difficulty level, unforgiving weather — and many basic features need refinement,” Philip said. “Mods offered that opportunity and they aren’t available just yet. Worst of all, early messaging made it seem like modding was around the corner, weeks after launch, [but it’s been delayed] to some undetermined time in Q2 of 2024.”

Collaboration with the community is what made the original game so successful, and the sequel could certainly benefit from crowdsourced improvements. For now, some players are using a third-party tool to make mods work in Cities: Skylines II.

“The tech is new, the simulation has been entirely rewritten and the game has all the potential to become the city-builder of this decade,” Hallikainen said. “What we failed in was to get the modding support available for the release, and we’re doing our best to catch up. We have been delighted to see the modding community has not waited for us, but are already creating amazing mods for the game.”

Paradox Interactive

This is only the beginning for Cities: Skylines II. Colossal Order has plans to support and expand the game over the next 10 years. The original Cities: Skylines didn’t have all of the bells, whistles and mods when it first came out in 2015, and the sequel is starting in a similar position. Colossal Order sees Cities: Skylines II as a fresh foundation, but its core community expected a more complete experience.

“The feedback we’ve gotten from the content creators and modders has immensely helped us in heading in the right direction, and we love working in cooperation with different parties,” Hallikainen said. “There’s a lot of work to be done and we plan to keep going for the next decade.”

Cities: Skylines II has improved significantly in the months since launch, thanks to a slew of updates from Colossal Order. It’s on the right track. Colossal Order continues to publish updates on the game’s progress each week, but it’ll take time — and maybe an apology, a plan and free in-game perks — to rewrite the narrative around Cities: Skylines II.

“I think the most ‘toxic’ people right now are the game’s biggest fans,” Philip said. “And bluntly, they are just disappointed that the game doesn’t run well for them or that they can’t play it at all. They’re disappointed and lashing out, which isn’t right. But to me, that means that there is a path to repair the issues if the game is fully fixed and accountability is taken.”

With the news that Blizzard and ESL FACEIT are preparing to launch a new esports circuit for Overwatch 2, mere months after the death of the Overwatch League, it's a good time to take stock of the entire esports scene. Things are looking slightly frantic, at least in North America. League of Legends and Rocket League are particularly messy, entering their 2024 seasons with lean budgets and major shakeups. Meanwhile, an expansion of the open-qualifiers model should provide more opportunities for everyday players to compete in Valorant, Overwatch 2, Rocket League and all manner of fighting games. Get those fingers ready, folks.

This week's stories

Xbox lineup in 2024

Xbox held its first showcase of 2024 last week, highlighting a handful of games that have been in development for years. Indiana Jones and The Great Circle is due out later in 2024, and it comes from Wolfenstein II: The New Colossus studio MachineGames. The new footage showcased lots of whipping, quipping and Nazi punching, just like Indy would want. 

Next, Obsidian’s big fantasy RPG, Avowed, will hit PC and Xbox in the fall. Obsidian is the studio that made Fallout: New Vegas and The Outer Worlds, and Avowed looks like its spin on an Elder Scrolls game. 

Finally, Senua’s Saga: Hellblade II will come out on May 21, nearly five years after it was announced alongside the reveal of the Xbox Series X.

Esports are back and smaller than ever

2024 is a moment of reckoning for esports, especially in North America. Blizzard killed the Overwatch League last year and it’s trying to start a new series with the ESL, viewership of North American League of Legends is on the decline, and Rocket League’s RLCS tournament is in a state of upheaval.

League of Legends is the king of esports, and in 2023, its World Championship tournament broke viewership records, driven by legendary performances from Korean and Chinese teams — OK, mostly Faker. But no matter how hard I cheer for them, North American League of Legends teams are still kind of a joke on the world stage. Last year, the Korean summer split attracted 1.5 million concurrent viewers, while the LCS summer tournament peaked at 223,000 viewers, and that was down from 370,000 in 2022. The 2024 season kicked off this month with regional tournaments, and the North American LCS looks like a brand new beast. The number of teams competing in the LCS has been cut from 10 to 8, meaning Evil Geniuses and Golden Guardians are gone, and the league is using a faster-paced best-of-one format in the regular season. We’ll see how this all pays off at MSI in May.

In the Rocket League Championship Series, budgets are tight and teams are scattered. There will be two major tournaments this year instead of three, plus the World Championship, and there are fewer spots reserved for both North America and Europe. Six established casters were dropped from this year’s events and it looks like only North America and Europe will have hosted tournaments, in English only. The RLCS prize pool is also smaller this year, down from $6 million to $4.3 million. A handful of teams lost sponsorships heading into 2024 and there was a ton of player shakeup among existing orgs. To top it all off, the game’s most famous player, Squishy, announced plans to retire from pro play to focus on streaming. It’s just a confusing time in Rocket League esports.

One side effect of esports shrinkage is a shift to open qualifiers. Rocket League swapped to open qualifiers this year, meaning basically anyone could compete for a spot in the RLCS, rather than teams buying in for the season. The RLCS prize pool is deeper, even though it’s also smaller, and the top 128 teams in North America will receive small payouts.

The Valorant esports scene has been steadily solidifying since the game’s launch in 2020, with a peak of 1.4 million viewers for the 2023 Valorant Champions Tour. The VCT has always featured open qualifiers, and this year that system is expanding with Premier, an in-game competitive track that acts as another funnel for everyday players to compete on the main stage. (As a side note, the VCT Game Changers series highlights players of marginalized genders and it’s really awesome, check it out sometime.)

Just this week, Blizzard announced the Overwatch Champions Series, a multi-region esports tournament for Overwatch 2. Unlike the deceased Overwatch League, the Champions Series will have open qualifiers. The new series is produced by ESL FACEIT, which is owned by Saudi Arabia’s Public Investment Fund, which makes me sad.

Meanwhile, the fighting game community has been all over open registration for a while. EVO is the biggest fighting game tournament of the year, and in 2023 it hosted more than 9,000 players competing across eight titles. As a one-on-one genre, fighting games often find themselves on the frontlines of experimentation in esports, and EVO is always a good time.

I think open registration is a cool move for esports in general — it allows more people from diverse backgrounds to participate and provides a sustainable entry point for young pros. This is how talent pipelines are built.

Now Playing

After taking a few months off to play other games, I’m back on Cult of the Lamb. The free Sins of the Flesh update landed last week, and it’s big and sexy, adding layers of debauchery and plenty of new content to the game. As Engadget weekend editor Cheyenne MacDonald said in her review, “We’re having a great time sinning, my followers and I.”

Avowed, the fantasy roleplaying game from Outer Worlds studio Obsidian Entertainment, is due to hit Xbox and PC in the fall. This is a slight update from the game's original release window, which was just "2024." Specifically, Avowed will hit Xbox Series X/S, PC via Xbox and Steam, and it'll be available through Game Pass on day one.

Avowed is an expansive first-person RPG with old-school fantasy vibes. Players will set off on a journey across the Living Lands, on a mission for the kingdom of Aedyr. A plague is spreading across the island of the Living Lands and players have been sent to investigate what's going on — along the way, they'll discover how they're personally tied to the region and its mysteries.

The game supports multiple play styles, allowing players to approach combat and conversations in their own ways. The world is filled with magic, monsters, firearms, swords and shields, and companions will join the party along the way. If you liked Skyrim, you'll probably like Avowed.

Obsidian is known for creating Fallout: New Vegas, South Park: The Stick of Truth, Pentiment, Outer Worlds, and other mainstream games. Microsoft purchased the studio in 2018.