Thomas Mahler, co-founder and CEO of Moon Studios, has shared his thoughts on Microsoft’s recent Xbox layoffs, arguing that the gaming division needs a significant strategic reset centered on creative talent rather than established intellectual property.
In a lengthy social media post, Mahler described the situation as “heartbreaking” for those affected while suggesting that the cuts may be part of a broader transformation within both Xbox and the wider games industry.
“It’s heartbreaking to see what’s happening at Xbox right now,” Mahler wrote. “A lot of great people are being affected, and I don’t want to minimize that. But if we’re being honest, this has felt like a long time coming and I’m not sure this is the end of it.”
Reflecting on Moon Studios’ partnership with Microsoft during the development of Ori and the Blind Forest and Ori and the Will of the Wisps, Mahler claimed that Xbox’s primary focus remained on its largest franchises.
“Even when we were making Ori with Xbox, it was clear that the main focus was still Halo, Gears, and Forza,” he said, adding that he had hoped Microsoft would view Ori as a potential mascot franchise capable of reaching younger audiences and families.
Mahler revealed that he had repeatedly advocated for greater emphasis on family-friendly experiences, writing, “I emailed Phil plenty of times making my argument that Xbox should have their eyes on delivering magical experiences for kids and families as well, like Disney and Nintendo always have.”
According to Mahler, Microsoft’s greatest challenge is not a lack of intellectual property but a failure to consistently identify and support the right creative talent. He argued that successful games are driven by developers rather than brand recognition alone.
“The problem is and has always been that great games are not made by IP. They’re made by people,” Mahler said. “People who have passion and love for this medium, that understand what gamers truly want.”
He also suggested that if he were leading Xbox, he would reduce the organization’s size and refocus its priorities around game development. “If I were in charge of Xbox right now, I’d also radically slim down, refocus and try to bring back the passion for gaming that clearly existed in the Xbox halls during the 360 era.”
Mahler compared Xbox’s current position to Apple’s turnaround under Steve Jobs in the late 1990s, arguing that Microsoft possesses a valuable collection of franchises but must empower the right creators to maximize their potential.
“They need to find the Miyamotos, Tezukas, Sakurais, etc. within their own ecosystem – the people who actually speak the same language gamers do – and then support them, protect them, and trust them,” he wrote.
Concluding his remarks, Mahler argued that Xbox’s path forward is straightforward: “Ship better games than your competition. That’s it.”
Mahler’s comments come amid ongoing reports of layoffs, restructuring, and uncertainty across Microsoft’s gaming division, with several Xbox-owned studios reportedly facing an unclear future as the company reevaluates its long-term strategy.
