Xbox games may not get physical releases after Microsoft’s latest reported layoffs

Christopher Baggett
Xbox fans selling Xbox

Reports indicate that Microsoft has let go of the team responsible for bringing physical media to retail, signaling Microsoft’s pivot to an all-digital future.

The gaming community was rocked by the announcement of mass layoffs at Microsoft, with some 1,900 employees reportedly being let go.

While many of the finer details have yet to be revealed, it is known that several Blizzard executives have left the company and games like the survival title Odyssey have been canceled.

It’s now starting to look like the layoffs may have far-reaching implications for the future of Xbox, too, as reporters indicate a major Microsoft team is no longer with the company.

Microsoft reportedly lays off team that developed Xbox retail products

The revelation comes in the form of a tweet from Jez Corden, managing editor of Windows Central.

According to Corden, Microsoft closed the team responsible for the development of physical media – specifically bringing those products to retail.

“If you’ve seen the digital-only Xbox console leaks…well, you can get an idea of where Microsoft is going here,” Corden says.

The news is in line with late 2023 leaks that indicated an Xbox Series X|S refresh was coming. Both updated consoles are expected to be digital-only, though this has yet to be confirmed by Microsoft.

Microsoft has toyed with the idea of pivoting to all-digital for some time now. Though several Xbox 360 models were targeted toward users who preferred Xbox Live games over disc releases, its first earnest attempt was 2019’s Xbox One S All-Digital edition.

The One S All-Digital was the same basic shell as the Xbox One S, but missing the optical drive. It laid the groundwork for Microsoft’s two-prong next-gen strategy, consisting of the Xbox Series X and its budget-friendly, lower-powered little brother, the Xbox Series S.

This also follows a trend of retailers removing physical media from their stores. Best Buy announced in 2023 that it would begin removing physical media such as DVDs from stores, while Walmart has reportedly begun the process of removing physical copies of Xbox games from stores.

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