July 08, 2026
Game Dev Morning Digest
Microsoft's gaming division dominates today's news with a sweeping 3,200-job 'reset' that guts id Software, shrinks Obsidian by a quarter, and severs ties with four acquired studios, while Bethesda scrambles to a franchise-first strategy in response. Against that backdrop, CCP Games open-sourced the Carbon engine behind EVE Online and Supercell launched equity-free grants for African developers, offering a rare counter-narrative of industry expansion.
Engines & Tools
EVE Online's cross-platform game engine framework is now fully open source
Game Developer- Carbon is CCP Games' cross-platform framework that has powered EVE Online's sprawling persistent sci-fi MMO universe for over two decades.
- It is now released as fully open source, giving outside developers access to engine technology proven at large-scale MMO scale.
- Marks a notable shift for CCP toward community-facing tooling after years of keeping Carbon proprietary.
Industry & News
Xbox cutting 3,200 jobs and parting ways with Double Fine, Compulsion, Ninja Theory, and Undead Labs
Game Developer- Microsoft is eliminating 3,200 roles across its gaming division as part of a division-wide 'reset.'
- Xbox is severing ties with four previously acquired studios: Double Fine, Compulsion Games, Ninja Theory, and Undead Labs.
- Leadership justified the retreat by saying 'it is neither possible nor desirable to own every great independent studio,' reversing years of acquisition-heavy strategy.
Report: Roughly half of the id Software team have been laid off
Game Developer- Roughly half of id Software's staff have reportedly been cut as part of the wider Xbox 3,200-role reset.
- id Software, the studio behind Doom and Quake, is one of Bethesda's most storied properties, making the scale of the cuts especially notable.
- The layoffs raise questions about the pace and scope of id's upcoming projects.
Report: Obsidian losing around one quarter of its staff to 'Xbox reset'
Game Developer- Obsidian, maker of Pentiment and The Outer Worlds, is reportedly losing 60-70 employees, roughly a quarter of its staff.
- The cuts are tied directly to the broader Xbox restructuring rather than studio-specific performance issues.
- Obsidian had been positioned as one of Xbox's flagship RPG studios, making the reduction a signal of tighter first-party investment ahead.
IO Interactive closing Istanbul studio after regaining control of Project Fantasy
Game Developer- IO Interactive is shuttering its Istanbul studio after regaining full control of Project Fantasy, an online RPG previously funded by Xbox.
- The studio said it must restructure to find stable footing now that Xbox funding for the in-development title has ended.
- Shows Xbox's publishing pullback rippling out to funded partner studios, not just companies it directly owns.
Bethesda pivots to "franchise-centric" planning model amid Xbox restructure
GamesIndustry.biz- Bethesda is adopting a 'franchise-centric' planning strategy to concentrate resources on long-term franchise growth.
- The shift comes directly in response to the ongoing Xbox restructuring and layoffs hitting sister studios.
- Suggests Bethesda may deprioritize new IP in favor of doubling down on established franchises like Fallout and The Elder Scrolls.
Xbox Game Pass subscriber count is less than 50% of original target
GamesIndustry.biz- Xbox Game Pass reportedly has around 30 million subscribers.
- That figure sits at less than half of Microsoft's original internal subscriber target for the service.
- The shortfall against growth goals helps contextualize the scale of the current cost-cutting and restructuring push.
Supercell starts developer grants program for African studios
Game Developer- Supercell launched an equity-free developer grants program specifically targeting studios across Africa.
- Grants range from $20,000 to $200,000 with no equity taken from recipients.
- A rare piece of expansionary, growth-oriented industry news amid a week dominated by layoffs and studio closures.
Mario Kart Tour to shut down in September 2026
GamesIndustry.biz- Nintendo will take Mario Kart Tour offline on both iOS and Android in September 2026.
- Ends the run of Nintendo's mobile racing spinoff as the company reshapes its mobile game portfolio.
- Comes alongside Nintendo's separate decision to wind down original Switch console sales to European retailers by February 2027.