Amid significant layoffs that began on Tuesday, ecommerce giant Amazon is undergoing substantial changes to its video games business. This strategic shift comes shortly after the launch of the company’s new game, “King of Meat,” and the unveiling of its revamped cloud-gaming platform, Luna. Amazon has also emphasized its commitment to continue internal development on big-budget AAA titles, including massively multiplayer online games (MMOs), while simultaneously pushing for more party games.
As reported by Bloomberg’s Jason Schrier and confirmed by Variety, an undisclosed number of positions have been cut within the Amazon Game Studios division. This decision is part of a broader initiative to eliminate 14,000 corporate positions at Amazon this week. Steve Boom, the head of Amazon audio, Twitch, and games, indicated that while these layoffs correlate with the overall company reductions, they also reflect a significant shift in strategy within the gaming sector.
In a memo to staff, which was obtained by Variety, Boom stated, “Over the last several months, we’ve been evaluating our go-forward plans, specifically through the lens of our mission to deliver the very best gaming experiences to customers while leaning into the things that Amazon does best.” He emphasized that this approach is essential for creating a meaningful impact on customers that aligns with Amazon's scale. The recent launch of Luna serves as a prime example, showcasing a commitment to streaming entertainment and providing value for Prime members.
Amazon Luna debuted with a diverse catalog of social party games and AAA blockbusters, and Boom noted that there is much more to come from the team. He remarked, “We’ve also taken a critical look at the evolving dynamics of the games industry and competitive landscape.” Despite the company's pride in its successes in AAA game development, Boom announced the difficult decision to halt a significant portion of first-party AAA game development, particularly concerning MMOs. This includes substantial role reductions in studios located in Irvine and San Diego, as well as within the central publishing team.
According to Boom, Amazon will continue partnering with external studios like Crystal Dynamics on an upcoming Tomb Raider title and Maverick Games on a new open-world driving game. Meanwhile, Amazon's Montreal studio is completing work on its title, “March of Giants,” and Studio 5, which developed Luna’s new game “Courtroom Chaos: Starring Snoop Dogg,” will maintain its focus on casual and AI-driven games.
Last week, Amazon Luna relaunched, expanding its offerings with premium third-party games such as “Hogwarts Legacy” and Xbox’s “Indiana Jones and the Great Circle,” alongside a new user interface and a party game collection named “GameNight.” Earlier this month, Boom clarified that the Luna overhaul does not signify a retreat from developing AAA titles but indicates a shift towards focusing on console-friendly games, well-known intellectual properties (IPs), and familiar game patterns.
In his memo, Boom elaborated, “If you were to trace the arc of what we’ve released and what we’ve now announced from our game studio, it would actually point in this direction.” He explained that while the company initially focused on MMOs, it is now broadening its scope to include more console-friendly titles, citing upcoming releases like “King of Meat,” Tomb Raider, and a driving game based on “Lord of the Rings.” He noted that MMOs primarily cater to hardcore PC gamers, whereas titles like “New World” have successfully transitioned to consoles.
In closing, Boom acknowledged the challenges of these changes, stating, “There is no getting around the fact that days like this are hard, and we will be losing team members whose work and dedication have had an incredible impact on our customers over the years.” He reassured employees that these decisions, while difficult, are necessary for the company’s future growth. Boom encouraged team members to reach out to their managers or HRBP with any specific questions regarding the changes.
