Microsoft has reportedly shut down internal departments that bring Xbox games to physical retail stores. This news follows recent leaks suggesting the development of a digital-only Xbox console, further fueling speculation about the future of physical media in the gaming giant’s strategy. This could mean a shift towards digital distribution.
This is based on an X (formally Twitter) thread from the Managing Editor of Windows Central. While closing these departments doesn’t necessarily mean Microsoft has abandoned physical retail, it certainly signals a significant change in approach. However, this could mean Microsft is considering outsourcing physical distribution or consolidating teams.
Microsoft’s restructuring extends beyond retail, with this same thread claiming layoffs within the Activision Blizzard King (ABK) games’ internal customer support team. These positions are expected to be outsourced to external companies, which would raise concerns about the potential service quality changes for ABK titles. Customer support tends to worsen that support, which may happen here.
Beyond retail and customer support, Microsoft has also reportedly reduced its community management headcount. This suggests possibly scaling back future community engagement efforts for Xbox games.
It’s true that the broader gaming industry has started to trend toward digital distribution in recent years. Streaming services, online storefronts, and download-only titles are becoming more common, potentially influencing Microsoft’s strategic decisions. However, I’d say it’s a long while until we see the complete disappearance of physical media. There are definitely passionate player communities that will continue to ask for retail copies of games.
The closure of Xbox retail departments and other reported changes undoubtedly marks a significant shift within Microsoft’s gaming division. We can’t say what the company’s long-term vision for physical media is, but closing these departments is very telling. The future looks like it will heavily rely on digital distribution and streamlined operations. It will take time to see how these changes affect players and the industry.
