XBOX Layoff Rumors Raise Questions About Rare’s Future

XBOX’s next major round of layoffs and studio changes could reportedly arrive this week, with new rumors suggesting that Rare may also face uncertainty.

The restructuring is expected to affect about 2.5% of Microsoft’s workforce. Previous reports suggested that XBOX could close multiple studios as part of the cuts, while Microsoft has also reportedly ended its deal with IO Interactive.

Rare was reportedly mentioned in XBOX restructuring rumor

The latest claim comes from journalist Patrick Garratt, who wrote in a newsletter that Rare may be affected by XBOX’s restructuring plans.

Garratt later repeated the claim on Bluesky, saying he had been told that Rare is “on the block.” However, the wording remains unclear. It does not confirm whether XBOX could close Rare, reduce its staff, cancel projects, or change the studio’s role inside Microsoft.

For now, Microsoft has not confirmed any closure or layoffs at Rare.

Rare has a long history in gaming

Rare has been active for more than 40 years and became one of the most recognizable studios in the industry during its partnership with Nintendo in the 1990s.

Microsoft acquired Rare on September 24, 2002. Since then, the studio has released several games under XBOX, though its post-acquisition record has been mixed.

Some Rare projects struggled to reach the same level of impact as their older Nintendo-era releases. However, the studio also delivered notable successes, including Viva Piñata and Sea of Thieves.

Sea of Thieves became Rare’s biggest modern hit and helped the studio regain visibility during the XBOX One and XBOX Series X|S era.

XBOX appears focused on profitability

The reported restructuring comes as XBOX management continues to focus on cutting costs and improving profitability.

That strategy appears to favor larger, proven franchises and more reliable business areas. It could also place smaller projects, experimental games, and lower-performing teams under more pressure.

This does not mean Rare will close. The current report remains a rumor, and Microsoft has not announced any official action involving the studio.

Rare has not been confirmed for closure or layoffs. The claim only suggests that the studio may be part of XBOX’s wider restructuring discussions.

Until Microsoft confirms the next round of cuts, Rare’s future remains uncertain.

Via Wccftech