Amazon Cuts AAA Game Development Amid Massive Layoffs, Moves Focus to Online and Party Games

Amazon Game Studios is making big changes as part of the company’s latest round of layoffs. The total number of people affected in the gaming division has not been revealed, but the cuts are described as “significant.”

Across Amazon, 14,000 employees are being let go, marking one of the largest layoffs in the company’s history, according to Bloomberg.

The reductions will mostly hit Amazon’s offices in Irvine and San Diego. The company will scale back work on major projects, particularly its massive multiplayer online games like New World. Other titles, including the upcoming Tomb Raider, are expected to continue development, but with smaller teams.

Steve Boom, Amazon’s vice president of Audio, Twitch, and Games, sent a memo to staff explaining the decision.

“While we’re proud of our successes in first-party AAA game development and publishing, we have made the difficult decision to halt a significant amount of our first-party AAA game development work – specifically around MMOs – within Amazon Game Studios, including making significant role reductions in our studios in Irvine and San Diego, as well as our central publishing team,” he wrote.

Boom emphasized that the move is part of a larger shift in strategy for the gaming division. “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 said.

“Last week’s launch of the all-new Luna is a great example, as it leans into both streaming entertainment and delivering value for Prime members…it’s still Day 1.”

Amazon is still developing some games. The Montreal studio recently completed a closed alpha for March of Giants. Studio 5 released Courtroom Chaos: Starring Snoop Dogg on the Luna platform and is focusing on casual and AI-driven games. The company is also partnering with Crystal Dynamics on the new Tomb Raider game and with Maverick Games on an open-world driving title.

Layoffs have been common across the video game industry in recent years. Companies such as EA, Xbox, People Can Fly, and Bend Studio have all reduced staff recently. Boom acknowledged the difficulty of the cuts in his memo:

“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. We don’t make these decisions lightly, and yet they are necessary for us to continue to drive our business forward.”

These changes show that Amazon is refocusing its gaming strategy. The company seems to be shifting away from high-budget AAA games, particularly MMOs, and moving toward online, streaming, and social gaming experiences.

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