Amazon Games Slashes AAA Projects Amid Layoffs, Shifts Focus to Online Strategy

Amazon Game Studios is facing major changes as part of a wave of layoffs hitting the company this week.

Bloomberg reports that while the exact number of people affected in the games division is not clear, the cuts are described as “significant.” Overall, Amazon is laying off 14,000 employees across the company.

The layoffs in the gaming division will mainly hit the Irvine and San Diego offices. The company is also scaling back work on big-budget games, especially massive multiplayer online games like New World.

Other projects, such as the upcoming Tomb Raider game, are expected to continue, but the size of the teams working on them will shrink.

Steve Boom, Amazon’s vice president of Audio, Twitch, and Games, sent an email to staff explaining the changes. “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 said the changes are part of a larger strategy shift for Amazon’s 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.”

Despite the cuts, some development is continuing. Boom noted that the Montreal studio recently finished a closed alpha of March of Giants, and Studio 5 released Courtroom Chaos: Starring Snoop Dogg as a launch title for Luna.

Amazon is also still working with external partners like Crystal Dynamics on the new Tomb Raider and Maverick Games on an open-world driving game.

The layoffs come amid a broader trend in the video game industry. In recent years, major companies including EA, Xbox, and Bend Studio have all made significant staff reductions.

In his memo, Boom acknowledged the difficulty of the situation. “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,” he wrote.

These changes show that even big companies like Amazon are reassessing their strategies in gaming, focusing on areas like streaming and casual games while reducing investment in costly AAA projects.

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