Amazon Games Unit Hit by Layoffs, Will Halt ‘Significant Amount’ of AAA Development and Shift Online Strategy

Amid sweeping layoffs that began throughout ecommerce giant Amazon Tuesday, the company is making “significant” changes to its video games business.

The move comes just as Amazon had unveiled its revamped Luna gaming platform and outlined plans to continue internal development and publishing plans for big-budget AAA titles (including massively mutliplayer online games) alongside its new push for party games.

An undisclosed number of cuts have been made in the Amazon Game Studios business, as first reported by Bloomberg’s Jason Schrier and confirmed by Variety, and Amazon games, Twitch and audio boss Steve Boom has detailed a larger strategy shift within the business amid these reductions.

“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,” Boom wrote in a memo to staff, which was obtained by Variety. “We believe that this is how we will have an impact with customers that fits the scale of Amazon. 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, two tenets that are always top of mind in our group. Luna launched with a great catalog of social party games and AAA blockbusters, and we have a lot more to come from Jeff’s team on that front…it’s still Day 1.”

Boom added: “We’ve also taken a critical look at the evolving dynamics of games industry and competitive landscape. 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.”

See below for Boom’s memo to staff in its entirety.

Dear Games Team,

This morning, we are making a number of changes in our Games business. While you’ve likely seen Beth Galetti’s note earlier this morning regarding the larger changes at Amazon that are taking place today, I wanted to dive a bit deeper with all of you, since the strategic changes we are making in Games go beyond what is happening company-wide.

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. We believe that this is how we will have an impact with customers that fits the scale of Amazon. 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, two tenets that are always top of mind in our group. Luna launched with a great catalog of social party games and AAA blockbusters, and we have a lot more to come from Jeff’s team on that front…it’s still Day 1.

We’ve also taken a critical look at the evolving dynamics of games industry and competitive landscape. 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.

While these changes are significant, we still have a lot going on in game development. Our Montreal studio recently concluded a successful closed alpha of March of Giants and is working hard to finish the game. Our Studio 5 team just released Courtroom Chaos: Starring Snoop Dogg as the launch title in Luna and will continue their focus on more casual and AI-focused games, optimized for Luna. Finally, we are continuing to work with our external studio partners Crystal Dynamics on an upcoming Tomb Raider title and Maverick Games on an upcoming open world driving game.

Over the course of the day, both Christoph and Jeff will reach out with more details on how these changes will affect you and your teams. Most countries with impacted employees have been notified. Our other global hubs will follow local processes and be notified at a later date.

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.

Please reach out directly to your manager or to your HRBP with any specific questions.

Thank you,

Steve