The Coalition cuts projects and announces layoffs in restructuring.

The scenario at The Coalition, a Canadian studio owned by Microsoft and responsible for the Gears of War franchise, deteriorates with the confirmation of cancellation of multiple unannounced projects and internal communication of imminent layoffs. The decision marks a significant restructuring within the Xbox Game Studios ecosystem, facing increasing pressure for more strategic and sustainable deliveries.

Sources close to the studio reported that the canceled games were in early stages of production and had not been revealed to the public. Nevertheless, the sudden cut raises questions about the direction of The Coalition, which had been positioned as one of the creative pillars of Microsoft after the release of Gears 5 in 2019.

The company justified the measure as a strategic need to "focus on fewer projects with greater impact", aligning its resources in the long term. The official statement reinforces the idea that the cancellations aim to redirect attention to titles with more potential within the current portfolio expectations.

"We are committed to maintaining a strong and creative team, but we recognize the need for adjustments at this time", communicated the management of The Coalition in an internal note.

The layoffs, whose number was not disclosed, are expected to affect professionals from various areas, including developers directly linked to the canceled projects. The measure follows the trend of cuts affecting the entire sector since 2023, with companies like Electronic Arts, Ubisoft, Riot Games, and Epic Games carrying out similar restructurings, totaling thousands of layoffs in the global gaming industry.

Despite the downsizing, Microsoft assured that it will continue to invest in its main franchises and provide support to The Coalition during this transition phase. The future of the Gears of War franchise, in fact, remains under the studio's care, although no new title has been officially announced since the spin-off Gears Tactics released in 2020.

Internally, the company had been operating with multiple prototypes and testing new technical approaches, including the use of Unreal Engine 5, a technology with which The Coalition has been collaborating directly with Epic Games. The change in direction may indicate that some of these initiatives did not meet the expected milestones or that Microsoft's strategy now demands more immediate and financially viable deliveries.

The moment reinforces how even studios with a consolidated history and access to cutting-edge technologies face harsh cuts in the name of survival and reorganization of goals in the current AAA gaming market.