The head of Xbox Game Studios, Craig Duncan, is stepping down after less than two years, and the timing could hardly be worse. His resignation, reported on 15 June 2026, comes as teams across Xbox brace for the latest round of mass layoffs and potential studio closures under new CEO Asha Sharma’s “reset.” His exit hands chief content officer Matt Booty direct oversight of the entire first-party network, including the upcoming Fable, just as that pipeline needs stability most.

A Leadership Vacuum Before the Cuts

Duncan had led Xbox Game Studios for 20 months, after running Sea of Thieves maker Rare for more than a decade. He oversaw a sprawling network spanning Halo Studios and The Coalition through to Double Fine and Undead Labs, and was responsible both for getting blockbusters like the upcoming Fable shipped and for navigating Microsoft’s evolving strategy around exclusives and multiplatform releases. With his departure, all of those studios now report up to Matt Booty. “When I stepped into the role of leading [Xbox Game Studios] 20 months ago, my purpose was to serve our studios, our teams, and the people making our games,” Duncan said in an email to staff. “I’m proud to say we delivered many flawless launches that drove business success for the company.”

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Sharma’s Reset Reshapes the Studio System

The departure fits the blunt strategy Sharma laid out to staff last week, which leans into funding the biggest franchises while winding down less profitable parts of the portfolio. “We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win,” Sharma said. “At the same time, as we saw this past weekend at Showcase, a reliable pipeline of first- and third-party exclusives and new IP are critical to our success. We need to reassess the balance between these and our investment priorities for the next 5 years.” Xbox has signalled plans to invest more in its biggest blockbusters while trimming elsewhere, and did not respond to a request for comment on Duncan’s exit.

Louise O’Connor Also Steps Down

Duncan is not leaving alone. Xbox Game Studios chief of staff Louise O’Connor is also reportedly stepping down after more than 11 months in the role. Like Duncan, she came up through Rare, where she held roles including executive producer, incubation director and art director, and was an executive producer on the studio’s long-in-development fantasy game Everwild until it was cancelled last year in Microsoft’s previous round of sweeping cuts.

With both senior leaders gone and a fresh wave of layoffs looming, Xbox Game Studios heads into its most consequential stretch in years without a permanent head at the top.

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