Amazon Games Scales Back AAA Development, Confirms Layoffs Amid Company-Wide Cuts

Amazon is significantly restructuring its video games division, resulting in layoffs and a halt to much of its first-party AAA game development, including massively multiplayer online games (MMOs), as part of broader cuts impacting 14,000 corporate workers across the company.

The changes, announced today, come shortly after the launch of the new game “King of Meat” and the revamped cloud-gaming platform Luna. Amazon audio, Twitch and games boss Steve Boom explained in a memo to staff that the company is refocusing its gaming strategy to prioritize areas where Amazon excels, such as streaming entertainment and value for Prime members. “We believe that this is how we will have an impact with customers that fits the scale of Amazon,” Boom wrote.

While first-party AAA development is being scaled back, Amazon will continue to collaborate with external studios on projects like the upcoming “Tomb Raider” title with Crystal Dynamics and an open-world driving game with Maverick Games. The Montreal studio is finalizing “March of Giants,” and Studio 5 will concentrate on casual and AI-focused games for Luna. This shift reflects a broader trend in the gaming industry towards established intellectual property and accessible gameplay, as detailed in recent reports from GameSpot. The move signals a potential recalibration of Amazon’s ambitions in the competitive gaming market, where establishing a foothold can be incredibly costly.

According to Boom, affected employees in most countries have already been notified, with remaining global hubs to follow local processes. Officials stated that the decisions were difficult but necessary to drive the business forward, and further details will be communicated by Christoph Hartmann and Jeff Gattis to their respective teams.