Microsoft is reportedly shutting down multiple departments involved in physical games, which seems to confirm previous leaks of an upcoming all-digital Xbox Series X console refresh.

This is amidst the chaos of Microsoft’s recent devastating layoffs of their gaming division. It has seen a staggering 1,900 employees out of a job.

In this unprecedented culling of gaming industry jobs, Microsoft has also seemingly axed several departments integral to distributing Xbox games to physical retail outlets.

This seems to corroborate previous leaks of the next Xbox Series X upgrade. It is meant to be an all-digital console, supposedly releasing in 2024.

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Microsoft Guts Xbox Physical Games Departments

According to games industry analyst Jez Corden, Microsoft has “shut down departments dedicated to bringing Xbox games to physical retail.”

In his post over on Twitter/X, Corden heavily suggests that Microsoft is going all-in with its digital-only initiative:

Corden states that Microsoft shut down departments related to Xbox’s physical games divisions. He goes on to imply that Microsoft is heading towards an all-digital future for Xbox. He suggests that the company is planning on completely forgoing physical game releases entirely.

It’s important to note that, while a respected Microsoft and video games analyst, Corden’s comments should be taken with a grain of salt.

Corden himself went on to clarify that, although Microsoft may be reducing its retail teams, it doesn’t actually confirm it is completely forgoing physical games… yet:

As he rightly states, Microsoft can still outsource its physical retail distribution if need be. Though, as Jez Corden aptly puts it, “the writing is on the wall” with this one.

What’s most interesting from all this is what this could mean for Microsoft’s next Xbox console. Is Microsoft planning to go all digital?

Next Xbox Will Be Digital Only

Microsoft reportedly shutting down departments related to physical games seems to confirm previous leaks of an all-digital Xbox Series X set to release sometime in 2024.

The next Xbox Series X refresh, codenamed “Brooklin”, was leaked from a legal document in the FTC vs Microsoft court debacle regarding Mircrosft’s purchase of Activision-Blizzard from last year.

According to the leak, the new Xbox Series X refreshed console will be “all digital”. Apparently, It will have increased internal storage to compensate for the lack of physical games. It is supposedly going to release in 2024.

Xbox Logo

Here are the console’s leaked features:

  • Digital only, no disk drive
  • 2TB of internal storage
  • Faster Wi-Fi 6E
  • Front USB-C port with power delivery
  • All-new, “more immersive” controller

That’s a whole extra terabyte of storage when compared to the original Xbox Series X’s 1TB of internal memory.

The recent layoffs and alleged culling of Xbox’s physical games departments seem to corroborate Microsoft’s all-digital initiative for Xbox moving forward.

When taking in the leaks for Brooklin, Microsoft’s next Xbox Series X console refresh, it’s clear to see that Xbox fans should prepare to find themselves in an all-digital gaming landscape in the not-so-distant future.

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Passionate gamer and writer, Alpay has been featured on GamingIntel, Stuff.tv, and TheGamer. When not writing, he delves into virtual worlds, enjoys high-concept TV shows, and splurges on Steam sales.