Microsoft’s gaming division is undergoing a sudden leadership shakeup as two top executives depart Xbox Games Studios. Craig Duncan, head of the division, and Chief of Staff Louise O'Connor have abruptly left the company. Duncan held the top position for just 20 months, while O'Connor served in her role for less than a year.
Until a permanent replacement is found, all studios previously under Duncan's purview will report directly to Xbox Chief Content Officer Matt Booty. The sudden exit of these industry veterans arrives amid growing turbulence within Microsoft's gaming arm. Recent reports suggest the company is bracing for another potential round of mass layoffs, a sentiment echoed by new CEO Asha Sharma, who recently stated the need to "reset the business."
When I stepped into the role of leading XGS 20 months ago, my purpose was to serve our studios, our teams, and the people making our games.
- Craig Duncan, Xbox Games Studios
In an internal staff memo obtained by The Games Business and shared via GamesIndustry.biz, Duncan reflected on his tenure, stating his goal was to deliver high-quality games and strengthen the cultural fabric across the studios. He also praised O’Connor as a "thoughtful, creative, and trusted partner" who supported the teams with clarity and care.
Both executives share deep roots at Rare Ltd. Duncan led the iconic British studio for 14 years, overseeing projects like the Killer Instinct reboot, experimental titles for the Kinect peripheral, and the highly successful launch of Sea of Thieves. O'Connor’s tenure at Rare dates back to 1999, where she worked as an animator on Conker’s Bad Fur Day and later served as a producer on the troubled Everwild project.
The Cost of a Corporate Reset
While Duncan’s departure memo maintains a diplomatic tone, the abrupt exit of two highly experienced Rare veterans signals a deeper ideological shift within Xbox leadership. Sharma’s call for a "reset" implies that Microsoft is pivoting away from its previous era of aggressive studio acquisition, moving toward strict consolidation and cost-cutting.
For Xbox Games Studios, losing a leader who successfully navigated Rare through its turbulent Kinect years into the live-service triumph of Sea of Thieves is a significant blow. It suggests that the upcoming restructuring may prioritize immediate financial efficiency over long-term studio culture. This leaves the remaining development teams in a precarious position under Booty's consolidated control, raising questions about the creative autonomy of Xbox's first-party lineup.
