Amazon Games is making major layoffs as it shifts focus away from MMOs to its Luna cloud gaming platform: 'We have made the difficult decision to halt a significant amount of our first-party AAA game development'

Amazon's AI-powered layoff of 14,000 employees will see "significant" cuts made to its game division, according to a new Bloomberg report, which will result in a reduction in development efforts on big-budget games, including MMOs like New World.

The Bloomberg report cites a memo sent to Amazon Games employees by Steve Boom, Amazon's vice president of audio, Twitch, and games, which was confirmed and shared in full by Variety. In it, Boom says the layoffs are part of the sweeping cuts at Amazon, but also represent "strategic changes [that] go beyond what is happening company-wide."

Boom said Amazon Games leadership has been evaluating its plans over the past several months, "through the lens of our mission to deliver the very best gaming experiences to customers while leaning into the things that Amazon does best."

As an example, he cited Amazon Luna, which "leans into both streaming entertainment and delivering value for Prime members" with things like, uh, the "AI-powered Snoop Dogg game where he's a judge."

This is what Amazon envisions as the future of gaming.

Anyway, things are less rosy on the big-budget side of the coin, according to Boom: "While we’re proud of our successes in first-party AAA game development and publishing, we have made the difficult decision to halt a significant amount of our first-party AAA game development work—specifically around MMOs—within Amazon Game Studios, including making significant role reductions in our studios in Irvine and San Diego, as well as our central publishing team."

Despite the cuts, Boom said Amazon is continuing to work on the mysterious new Tomb Raider game with Crystal Dynamics, which made two rounds of layoffs of its own earlier this year, and an open world driving game being made by Maverick Games.

Amazon has struggled somewhat to establish itself in the videogame business, despite bringing virtually unlimited resources to the table. New World, rebranded last year to New World: Aeternum, seems a solid but not especially noteworthy success (update: perhaps I spoke too soon), but the free-to-play shooter Crucible was an unmitigated disaster, becoming one of the vanishingly few games I've ever seen actually be un-released. A Lord of the Rings MMO planned for 2022 was cancelled a year before its launch—after which Amazon for some reason decided to try again. It made a mess of the Western launch of Throne and Liberty in 2024, and earlier this month the co-op platformer King of Meat launched to virtually zero interest: SteamDB says there are currently eight people playing on Steam.

It hasn't been a Stadia-sized catastrophe, but neither has it been the cakewalk that Amazon apparently expected. Comparing the company's efforts to muscle in on Steam's territory, for instance, former Prime Gaming VP Ethan Evans said earlier this year that "we assumed that size and visibility would be enough to attract customers, but we underestimated the power of existing user habits. We never validated our core assumptions before investing heavily in solutions. The truth is that gamers already had the solution to their problems, and they weren't going to switch platforms just because a new one was available."

It seems so simple when you put it that way, but I guess when you're a top executive at one of the world's biggest companies, you have to spend hundreds of millions of dollars and put thousands of people out of work before you can really be sure. Boom told Variety earlier this month that Amazon's new focus on Luna does not mean it will be eliminating conventional game development entirely, but it will be moving more toward "console-friendly titles, known IPs, or known play patterns."

The number of Amazon Games employees being put out of work by these layoffs hasn't been revealed. I've reached out to Amazon for comment and will update if I receive a reply.