This week saw Microsoft and Xbox initiate the single biggest layoff wave in the gaming brand's history, with 3,200 Xbox and game development roles cut — 1,600 immediately, and another 1,600 throughout the next 12 months — as well as four studios divested from the Xbox Game Studios publishing division.

Alongside those teams and developers at ZeniMax and Bethesda, one studio that's been hit especially hard by the layoffs is id Software, the steward of the iconic and legendary shooter franchise DOOM. It's come to light that roughly half of the entire studio has been discharged, including both game devs and staffers working on its id Tech game engines.

Given the strong success of the DOOM 2016 reboot, DOOM Eternal, and last year's DOOM: The Dark Ages — which has a new Revelations DLC coming out today, one day after the cuts — the fact that id Software has been affected so significantly by the Xbox layoffs has come as a shock to many. Cuts to the id Tech team are surprising as well, as the studio's engine has historically run well and has been used for non-DOOM projects like the Wolfenstein games and Indiana Jones and the Great Circle.

That shock extends to id's developers themselves, many of whom have taken to social media platforms to express their astonishment and frustrations with the layoffs. One such employee, gameplay animator Skai Chow, has reacted to them with a scathing message for both Microsoft as well as for those "celebrating and worshipping" the cuts as a "move in the right direction."

"For my friends and followers who don't work in game development celebrating and worshipping that the layoffs yesterday were 'necessary for change and a move in the right direction'...I sure hope the sixth round of layoffs is worth our pain and your pleasure," wrote Chow. "After all, things are gonna be different this time around. Right?"

Chow's post features an image that highlights five previous rounds of Microsoft and Xbox layoffs that have come down since early 2023, including 10,000 cuts in January of that year, 1,900 discharges at the start of 2024, the closure of several ZeniMax and Bethesda studios in May that year, and The Initiative and several projects being shuttered in 2025. "We hope our pain was worth it," it's captioned.

The new Xbox CEO Asha Sharma contends that these latest cuts were a difficult but necessary move as part of a "reset" for the brand after it "overextended" with lots of expansion and "overly complex" internal systems.

Regardless of how true that ultimately is or isn't, I can't blame Chow or any other developer for feeling angry and bitter. Throughout the last four years, several thousand layoffs have wracked both Xbox and the wider gaming industry at large following overinvestment in gaming during the pandemic, resulting in extreme volatility and repeated devastating losses of talent.

I don't know what the right path forward is, especially with tariffs and the RAM crisis further complicating matters, but it's clear that the business as it is now isn't sustainable — and Chow is correct to highlight that layoffs haven't yet solved the problem. We can only hope for brighter times as Xbox and the industry reorganize.

Do you believe Microsoft and Xbox have gone too far with the layoffs at id Software? Share your thoughts below, and vote in our poll.

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Have you ever wondered why minimum specs continue to creep upward? Part of the problem is that developers don't need to be as efficient as they did decades ago.

A recent video by Dave Plummer highlights the bloat of modern applications by following the journey of Plummer making a notepad that's just 2,686 bytes.

App development is complex, and there are genuinely good reasons that games and programs require such high specs in 2026. But generally speaking, programming doesn't have the constraints of yesteryear, so developers don't need to trim code.

A single app not being optimized is not that much of an issue, but when every program on your PC is bloated, problems pop up. The same productivity workflow today requires more RAM than it did in 2015.

For context, Windows 10 launched with a minimum requirement of just 1GB (for 32-bit) and 2GB of RAM (for 64-bit). Windows 11 requires at least 4GB just to boot the operating system, but most users want much more memory. It was controversial when Microsoft and other companies started offering new PCs with 8GB of RAM this year.

Plummer is best known for creating the Windows Task Manager. He also discusses programming and Windows history on his YouTube channel.

In a recent video, Plummer shared how he made a small notepad application that's smaller in size than a YouTube thumbnail.

Tiny Retro Pad has the core functionality of the original Notepad app built by Microsoft. Notably, it lacks the modern features seen in Notepad, such as Copilot. Considering Notepad's addition of Copilot was mocked by many, Tiny Retro Pad is an improvement in some ways.

Making a notepad app that's under 4,096 bytes is more about working within constraints than the specific size of the final app. In the early days of Windows, there were several limits placed on developers, such as hardware caps. Having to work within those constraints forced developers to be more efficient.

Plummer was able to keep Tiny Retro Pad small by utilizing what's already in Windows.

"A tiny native Windows program does not bring along its own entire civilization. It arrives with a lunchbox and a map of the city," said Plummer.

Later in the video, he added, "The program is small because it is not carrying what the platform already has. And that is a lesson that modern software could stand to remember. Not every app needs to bundle the universe. Not every utility needs to ship with a browser engine."

Nowadays, PCs, tablets, and phones have absurd specs. Even modest devices have several gigabytes of memory and tons of storage. Those specs make modern workflows possible, but they also leave room for lazy development.

"Somehow it seems modern software manages to go the other way. You just want a text box and somehow you've imported a runtime, a layout engine, a renderer, a dependency tree, a telemetry client, an auto updater, and a small portion of Chromium," said Plummer.

No one needs a notepad application that's less than 4,000 bytes, but if more app developers focused on efficient code, Windows 11 would feel smoother across the board.

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Xbox is having a tumultuous week, letting go of several studios and laying off over 3,200 people as part of a big company "reset".However, that has not deterred Microsoft from updating Xbox Game Pass, as it has announced the next batch of games coming and leaving the service for the first half of July 2026.

Two major highlights from this batch include Tony Hawk's Pro Skater 1+2, a remake two-pack of the first games in the classic skateboarding franchise, and Gears of War: Reloaded, an enhanced remaster of the original game that kickstarted the Gears of War series.

Here is the full list of Xbox Game Pass titles from this batch as stated on Xbox Wire:

Games leaving Xbox Game Pass (July 15)

• JDungeons of Hinterberg (Cloud, Console, and PC)
• EA Sports Football Club 24 (Cloud, Console, and PC)
• Stellaris (Cloud, Console, and PC)
• Golf With Your Friends (Cloud, Console, and PC)
• Minami Lane (Cloud, Console, and PC)
• Powerwash Simulator (Cloud, Console, and PC)
• Shadow of the Tomb Raider Definitive Edition (Cloud, Console, and PC)
• Splitgate: Arena Reloaded (Cloud, Console, and PC)
• Super Fantasy Kingdom (Game Preview) (PC)
• Techtonica (Game Preview) (Cloud, Console, and PC)

Windows Central's take

Of course, the biggest highlight of this batch is Gears of War: Reloaded.

This game takes the iconic 2006 third-person shooter and gives it a shiny coat of 4K resolution with 120 fps for improved graphical fidelity and all of the original game's post-launch content, such as a bonus single-player campaign act, multiplayer maps, cosmetics, and more, in one definitive package.

We reviewed Gears of War: Reloaded and gave it 4 out of 5 Stars for faithfully remastering Gears of War while incorporating cross-play and cross-progression for its multiplayer modes and some neat accessibility options.

So, if you're looking to kill time while waiting for Gears of War: E-Day to drop on October 6, 2026, then Gears of War: Reloaded is a great way to do it, as it proves the original game has held up significantly well and is, literally, a bloody-good way to catch new fans up to speed before the prequel arrives, especially in co-op.

What do you think of Xbox Game Pass' first batch of games for July 2026? Which titles are you looking forward to playing the most?

If you have any thoughts on the matter, please let us know in the comments, on Reddit, or in the poll.

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A massive wave of 4,800 layoffs hit Microsoft on Monday morning this week, with 3,200 of the cuts aimed at Xbox specifically for a "reset" of the firm's gaming business. The restructuring has seen countless game developers let go as well as four studios divested from Microsoft, and individuals working on the Xbox platform itself have been affected as well.

One such staffer is Kevin LaChapelle, Microsoft's vice president of Xbox Platform In a LinkedIn post on Tuesday morning, LaChapelle shared that "I will add my name to the list of people who were laid off today at Xbox," bringing an end to his lengthy 37-year tenure at the company.

LaChapelle has overseen development of Xbox platform software "across cloud, console, and PC" since 2023. Before that, he led the creation and advancement of Microsoft's Xbox Cloud Gaming service (previously known as xCloud), and before that he led the team of engineers that built the fan-favorite Xbox Backwards Compatibility Program.

Ever since it was unveiled at E3 2015 during what I'd say is indisputably one of the best moments in Xbox history, Xbox Backwards Compatibility — a feature that lets you play hundreds of Xbox 360 games and even some original Xbox titles on Xbox One or Xbox Series X|S through an emulation layer — has been a colossal hit with fans.

At the time of its release, it also gave the fairly unpopular Xbox One a notable edge over Sony's PlayStation 4 at a time when it sorely needed one. Longtime Xbox gamers were still able to enjoy a rich library of titles from past systems on the latest console natively, whereas the PS4 was incompatible with games made for older PlayStation consoles.

I can't stress enough that the impact LaChapelle has had on Xbox has been huge — and that makes the news he's been laid off all the more upsetting to hear, especially since the Backwards Compatibility Program he led has been revived this year, with many speculating the feature will be overhauled to work with Microsoft's upcoming PC-console hybrid system Project Helix.

"I will add my name to the list of people who were laid off today at Xbox. This ends my 37 years at Microsoft. I have worked in many different parts of the company, and I will say my fondest memories are of leading the team of very talented engineers who built the Xbox Backward Compatibility program," he wrote in his post. "Sitting in the auditorium when [Phil Spencer, former Xbox CEO] announced the program at E3 2015 was incredible. The audience's reaction was unbelievable."

"I followed that with leading the team who created our Cloud Gaming product. I am a firm believer that all entertainment will eventually become streamed to you wherever you are," LaChapelle added. "I look forward to watching how Xbox evolves going forward and I wish the team nothing but success."

Ultimately, I'm very sad to see LaChapelle cut from Microsoft and Xbox, and I hope that he's able to land a new position somewhere soon. I extend that sentiment out to everyone impacted by these mass layoffs that have added to an already-devastating total that's been growing since 2022.

How important is the Xbox Backwards Compatibility Program that LaChapelle led the development of to you? What about Xbox Cloud Gaming? Let me know in the comments, and vote in our poll as well.

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Xbox's restructuring is still well underway, and before the announcement of more than 1,600 layoffs, which are expected to grow to around 3,200 through FY2027, IO Interactive was working on a title funded and set to be published by Xbox. However, amid the changes at Xbox, that funding was pulled, leaving the future of Project Fantasy uncertain, at least until now. The latest update brings both good and bad news.

IO Interactive, best known for the Hitman series and, more recently, the hugely successful 007: First Light, was working on a game funded by Xbox called Project Fantasy. After Xbox pulled funding, the project's future became uncertain, but IO Interactive has now shared an update on X (formerly Twitter), stating:

"Following the end of our external finance partnership on Project Fantasy... IOI has regained full ownership of the project and our IP... We will continue to develop and fund it independently amongst our other projects..."

Unfortunately, the announcement also came with some difficult news. IO Interactive confirmed the closure of its Istanbul studio, stating:

"We had to find a new balance for the long-term future of the studio... focused on the success of our main internal core titles... This has meant... the closure of our Istanbul studio... and starting a process to part ways with colleagues... These are hard, but necessary decisions... to retain the long-term future of IO Interactive... and to give Project Fantasy the best possible foundation to succeed under our own passion and direction."

The closure of the Istanbul Studio will sadly involve the loss of 40 jobs.

It's great to see IO Interactive retain ownership of the IP and continue developing Project Fantasy independently, but it's equally sad to see the impact on those affected by the closure of the Istanbul studio. As for Xbox, whether ending its funding for the project proves to be the right decision won't be known until the game is released.

One thing is clear, though. Xbox's shift in how and where it invests its money is already having a noticeable impact. Hopefully, those changes ultimately put the company on a stronger path, but let me know your thoughts in the comments and be sure to take part in our poll below:

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It feels like Xbox and questionable decisions are going hand in hand lately, especially as the company is set to lay off around 3,200 employees throughout FY2027, with roughly 1,600 of those layoffs already taking place yesterday.

I'm still of the opinion that Xbox needed to change and that restructuring was necessary. That doesn't make any of this easy, though, and I imagine experiencing these layoffs is far more painful than simply watching them unfold. I genuinely hope those affected are able to land on their feet.

Looking at id Software, and particularly id Tech, I can't help but feel there's been an enormous amount of wasted potential. Based on the reported layoffs, the new Xbox leadership seemingly saw little value in much of the studio, cutting roughly 50% of its staff, including members of its technology team.

Among those affected was senior programmer Michael Maynard, who spent 21 years at id Software. He took to LinkedIn, saying:

“We created arguably THE BEST first person engine technology in the industry… Yet today, Microsoft/XBOX decided half the team was deemed USELESS and needed to be let go; despite all the amazing work and effort from every designer, programmer, artist, audio specialist, level designer, fx, tech design, and on and on and on… Yes, I was part of the team (roughly 50% of the company) that was let go today. (I was there for OVER 20 years! RAGE through DOOM: Dark Ages) Sad but, I've been doing this (video games) for over 40 years so, not a huge surprise to me. Just really sad that this is how Id Software, the PIONEER/INNOVATOR of FPS action games is relegated to just another "reorganization" of assets.”

Taking to X, is also Skai Chow, Doom: The Dark Ages animator, who simply said:

"We hope our pain was worth it."

It's genuinely surprising to see id Software gutted like this. I've long believed the studio was underutilized, and I'd hoped to see it take a crack at something like Halo one day. Now, I don't even know how it's supposed to continue making DOOM, let alone take on other franchises.

In fact, I'd even have liked to see id Tech positioned to compete with the likes of Unreal Engine. It's a fantastic engine that's massively underused within Xbox, so making it publicly available, with Xbox taking a 5% royalty on game revenue similar to Unreal Engine, feels like it could have been a great opportunity.

Maybe Xbox has a plan that isn't immediately obvious, but from the outside looking in, it's hard to understand how cutting so much of a studio responsible for one of the industry's best FPS franchises sets it up for long-term success, especially since DOOM: The Dark Ages has a new expansion releasing today.

If you think this sucks, or maybe you think this is fine, let me know in the comments and be sure to take part in our poll above.

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Microsoft finds itself on the receiving end of a lawsuit about "unreasonable and excessive noise" allegedly emitting from the tech giant's Fairwater datacenter in Mount Pleasant, Wisconsin. The suit seeks compensation for damages, though the amount asked for is unspecified.

The Fairwater datacenter was unveiled in September 2025. At the time, it was the largest and most advanced datacenter. The site launched with NVIDIA’s GB200 GPUs. Each rack can process 865,000 tokens per second.

Running those GPUs makes a lot of noise. Microsoft states that the noise levels meet levels required by local ordinances, but the company has taken additional steps to reduce noise.

Microsoft shared the following update on June 18, 2026:

"Our engineering team and consultants on-site investigated the source of the sound, conducted tests, and put noise mitigations in place. Several neighbors confirmed what our independent monitoring showed: that these mitigations fully resolved the issue. We continue to work on short-term mitigation, and over the next several months, we will also install additional sound reduction components and continue to monitor sound at the site."

Despite the measures taken by Microsoft, the lawsuit about the noise from the datacenter was filed on July 1, 2026.

The lawsuit claims that Microsoft has not taken the proper steps to reduce noise in the surrounding area:

"Defendant has failed to follow proper industrial practices to prevent the offsite emission of noise, and has failed to absorb, capture, mitigate, and/or prevent noise from escaping its Data Center, thereby invading the homes and properties of Plaintiffs and the Class."

The plaintiffs of the suit claim that a "low hum" of infrasound emits from the datacenter and that the sound cannot be measured easily on the decibel scale. Our colleagues at PC Gamer highlighted that one plaintiff claimed "the constant noise [affected] his sleep." The filing states that the noise is "not only excessive, but consistent and pervasive."

Since the lawsuit was just filed within the last week, it will likely be a while before we see it reach a conclusion.

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Microsoft Flight Simulator 2024 continues to be on a roll with a packed roadmap of new content taking us to the end of the year. Just recently we had City Update 15 and World Update 22, and the next big one heading our way is Sim Update 6.

Due to drop sometime in July or August, Sim Update 6 was detailed at FSExpo last month. There's a whole bunch of new stuff headed our way that we already heard about, and now that the first beta has dropped, we get to try some of it early for ourselves.

A couple of the new features arriving with Sim Update 6 that weren't talked about during its initial reveal are ready to test right away: Upgrades to both DLSS and FSR upscaling.

With Microsoft Flight Simulator 2024 Sim Update 6, DLSS is upgraded to version 4.5, while on the AMD front, we're getting a bump to FSR 4.

DLSS 4.5 becomes the new default since it's supported on all generations of NVIDIA RTX GPUs. It comes with Dynamic Frame Generation with in-game VSync.

For AMD users, you only have an option to choose FSR. The version you use will be decided by your driver, since, unlike DLSS 4.5, FSR 4 is not supported on older generation GPUs.

Not all of the newness coming with Sim Update 6 is available to test just yet, but the promised lighting improvements are a part of this initial build. Generic airports have lights added, with the full improvements still to come.

Also in this beta is the ability to start a flight without a walkaround in the Free Flight mode. This has been added based on community feedback, where lots of folks wanted a quicker way to just jump in and do some flying.

There is an extensive list of patch notes for Sim Update 6 beta 1.8.5.0 available to read on the Microsoft Flight Simulator forums. There are a ton of fixes and improvements, both general and specific to different aircraft and systems.

If you want to try the new beta for yourself, how you get in depends on where you're playing. Sign up to be a Flight Simulator Insider first, and then flights are managed through the XBOX Insider Hub app on console or PC. Steam betas are managed through the game's Properties menu, and PS5 players can download the beta via the PlayStation Store.

I haven't taken a look at it yet myself, and as a still fairly new Microsoft Flight Simulator 2024 pilot, I might hold off on betas for a little bit. If you want to see some of what's new without installing it yourself, though, check out the YouTube video below from Huddison who walks through this first build.

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Discord is under fire again, surprising absolutely nobody. Following the user verification fiasco not too long ago, the platform has now incorrectly banned around 8000 accounts. In fairness, that's a very small number compared to Discord's more than 200 million monthly active users, but it was enough for the company to publicly address the issue on X.

The controversy began after one user (tallcowyt) highlighted what they claimed was a vulnerability in Discord's AI moderation system. According to the post, the system incorrectly identified any square grid image, including Minecraft inventories and even chessboards, as malicious content, resulting in permanent account bans for affected users.

Taking to X, Discord described what occurred, stating:

“Our systems flag content by matching it against known harmful material... similarity matching can produce false positives... a member of our Trust & Safety team always reviews flagged content before any action is taken”

It's hard to imagine someone reviewing the content and deciding that Minecraft inventories were worthy of a ban, but I digress.

The company also said "the intended behavior is to temporarily pause uploads during that review, not ban the account," but admitted, "We had a bug" that instead issued bans. It also said, "the same bug prevented the ban from being lifted automatically."

According to Discord, "Around 8,200 accounts were affected from May 2026 through last week, plus the 200 more this past weekend," adding, "We've unbanned everyone affected by this bug."

The company acknowledged the impact, saying, "We should have caught this sooner... We're working on better safeguards... and making sure our safety systems don't penalize people who did nothing wrong."

Discord is, of course, currently tied to Xbox Game Pass for those who have a Discord Nitro Subscription, as they're able to get Game Pass Starter edition alongside their subscription.

It is also worth mentioning that in spite of claims that Discord has reinstated everyone's account, the current post on X detailing the issue has a community note that states otherwise.

It is a strange bug, I have to admit, but at least Discord has addressed it and says everyone affected has now been unbanned. I use Discord daily myself, and thankfully, I haven't uploaded any images with checkered patterns, so I've managed to avoid any potential issues.

Still, it's easy to see why incidents like this shake users' confidence in automated moderation, even if they only affect a relatively small number of accounts.

Let me know if you've been impacted by this bug in the comments, and be sure to take part in our poll above.

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The Steam Machine is here, and despite an (isolated) issue dubbed the "red line of death" and performance that has been a little underwhelming, those who own the machine seem to be enjoying it. Either way, its egregious $1,000+ price tag is hardly Valve's fault, but rather a reflection of the wider industry as memory prices continue to climb.

The good news is that Valve has now released official Windows drivers for the Steam Machine, reinforcing that it's still a PC at heart. If you want to install Windows instead of SteamOS, you can, giving you the freedom to do pretty much whatever you want with the Gabecube that you own.

As Valve puts it: "Steam Deck and Steam Machine are PCs, and other applications and OSes can be installed" — there is a catch, however, as Steam hardware still doesn't officially support dual-booting, which may or may not be a deal-breaker for some.

I don't even own a Steam Machine, but I would have liked that flexible OS option if I did. Still, despite this, it's great to see how open Valve is. Providing official Windows drivers is a nice touch, and it's something the company already does for the Steam Deck.

Personally, I wanted Steam Machine to enter the market and provide serious competition for the PS5 and Xbox Series X. Unfortunately, that seems to have been wishful thinking on my part, and again, that's through no fault of Valve's. Current market conditions have pushed memory prices to the point where companies are even facing lawsuits over allegations of price-fixing and intentionally restricting supply to keep prices high.

Don't worry, though. I'm sure things can't get much worse — except they can, as I'm sure we're all aware; the memory crisis isn't going anywhere, and we, the consumers, are having to pay the price. But let me know your thoughts on running Windows on Steam Machine by leaving a comment and taking part in our poll below:

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Steam's more-than-generous refund policy is under scrutiny from the developer behind Paddle Paddle Paddle, a game heavily inspired by the "Foddian" genre. These games are designed specifically to frustrate players and are often popular with content creators because of the reactions they generate. I actually own Paddle Paddle Paddle myself and have played it with a friend. It's a co-op game where you paddle a boat through increasingly frustrating obstacles as you make your way downstream.

The game was created by solo developer Zoroarts, who has taken to X to criticize Steam's refund policy after claiming the game has been heavily affected by it, with more than 55,000 refunds. For those unfamiliar, Valve's refund policy generally allows users to refund a game within 14 days of purchase, provided they've played it for less than two hours. On X, the developer argued:

After spotting a review that read, "GREAT GAME, finished within 1:40 hrs (refunded)," the developer took to X to criticize Steam's refund policy, writing:

"This should not be possible @Steam Would be cool if you could finally do something about your refund policy... Got dozens of reviews like that and 21% refund rate even though the Reviews are 90% very positive... Thats over 55,000 Refunds btw..."

Many reviews, including some that recommend the game, openly admit they completed it and then refunded it because they finished within the two-hour window. That does feel a little disingenuous, especially if they genuinely enjoyed the experience. Since the developer spoke out, however, some users have also started leaving negative reviews that appear to focus just as much on his comments as the game itself.

One user wrote:

"Not fun, Short, Sloppy. Beat it under 2 hours and would refund if I could but waited too long to play it, you should if you can"

Another added:

"The Dev keeps crying about his game getting refunded on X despite making "millions" out of a sloppy effort"

Having actually played the game myself and genuinely enjoying it, I decided to keep it, and I do think the developer should look at releasing the game on consoles like Xbox or Nintendo Switch. I will say, though, overall, I think Steam's refund policy is a good one, even if this situation highlights one of its weaknesses.

Personally, I don't think players should be able to complete an entire game and then immediately refund it. That said, I'm not entirely sure how Valve could solve that problem without creating new ones. One idea could be tying refunds to achievements, but that would simply encourage some developers to avoid adding achievements that mark the end of a game.

Perhaps Valve could instead adjust the refund window based on a game's typical completion time or even its price. For example, lower-priced games that can reasonably be completed in a short sitting could have a one-hour refund window instead of two. Even that isn't a perfect solution, though, and it's easy to see how developers could try to design around whatever rules Valve introduces.

Those are just my thoughts, though. I'd love to hear what you think, so let me know in the comments and be sure to take part in our poll above.

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CEO Asha Sharma has discussed the major restructuring currently underway at Xbox in a new interview with Fortune. It could be painful to watch, and even more so for those affected by the layoffs, but it was presumably all necessary. I'm still a bit shell-shocked that some Xbox studios reportedly had as many as 14 layers of management, an absurd number that Sharma is now capping at no more than five.

Sharma told Fortune: "In order to grow, we made a bunch of bets … and as we did that, we inherently didn't focus on the core business… The number one measure of your strategy is what you put your resources behind, and we simply spread ourselves too thin."

The interview also revealed new details about Xbox's strategy moving forward, as Fortune explains: "The unit's new plan centers on returning focus to its flagship Xbox console, which represents 80% of its business, funneling its content budget toward high-growth areas such as the Minecraft game, and stepping away from smaller studios."

Despite Xbox's efforts to broaden its audience through the "This is an Xbox" campaign, it appears the console remains the foundation of the business, accounting for 80% of Xbox overall. If anything, the latest restructuring suggests Microsoft is refocusing on the audience that has supported the brand from the beginning.

As I said, I think many of these changes were necessary, despite my own frustrations and what I still believe was a mistake in letting State of Decay 3 leave alongside Undead Labs. That said, Sharma revealed that Xbox was losing 64 cents for every $1 it invested in its studio strategy. In other words, it wasn't even breaking even, and that's simply not sustainable for any profit-driven company.

Xbox has, in many ways, backed itself into a corner. I always felt Sharma would eventually have to make some incredibly difficult decisions, as that's ultimately what she was brought in to do. As much as this situation is awful for everyone affected, I'm still hopeful Xbox can get back on track.

While the company itself appears to be stepping away from smaller studios, I hope it doesn't stop investing in independent developers. Some of the industry's most creative and successful games have come from indie teams, and they're clearly a gold mine of great content.

Do let me know your thoughts in the comments, and be sure to take part in our poll below:

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A bizarre Windows 11 issue is causing a single, bloated folder to swallow massive amounts of storage. In extreme cases, the folder can balloon up to 500GB. Others have seen dozens of gigabytes eaten up by the folder.

A file called "CapabilityAccessManager.db-wal" is the culprit. Windows Latest took a deep dive into the situation and Microsoft has addressed that file with a recent update.

Capability Access Manager is related to granting apps permissions, such as letting an app know your location or giving an app permission to use your PC's camera. The CapabilityAccessManager.db-wal file can grow to be large, though eating up 500GB of storage is not an intended behavior. That's the size of that file for one Reddit user. Others have lost a similar amount of storage to the bloated file.

It appears that Windows 11 is wrongfully logging repeated events for access and then storing that information. Capability Access Manager is supposed to store large amounts of data, but it should store items more efficiently.

July's Patch Tuesday update should fix the issue. You can push the fix right away by installing an optional update.

A Microsoft support document outlines all the improvements rolling out normally (emphasis added):

• [Secure Boot] With this update, Windows quality updates include additional high confidence device targeting data, increasing coverage of devices eligible to automatically receive new Secure Boot certificates. Devices receive the new certificates only after demonstrating sufficient successful update signals, maintaining a controlled and phased rollout.
• [Authentication] This update improves Netlogon secure channel connections between domain controllers, enabling successful connections from member servers to domain controllers set up before 2025.
• [Emoji Panel Update] The emoji panel (Windows key + period (.)) now uses GIPHY for GIF content following the deprecation of Google’s Tenor API. Starting June 30, 2026, install the latest Windows update to continue using GIFs in the Emoji panel. If you don’t update, you will see a "GIF service is not available" error in the panel. Installing the latest Windows update will restore access to GIFs.
• [Networking] This update improves how your device connects to shared network resources. Connections used by apps and system features, such as the NetUseAdd function, now work more reliably, including unauthenticated (null session) connections.
• [Recycle Bin (known issue)] Fixed: This update addresses an issue where the confirmation dialog might display an internal Recycle Bin file name instead of the original file name when permanently deleting a file. This issue might occur after installing the June 2026 security update (KB5094126).
• [Storage] This update improves disk space usage for the CapabilityAccessManager.db-wal file.
• [Taskbar] This update improves notification badge display across your apps. Notification counts and badge visuals now update correctly, helping you stay up to date with new activity.

The change log notes the issue related to the CapabilityAccessManager.db-wal file, but it does not go into much detail.

It is possible to delete the folder containing the CapabilityAccessManager.db-wal file, but you have to be careful. If you delete just the file or erase the wrong item, you could break your PC's Wi-Fi connectivity.

A Reddit user deleted the file and was no longer able to connect to Wi-Fi. In their case, removing the folder and restarting their PC fixed the issue.

If your PC works well and you have enough space for your everyday workflow, you don't have to do anything right away. You can simply wait for the fix to roll out next month.

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The dust is still settling over Xbox's "big reset" cuts, and will continue to settle for many weeks to come just yet.

Microsoft CFO Amy Hood has led a massive job culling across the firm, with almost 5,000 staffers set to lose their roles over the next fiscal year. 3,200 of those will be in Xbox alone, with some escaping as divestitures. Remaining studios have been "gutted" by some accounts, with massive reductions at Obsidian and id Software, despite success stories in Grounded 2 and DOOM: The Dark Ages.

The silver lining for some is that Xbox execs spent the past few weeks finding buyers for studios Microsoft's CFO lined up to otherwise shut down. One of those is Undead Labs, makers of State of Decay, who have been through hell and back to get to where they are today.

Undead Labs was founded in 2009 and acquired in 2018, as Xbox sought to bolster its exclusive content spread for Xbox. The integration was immediately met with problems.

Undead Labs leader, co-founder, and World of Warcraft alumnus Jeff Strain left the studio in 2019 not long after the acquisition, and then the firm was immediately hit with lockdown regimes heading straight into the Covid-19 pandemic. The disruption was palpable.

Unable to properly incubate State of Decay 3, Undead Labs worked on free updates for State of Decay 2 as Microsoft struggled to properly integrate the studio and teams. Despite State of Decay 3 being announced in 2020, it wouldn't actually enter full development until far later.

These should be mitigating factors when Microsoft's bean counters were looking at ways to reduce costs. But, in Microsoft's typical, disappointingly short-sighted fashion, Microsoft seems oddly unaware of the potential it has in the palm of its hands.

Indeed, as of writing, State of Decay 3 is presently the 28th most wishlisted game on Steam, and comes in higher than Halo Campaign Evolved and Gears of War: E-Day both. As far as Xbox games go, State of Decay 3 is second only behind big-budget blockbuster Fable.

State of Decay 3 was by far my most anticipated Xbox game this side of Clockwork Revolution. The early alpha glimpses we've gotten look incredible, and as an evolving multiplayer title, it has the painfully obvious potential alongside games like Grounded and Sea of Thieves.

It's utterly absurd and frustrating that Microsoft, for whatever reason, weren't able to give them just a bit more time and subsidize their own mistakes. Microsoft banks billions of dollars annually, and there's really no excuse for the disruption and havoc it is imparting onto its teams.

I'm not naïve. I know quite painfully well that in order to get paid, you have to have a business that makes money — at least eventually. But at the same time, Microsoft is also among hyperscalers chasing AI infrastructure expenditure based on theoretical growth, using the models of companies funded entirely by theoretical money.

Of all the cutbacks and nonsensical choices Microsoft has made this week, State of Decay 3 above all, for me, underpins how Microsoft's fiscal management policies all too often make for hasty self-defeating mistakes.

There are arguably projects at Xbox that shouldn't have been greenlit, and there are strategic decisions made that remain utterly questionable for sure — but Microsoft is making so many baffling choices to pay for those mistakes. For me, the fact Xbox has been forced to divest State of Decay 3 really represents the apex of Microsoft's generalized ignorance.

In the future, I look forward to writing about how studios like Undead Labs expanded and became success stories free of Microsoft. But there are many hundreds of developers who might not be so lucky.

Perhaps the thousands of employees that remain at Xbox will benefit from a more focused Xbox managerial structure not spreading themselves so thinly, but it remains to be seen. And perhaps I actually am being naïve here.

Microsoft has created an environment where every FY end in July, we're writing articles like this. Being reminded of missed opportunities, and the human costs of Microsoft's legendarily short-sighted impatience.

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