Daniel Tavares

Breaking and fixing games for 20 years. Running my own thing at Dan in the Cloud. Unreal & Unity. Hot takes included.

[Daniel Tavares @dBugSlayer]

Working on getting back to my workout daily practice. So far, so good. What's yours?

[Daniel Tavares @dBugSlayer]

@alexkoch_ai Tau should be riding on a Waymo or Zoox. Automate all the things!😁

[Daniel Tavares @dBugSlayer]

@Pirat_Nation I guess he learned a few lessons along the way. It's also easier when you start fresh than to have to support legacy systems. It'll be interesting to see what he builds.

[Daniel Tavares @dBugSlayer]

I'll be at @GCXEvent this Friday and Thursday (July 24 & 25th 2026). I hope to see you there!

[Daniel Tavares @dBugSlayer]

@TimSweeneyEpic I can see that happening.

[Daniel Tavares @dBugSlayer]

So I decided to experiment getting Fable 5 and Grok 4.5 to collaborate on some coding tasks. Fable 5 does the planning and review and Grok 4.5 executes. It's been an interesting experience so far.

[Daniel Tavares @dBugSlayer]

@TimSweeneyEpic I agree. One either keeps up or gets left behind.

[Daniel Tavares @dBugSlayer]

Having fun playing around with #Panda3D lately. And I even got to contribute a small patch to their Vulkan rendering backend effort. Looking forward to contributing more. 🐼

https://t.co/YxqU7h0UtE

[Daniel Tavares @dBugSlayer]

@quibbler @Tooth_Chipper That’s exactly what I thought

[Daniel Tavares @dBugSlayer]

3,200 people. That's the scale of today's XBOX reset.

I was at Zynga when its web gaming foundation was crumbling. The mobile pivot was painful, but necessary. The talent leaving XBOX doesn't disappear. It seeds the next wave of studios.

To everyone affected: my inbox is open.

[ASHA @asha_shar]

This is an important email I sent today to all employees at XBOX:

Team,

We are beginning the most significant restructure in XBOX history. After careful consideration, I've made the difficult decision to reduce our team by approximately 3,200 throughout FY27. This will include approximately 1,600 role eliminations today, and in addition, four studios will leave XBOX to new management. I recognize that a year-long restructuring creates additional challenges. Unfortunately, it is not possible to make all the necessary changes in a single day, and I wanted to be direct about the scale.

I know this is painful. These changes will directly affect people who have poured their creativity into building XBOX. Many joined us through acquisitions, while others were recruited here, or sought us out because they loved this industry and loved XBOX. Today's decisions do not reflect their talent or dedication.

Our business today is not healthy. We are operating at margins that are 3–10x lower than comparable platform and publishing businesses. We entered Gen 9 with a smaller install base and a higher cost structure. To grow, we bet on Game Pass, multi-platform, and a broader portfolio of content. While those businesses have created meaningful value, they did not grow at the pace we expected. As that happened, our core business weakened, and we added more teams, more investment, and more time, hoping for a better outcome. And now the industry is facing the most severe hardware crisis in its history. We must reset XBOX.

First, we will reset our content portfolio.

Since 2018, we have aggressively expanded our studio portfolio while the number of games created each month across the industry now outpaces the last ten years combined. We now find ourselves competing not only with the largest publishers, but also with smaller independent studios. It is neither possible nor desirable to own every great independent studio. We have also learned that we are not the best home for every type of studio; in a typical year, we lost 64 cents for every dollar we invested. As we reset XBOX, we will help independent creators succeed by providing open development tools and audiences to realize their vision.

Compulsion Games and Double Fine Productions will return to management and transition to independent studios with their IP, catalog, and runway for their next games. Ninja Theory and Undead Labs have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3. In France, Arkane’s management is beginning required consultation with its Works Council to review potential strategic options.

We are also making reductions across other units, and in some cases, shifting investment to focus on higher priority projects. These changes vary in size across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and XBOX Game Studios. None of our first party publicly announced games or projects are being cancelled as part of these reductions.

In addition, Mojang and King will now report directly to me. These two studios have increasingly become platforms and are our largest by monthly active players. They bring critical geographic, demographic, and differentiation to XBOX.

Second, we will reset our platform.

We know that great technology gets better when it gets simpler, not bigger. Today, in some parts of the company, work passes through as many as 14 layers of management. Our platform teams are 40% larger than they were at the start of this generation, even as our player base and playtime have declined. That complexity has slowed decisions, blurred accountability, and made it harder to deliver for players. As we reset XBOX, we will simplify.

We will reduce management layers to no more than 5, and where possible, 3. We will deliver success through a flatter organization that is built around makers (individual contributors focused on building), player-coaches (leaders who remain deeply involved in the work while developing their teams), and directly responsible individuals (DRIs) who own key decisions and outcomes. And we will streamline how we work across our tools, with a cleaner code base, shared services, and 50% reduced vendor spend.

Third, we are resetting how we operate.

As XBOX grew our headcount, we became more fragmented. Teams, studios, and functions often operate independently, and it became harder to work towards a shared goal, make the right tradeoffs, and get things done.

For the first time, we are establishing a Chief Operating Officer with end-to-end P&L responsibility across content, hardware, platform, and services. Helen Chiang has been promoted to this role and will report directly to me. Over nearly two decades at XBOX, Helen has helped build some of our most important businesses, from XBOX Live to leading Mojang and the Minecraft franchise. She will bring our businesses together under one operating model, making sure we make clear investment decisions, learn from our successes and failures, and hold ourselves accountable for results.

Thank you, Dave McCarthy, who is retiring after 17 years with XBOX. Dave has played a defining role in building the platform that millions of players rely on every day and has been a trusted partner through many of the biggest moments in XBOX's history. We wish him all the best.

These changes are about a bigger future for XBOX, not a smaller one. The next decade of gaming will be larger, more global, and more creative than anything we've seen before. This year, we'll invest as much in XBOX as we ever have, but we'll invest with greater focus, greater discipline, and greater clarity, all in service of making XBOX where the world plays and creates.

I want XBOX to be one of the few companies that entertains more than a billion people each day and gives everyone the opportunity to create and connect. I know we can achieve this goal. XBOX has many of the most beloved franchises in entertainment history, talented studios around the world, and we will return to growth in 2027.

History is full of companies that mistake longevity for inevitability. We will not be one of them.

Asha

[Daniel Tavares @dBugSlayer]

@steipete Well said Peter. It’s easier to point out the defects and criticize than to spend the time contributing

[Daniel Tavares @dBugSlayer]

@mitchellh Interesting. I’ve got to try that myself.

[Daniel Tavares @dBugSlayer]

Game industry layoffs aren't a cycle anymore. They're the weather.
I used to bet my stability on one "safe" studio job. Watched that stop working — for people way more talented than me.
So I stopped betting on one lane. Built a few instead.
Where are you placing your bets?

[Daniel Tavares @dBugSlayer]

@TimSweeneyEpic Sequoia National Park is amazing. Enjoy the break. I miss that place big time.

[Daniel Tavares @dBugSlayer]

I'm sure this will be a very controversial opinion but despite all of the criticism against Verse replacing Blueprint, I see this as a positive change to the ecosystem as it gives Epic the freedom to rethink how things are built and done.

[Unreal Engine @UnrealEngine]

Hey Everyone. Our aim is to ship Early Access for UE6 by the end of 2027 and Blueprints will be supported in Early Access and the initial UE6 releases, but deprecated in the future.

Deprecation will mean a feature continues to be available without improvements, then is eventually removed. This timeline will be clearly communicated along with ways to migrate projects to Verse.

We recognize the value that Blueprints brought to UE4 and 5, but we strongly believe that Verse will become a more powerful and capable way to create game logic. We’ve already seen both experienced and new programmers create amazing things with Verse that would be challenging to do with Blueprints.

More details and conversations from us around this to come as UE6 Early Access approaches.

[Daniel Tavares @dBugSlayer]

@mitchellh Boy, I miss SF so bad.

[Daniel Tavares @dBugSlayer]

The honeymoon is coming to an end and the real economics of the business model are kicking in. Time to become efficient and figure out a sustainable and predictable way of using these AI agents.

[Hedgie @HedgieMarkets]

🦔GitHub Copilot switched to token-based billing this morning and users are already out of credits. Pro+ subscribers paying $39 a month are reporting 60% of their credits gone in two hours of normal use. One user lost 20% of their allowance from a single file review with no code changes. Another hit their monthly cap before the calendar even flipped to June.
Orgs with shared token pools have no way to see individual usage, so entire teams get cut off when one person runs a heavy prompt. Users are canceling and moving to Claude Code and Codex. GitHub community forums are on fire.

My Take
Flat-rate AI subscriptions were always subsidized. Everyone in the industry knew it. Today the subsidy ran out for a few million developers at once. The problem is a lot of companies already restructured around these tools. They cut headcount and told remaining engineers to lean on Copilot instead of building skills internally. Those companies now depend on a tool whose cost just became unpredictable and whose usefulness completely changes when you have to ration prompts to stay under budget.

The developers moving to Claude Code and Codex will hit the same wall eventually. Every AI provider faces the same unit economics. Anthropic filed its S-1 this morning, and the durability of its revenue depends on whether customers stick around once real pricing kicks in everywhere. If a $39 subscriber cancels after one day because the tool became unusable, multiply that across millions of seats and the churn risk becomes very real.

Today showed what happens when AI pricing meets reality. The companies that built their workflows around cheap tokens just discovered the tokens aren't cheap anymore and the people who knew how to do the work without them are already gone.

Hedgie🤗

[Daniel Tavares @dBugSlayer]

@officiallynotai @trikcode Exactly. You have to spend the time and learn how it all works regardless of who wrote it.

[Daniel Tavares @dBugSlayer]

I’ve been experimenting with AI coding tools while getting into blockchain development. I built a small CLI for inspecting Bitcoin addresses, balances, UTXOs, and transactions.

Built with Codex.

https://t.co/skAbU43opz

[Daniel Tavares @dBugSlayer]

@DavidSacks I had a hunch this was going to be the case. It’s great to start seeing some data backing that up.