Amazon has announced a significant departure from its gaming ventures, ceasing new content development for its MMO, New World, amid sweeping layoffs impacting 14,000 positions. This has stirred uncertainty around the future of its The Lord of the Rings MMO.
Just yesterday, October 28, Amazon revealed it would be trimming 14,000 jobs — a historic reduction for the tech behemoth. This move mirrors similar downsizing trends seen at other tech giants like Microsoft and Meta, despite Amazon’s strong market performance.
Why are these cuts happening? The rise of AI is a major factor. According to a memo to staff by Beth Galetti, Amazon’s Senior VP of People Experience and Technology, the company needs to adapt rapidly in a world being reshaped by AI innovations.
Some may ask why we’re reducing roles when the company is performing well. Across our businesses, we’re delivering great customer experiences every day, innovating at a rapid rate, and producing strong business results. What we need to remember is that the world is changing quickly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones). We’re convinced that we need to be organized more leanly, with fewer layers and more ownership, to move as quickly as possible for our customers and business.
Reports indicate that Amazon’s gaming division is facing substantial cuts, specifically affecting development activities and staff in Irvine and San Diego.
Impact on New World and Future Plans
While New World will continue to operate into 2026, its development future looks bleak. The MMO was a standout success for Amazon, a rarity following several failed projects. However, player engagement has dwindled since its 2021 peak, which saw 913,634 concurrent players on Steam.
Amazon is scaling back its focus on MMOs but intends to advance projects like Amazon Games Montreal’s strategy game March of Giants, a new Tomb Raider entry by Crystal Dynamics, and cloud gaming ventures on Luna with casual and AI-driven experiences. The UK-based Maverick Games will keep developing its racing game, and Amazon will also keep publishing externally developed games like Lost Ark and Throne & Liberty in western regions.
The Lord of the Rings MMO and Tomb Raider Developments
Amazon’s in-house project, The Lord of the Rings MMO, remains largely under wraps since its 2023 announcement. Last year, Christoph Hartmann of Amazon Games discussed the company’s ambitious lineup of ten ongoing projects, including Tomb Raider and the LOTR MMO, alongside a new driving game from ex-Forza Horizon developers.
Regarding The Lord of the Rings MMO, Hartmann highlighted the early stage of its development, focusing on finding a unique angle rather than rehashing existing narratives.
“We’re still trying to find the hook, find that idea of what it is because we don’t just want to go and do the same thing over,” he noted.
Questions about the Tomb Raider project persist amidst the turbulence involving the Embracer Group, but Hartmann reassured that Crystal Dynamics remains largely insulated from these issues.
“People obviously look at what the parent company is doing, but it never impacted on resources, never led to any changes on management for them, so they’re fine. I mean, doing a new Tomb Raider, the bar is so high. The longer you go, the expectation goes higher, so it’s a huge, huge task, but things are progressing. I mean, there’s some really great ideas here,” Hartmann said.
“Obviously, we’re not going to share any with you even if we would love to, but things are going well, things are moving forward. And from what I could tell, Crystal was pretty sheltered, because also when you look before…they went through a couple of ownership changes anyway before, it’s not brand new for them.”
Crystal Dynamics recently laid off a number of workers following Microsoft’s cancelation of the Perfect Dark reboot. At the time, the studio insisted Tomb Raider was still in development and unaffected by the decision.
Amazon’s significant restructuring efforts reflect the evolving priorities within its gaming division, emphasizing strategy and innovation while navigating the challenges of a rapidly changing tech industry.
Crystal Dynamics was originally brought in to revitalize Perfect Dark after struggles getting the project moving with former co-developer, Certain Affinity. Crystal was later acquired by the Embracer Group in 2022, at which time the studio was revealed to have 273 employees across its Austin, Bellevue, and San Mateo offices. Crystal laid off 10 people in 2023, and laid off 17 more people earlier this year. It’s unclear how many remain now.