Xbox loses Craig Duncan and Louise O’Connor as leadership exits continue. Here is what their departures mean for Xbox Game Studios during ongoing restructuring.
Xbox is losing two major leadership figures this week, deepening the sense of instability inside Microsoft’s gaming division. Craig Duncan, head of Xbox Game Studios, is stepping down after more than 18 months in the role. Louise O’Connor, the division’s chief of staff, is also leaving after roughly 11 months in the position.
Both leaders came from Rare, one of Xbox’s oldest and most recognizable studios. Their simultaneous departure marks another significant shift in Xbox’s leadership structure at a time when the division is already navigating financial pressure, internal restructuring, and looming layoffs.
Who Is Craig Duncan and Why His Departure Matters
Craig Duncan joined Rare in 2011, overseeing the studio’s transformation from Kinect titles to the massive success of Sea of Thieves. In November 2024, he replaced Alan Hartman as head of Xbox Game Studios, overseeing more than 20 internal teams.
His exit comes at a moment when Xbox is under intense scrutiny:
- Internal memos revealed declining revenue
- Profit margins have dropped to 3 percent
- The studio system was described as “overstretched”
- Bloomberg and IGN report major layoffs planned for July
Duncan was expected to help stabilize the division. Instead, he is leaving during its most turbulent period in years.
Who Is Louise O’Connor
Louise O’Connor spent more than a decade at Rare, serving as:
- Executive producer
- Incubation director
- Art director
She became chief of staff for Xbox Game Studios in 2025, acting as a key organizational and cultural bridge between studios and leadership. Her departure alongside Duncan removes two of the most experienced Rare veterans from Xbox’s upper ranks.
What Duncan Said in His Farewell Message
In a message to employees, Duncan reflected on his 20 months leading Xbox Game Studios:
“My goal was to serve our studios, our teams, and the people who create our games. Together, we sought to launch high quality games, strengthen the culture across our studios, and help shape the future of the business.”
He also praised O’Connor:
“Louise was a thoughtful, creative, and trustworthy partner who consistently championed creative talent.”
Why These Departures Matter Now
The timing is impossible to ignore. Duncan and O’Connor are leaving:
- Weeks after Xbox leadership admitted to $500 million in lost revenue over five years
- During a period of rising hardware costs and strategic uncertainty
- As Xbox prepares for significant layoffs in July
- While Project Helix, the next Xbox console, faces budget and component challenges
- Amid public criticism from industry veterans like Chris Avellone, who says even “safe” studios are now worried
Rare itself has been in a transitional phase, with Everwild still in development and Sea of Thieves continuing live service support.
Losing two long‑time Rare leaders at once adds to the perception that Xbox’s internal structure is being reshaped from the top down.
What Happens Next for Xbox Game Studios
Until Microsoft appoints a new head of Xbox Game Studios, all teams previously reporting to Duncan will now report directly to Matt Booty, Xbox’s chief content officer.
This centralization suggests:
- A temporary consolidation of decision making
- A possible restructuring of studio oversight
- A shift toward tighter executive control during the reorganization
Given the financial pressures outlined in recent memos, leadership changes are likely part of a broader effort to streamline operations before the next fiscal year.