Amazon has pulled the plug on its Irvine and San Diego game studios, gutting its AAA gaming ambitions after a brutal wave of layoffs. On October 28, 2025, the company announced it would cut roughly 14,000 jobs across the board, with its gaming division taking a direct hit. The closures mean the end for teams behind New World and the much-hyped Lord of the Rings MMO, signaling a major retreat from big-budget game development.
Why Gamers Should Care
For players, this move means fewer new AAA titles from Amazon and more uncertainty for existing games. New World fans, in particular, are left in the dark about the game’s future. The studio’s shutdown follows the recent launch of the well-received Nighthaven expansion, now potentially its last major update. A heartfelt in-game letter from the devs, discovered post-layoffs, reads like a farewell: “We have watched the world, delighted in its players and reveled in your enjoyment of every perfect moment, every carefully crafted story, and we even bore witness to the joining of two souls who met here in Aeternum.”
Social media lit up with reactions from affected developers and fans. One MMO developer confirmed, “Can confirm AGS Irvine and AGS San Diego are gone. This means New World either goes on maintenance mode or is passed off to a third party (probably the former) and the LOTR Hot Shelob game is gone.” Another user summed up the mood: “Man, this sucks. ☹️ AGS hit among the 33,000 Amazon employee layoffs today.”
What’s Next for Amazon Games?
Internal memos from Steve Boom and Christoph Hartmann reveal Amazon is ditching first-party AAA development to focus on casual and AI-powered games. The company says it will keep supporting Throne and Liberty and Lost Ark with updates, but has offered no clear roadmap for New World or the now-canceled Lord of the Rings MMO.
This pivot is part of a company-wide efficiency drive under CEO Andy Jassy, who has overseen multiple layoff rounds since 2021. The gaming division, launched in 2012, never quite delivered on its billion-dollar investments. High-profile flops like Crucible and the rocky path of New World left Amazon trailing industry leaders like Electronic Arts and Activision Blizzard.
Industry Impact
The collapse of Amazon’s AAA push is sending ripples through the gaming world. Other tech giants, including Microsoft and Sony, have also cut back on gaming staff, but Amazon’s retreat is especially stark given its resources and initial hype. Analysts point to a mismatch between Amazon’s tech-centric culture and the creative demands of game development. Efforts to tie major games to Prime Video projects added complexity without payoff.
The company’s new strategy leans on its strengths in cloud and AI. With AWS and the Luna gaming service, Amazon hopes to carve out a niche in emerging trends, but its days of chasing blockbuster hits are over-for now.
The bottom line
- Amazon exits AAA game development, closing key studios and canceling major projects.
- Future support for New World and the Lord of the Rings MMO remains unclear.
- Amazon pivots to casual and AI-driven games, betting on tech over spectacle.