Amid sweeping layoffs that began throughout ecommerce giant Amazon Tuesday, the company is making “significant” changes to its video games business.

The move comes on the heels of Amazon launching new game “King of Meat” (pictured above), and just as the company had unveiled its revamped cloud-gaming platform Luna and outlined plans to continue internal development on big-budget AAA titles (including massively multiplayer online games) alongside its new push for party games.

An undisclosed number of cuts have been made in the Amazon Game Studios business, as first reported by Bloomberg’s Jason Schrier and confirmed by Variety, as part of the overall elimination of 14,000 corporate workers at Amazon this week.

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Amazon audio, Twitch and games boss Steve Boom says that while the layoffs are happening in connection with the overall company cuts, these reductions also indicate a larger strategy shift within the games business, which consists of Amazon Game Studios, led by Christoph Hartmann, and Amazon Luna, overseen by Jeff Gattis.

“Over the last several months, we’ve been evaluating our go-forward plans, specifically through the lens of our mission to deliver the very best gaming experiences to customers while leaning into the things that Amazon does best,” Boom wrote in a memo to staff Tuesday, which was obtained by Variety. “We believe that this is how we will have an impact with customers that fits the scale of Amazon. Last week’s launch of the all-new Luna is a great example, as it leans into both streaming entertainment and delivering value for Prime members, two tenets that are always top of mind in our group. Luna launched with a great catalog of social party games and AAA blockbusters, and we have a lot more to come from Jeff’s team on that front…it’s still Day 1.”

Boom added: “We’ve also taken a critical look at the evolving dynamics of games industry and competitive landscape. While we’re proud of our successes in first-party AAA game development and publishing, we have made the difficult decision to halt a significant amount of our first-party AAA game development work – specifically around MMOs – within Amazon Game Studios, including making significant role reductions in our studios in Irvine and San Diego, as well as our central publishing team.”

According to Boom, Amazon is “continuing to work with our external studio partners Crystal Dynamics on an upcoming ‘Tomb Raider’ title and Maverick Games on an upcoming open world driving game,” as Amazon’s Montreal game studio is finishing work on its “March of Giants” game, while Studio 5 (the team behind Luna’s new “Courtroom Chaos: Starring Snoop Dogg”) “will continue their focus on more casual and AI-focused games.”

Last week, Amazon Luna relaunched (the cloud-gaming service first debuted in 2022) with a new lineup of premium third-party games, including “Hogwarts Legacy” and Xbox’s “Indiana Jones and the Great Circle,” and a UI update, as well as a party game collection labeled “GameNight.”

Earlier this month, Boom told Variety that the overhaul of Luna didn’t signal a shift away from Amazon developing its own AAA titles, but that it did indicate plans to focus more on “console-friendly titles, known IPs or known play patterns.”

“If you were to trace the arc of what we’ve released and what we’ve now announced from our games studio, it would actually point in this direction,” Boom said. “So what started out in massively multiplayer games, MMOs, we’ve really widened the aperture, if you will. And so you’ve seen announcements for like things like ‘King of Meat,’ ‘Tomb Raider,’ our upcoming driving game, ‘Lord of the Rings,’ and kind of moving more in that direction of what I would call console-friendly titles, known IPs or known play patterns. The MMOs, those are really PC games. We launched ‘New World’ on consoles about a year ago, and it’s done really, really well, but those games at their core appeal to the hardest core-PC gamers.”

See below for Boom’s Tuesday memo to staff in its entirety.

Dear Games Team,

This morning, we are making a number of changes in our Games business. While you’ve likely seen Beth Galetti’s note earlier this morning regarding the larger changes at Amazon that are taking place today, I wanted to dive a bit deeper with all of you, since the strategic changes we are making in Games go beyond what is happening company-wide.

Over the last several months, we’ve been evaluating our go-forward plans, specifically through the lens of our mission to deliver the very best gaming experiences to customers while leaning into the things that Amazon does best. We believe that this is how we will have an impact with customers that fits the scale of Amazon. Last week’s launch of the all-new Luna is a great example, as it leans into both streaming entertainment and delivering value for Prime members, two tenets that are always top of mind in our group. Luna launched with a great catalog of social party games and AAA blockbusters, and we have a lot more to come from Jeff’s team on that front…it’s still Day 1.

We’ve also taken a critical look at the evolving dynamics of games industry and competitive landscape. While we’re proud of our successes in first-party AAA game development and publishing, we have made the difficult decision to halt a significant amount of our first-party AAA game development work – specifically around MMOs – within Amazon Game Studios, including making significant role reductions in our studios in Irvine and San Diego, as well as our central publishing team.

While these changes are significant, we still have a lot going on in game development. Our Montreal studio recently concluded a successful closed alpha of March of Giants and is working hard to finish the game. Our Studio 5 team just released Courtroom Chaos: Starring Snoop Dogg as the launch title in Luna and will continue their focus on more casual and AI-focused games, optimized for Luna. Finally, we are continuing to work with our external studio partners Crystal Dynamics on an upcoming Tomb Raider title and Maverick Games on an upcoming open world driving game.

Over the course of the day, both Christoph and Jeff will reach out with more details on how these changes will affect you and your teams. Most countries with impacted employees have been notified. Our other global hubs will follow local processes and be notified at a later date.

There is no getting around the fact that days like this are hard, and we will be losing team members whose work and dedication have had an incredible impact on our customers over the years. We don’t make these decisions lightly, and yet they are necessary for us to continue to drive our business forward.

Please reach out directly to your manager or to your HRBP with any specific questions.

Thank you,

Steve