Microsoft announced layoffs affecting up to 9,000 employees, including over 70 at Forza Motorsport developer Turn 10 Studios.
Other game cancellations reportedly include Rare's Everwild, Zenimax Online Studios' MMORPG codenamed Blackbird, and Microsoft's new Perfect Dark game.
Microsoft-owned King and Raven Software were also impacted by the layoffs.
Microsoft aims to increase agility and effectiveness by removing management layers and focusing on strategic growth areas, following a memo from Microsoft Gaming CEO Phil Spencer.