Microsoft is eliminating 268 roles across its Xbox division as part of a broader restructuring, with Halo development moving to Activision and several studios being reorganized or divested.
Halo Development Shifts to Activision
Activision will take on the next mainline Halo title through a newly formed team that will stay separate from its Call of Duty development groups. Halo Studios will continue in a smaller capacity, supporting the Halo community and existing games on the market. Activision is also expanding its responsibilities to include Rare, the studio behind Sea of Thieves, and World’s Edge, the team overseeing the Age of Empires franchise.
Studio Reorganization and Divestitures
Bethesda will take responsibility for Obsidian Entertainment, while King will add Microsoft Casual Games to its operations. Playground Games and Turn 10 Studios are being combined into a single studio focused on the Forza and Fable franchises.
Xbox has also provided updates on previously announced studio exits. Compulsion Games and Double Fine have returned to independent ownership, and Undead Labs has transitioned out of Xbox. Its upcoming game, State of Decay 3, is expected to launch day one on Game Pass under its new publisher.
Ninja Theory and Arkane Face Uncertainty
Ninja Theory is facing a proposed closure after two separate agreements to sell the studio fell through. Xbox said it will begin consultation with employees regarding the proposed closure while continuing to explore other options. Consultations over the future of Arkane are also ongoing and expected to run through the end of the year.
Broader Restructuring Context
Xbox chief content officer Matt Booty said the changes completed since July, including studio divestitures, have taken the company roughly three-quarters of the way through the previously announced restructuring. The latest 268 cuts follow 1,600 Xbox layoffs announced in July. Microsoft has said its restructuring will affect 3,200 roles during its 2027 financial year. Xbox is expected to provide further updates during an October 6 company-wide town hall.
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