On September 22, Microsoft announced a new, large-scale reorganization of its Xbox division.
The announcement involves more than just staff reductions; it includes major changes to responsibilities, roles, and organizational structure. This article summarizes the details of the announcement.
Activision to Develop the Next ‘Halo’—Halo Studios to Focus on Support
Among the announcements made this time, the biggest change involves the development structure of the *Halo* series. According to the announcement, Activision will be responsible for developing the next *Halo* title.
A new development team dedicated exclusively to *Halo*—independent of existing *Call of Duty* teams and future development plans—will be established within Activision. A small team will remain at Halo Studios, which has led the series to date, to continue supporting the *Halo* community and currently released games.
In other words, while Halo Studios itself will not disappear immediately, the central role in developing future main series titles will shift to Activision.
Activision’s Scope Expands Significantly—Rare and World’s Edge Also Join the Fold
Activision will not be responsible for *Halo* alone. As part of this reorganization, World’s Edge—which develops the *Age of Empires* series—and Rare, the studio behind *Sea of Thieves*, will also come under Activision’s jurisdiction.
As a result of these changes, Activision will become an organization involved not only with *CoD* but also with several major franchises representing Xbox, including *Halo*, *Sea of Thieves*, and *Age of Empires*.
Obsidian Moves Under Bethesda’s Jurisdiction—Co-Developing a New *Fallout* Title
Obsidian Entertainment will move under Bethesda’s jurisdiction.
While Obsidian will continue to work on ongoing projects such as *Grounded*, it has also been reaffirmed that the studio is co-developing a new *Fallout* project with Bethesda Game Studios.
Obsidian is the studio that previously developed *Fallout: New Vegas*, but no details have been revealed at this time regarding what kind of game this newly announced title will be.
Turn 10 and Playground Games Merge into a Single Studio
Turn 10 Studios, known for the *Forza Motorsport* series, and Playground Games, the developer of *Forza Horizon* and the upcoming *Fable*, will be merged into a single studio.
The two studios have reportedly collaborated on technical, creative, and franchise management aspects for over a decade, and with this reorganization, they will officially operate as a single team. Under the new structure, they plan to focus on the *Forza* and *Fable* series.
Microsoft Casual Games to Join King
Microsoft Casual Games, which develops titles such as *Solitaire*, *Mahjong*, and *Minesweeper*, will be transferred to King. King is a mobile and casual gaming company under Activision Blizzard, known for the *Candy Crush* series.
Microsoft explains that this integration brings together two organizations responsible for the design and live operations of casual games.
268 Job Cuts Across Xbox—Restructuring Not Yet Complete
Along with this organizational change, the company also announced the elimination of 268 positions. This includes first-party studios such as Halo Studios, as well as administrative and central support departments within Xbox Game Studios.
According to Matt Booty, when factoring in studio sales and other measures implemented since July, the previously announced reorganization plan is “about three-quarters” complete. In other words, this announcement does not mark the full completion of the Xbox reorganization, and further changes may occur in the future.
Compulsion, Double Fine, and Undead Labs Are Parting Ways with Xbox
New information has also emerged regarding the sale and spin-off of studios under the Xbox umbrella. In August, Compulsion Games and Double Fine Productions were transferred to their management teams, along with their owned IP, back catalogs, and a certain amount of operating capital. Furthermore, a similar transition has been completed for Undead Labs.
*State of Decay 3* will be released under a new publisher, but there are no changes to the plan for it to be available on Game Pass from day one.
Ninja Theory Faces Possible Closure—Two Sale Negotiations Fall Through
Ninja Theory, known for the *Hellblade* series, finds itself in a more serious situation. According to Microsoft, while two separate acquisition negotiations were underway for the studio, neither came to fruition.
As a result, the company says it has begun discussions with employees regarding the possibility of studio closure while continuing to explore other options. Although a closure has not been officially decided at this time, the future of Ninja Theory remains uncertain.
Discussions Also Ongoing Regarding Arkane
It has also been revealed that discussions are currently underway regarding Arkane.
Discussions are expected to continue through the end of 2026, but no details have been provided regarding the specific options being considered.
From “Halo” to “Fallout” to Studio Sales—A Restructuring That Reshapes Xbox’s Organizational Structure Itself
To summarize this announcement, it is not simply a matter of “268 layoffs,” but rather a restructuring that involves reassigning Xbox-affiliated development studios and franchises to larger organizations such as Activision, Bethesda, and King.
In particular, the fact that Activision will be responsible for the next ‘Halo’ title marks a major shift from the structure centered on 343 Industries—now Halo Studios—which has led the series for many years.On the other hand, there are also moves to strengthen ties between development teams, such as the new *Fallout* project by Obsidian and Bethesda Game Studios, and the merger of Turn 10 and Playground Games.
Behind the scenes, however, studio closures, divestitures, and staff reductions are proceeding, and the possibility of Ninja Theory’s closure has even surfaced. Matt Booty is scheduled to host an Xbox-wide town hall on October 6 to reflect on the reorganization to date and outline the path forward.
It’s still fresh in our minds that Xbox recently partnered with director Hideo Kojima on his new title *PHYSINT*, which was spun off from Sony Interactive Entertainment. What will the future hold?
