Microsoft is making another major change to its gaming division. As part of the previously announced Xbox reset, 268 jobs are being eliminated, while several well-known Xbox studios are being moved under different parts of the company.
The biggest change concerns Halo. Activision will take responsibility for the development of the next major Halo game. A new team will be created specifically for Halo, separate from Activision's existing Call of Duty development teams.
Halo Studios will not disappear completely. A smaller team will continue supporting existing Halo games and the wider Halo community. Development of the next major game, however, will move to the new Activision-led team.
Rare and World's Edge move under Activision
The restructuring goes far beyond Halo. Rare and World's Edge will also move under Activision's wider responsibilities.
This brings franchises such as Sea of Thieves and Age of Empires into the same part of Microsoft's gaming organization as major Activision franchises such as Call of Duty.
Microsoft says the changes are intended to reduce the number of separate business units and bring teams that already work closely together into the same organizational structure.
Obsidian moves closer to Bethesda
Obsidian Entertainment is also getting a new position within Microsoft's gaming organization. The studio will be aligned more closely with Bethesda.
Obsidian will continue working on its existing projects while also working alongside Bethesda Game Studios on a new Fallout project.
Turn 10 and Playground Games become one studio
Another major change involves Forza and Fable. Turn 10 Studios and Playground Games will be combined into a single studio.
The two teams have already worked closely together on Microsoft's racing and role-playing franchises. Microsoft now wants to bring their development under one studio structure focused on the future of Forza and Fable.
King gets a bigger role
King, the developer behind franchises such as Candy Crush, will also take on additional responsibilities. King will oversee Microsoft's casual games business, bringing more of Microsoft's casual gaming activities under the company's management.
Ninja Theory faces an uncertain future
The restructuring also affects several studios that Microsoft previously planned to move outside the company.
Compulsion Games, Double Fine and Undead Labs have now moved to new management. The situation at Ninja Theory, however, is much less certain.
Microsoft has reportedly been unable to find a buyer for Ninja Theory after two attempts to sell the studio failed. The company has now entered discussions with employees about a possible closure.
The future of Arkane is also still being discussed, with Microsoft exploring strategic options for the studio.
Xbox cuts hundreds more jobs
The 268 new job cuts come on top of the major layoffs announced by Microsoft earlier this year. In July, Xbox said its broader restructuring plan would affect approximately 3,200 roles during its 2027 financial year.
According to Xbox, the restructuring is now around three-quarters complete. The latest 268 job cuts affect Halo Studios, other first-party studios, management and parts of the wider Xbox organization.
The July restructuring had already eliminated around 1,600 positions and led to several studios being sold, spun off or moved toward independence. The latest changes represent another phase of the same major Xbox restructuring.
A major change for Halo and Xbox
For players, the change surrounding Halo is perhaps the most noticeable. The franchise has been closely associated with Xbox for decades and has traditionally been developed internally by Microsoft's Halo teams.
Now, Activision will lead development of the next major Halo game. Microsoft has made clear that it is not simply handing Halo to an existing Call of Duty team. Instead, a new team specifically dedicated to Halo will be assembled.
At the same time, Microsoft is reducing the number of separate studio organizations across Xbox. Rare, World's Edge, Obsidian, Turn 10 and Playground Games will all have new organizational structures, while other studios have moved toward independence or could potentially close.
Microsoft says the changes are designed to streamline development, reduce the number of separate business units and concentrate resources on its biggest franchises and projects.
The Xbox reset is therefore still ongoing, with Microsoft expecting to complete the remaining changes over the coming period.
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