Xbox is cutting another 268 jobs as part of its ongoing restructuring, while Activision will take over development of the next Halo game and Ninja Theory faces a potential closure after two proposed deals for the studio fell through.
Xbox Chief Content Officer Matt Booty outlined the sweeping changes in a message sent to Team Xbox employees globally on September 22.
The 268 eliminated roles affect Halo Studios, other Xbox first-party studios, and Xbox Game Studios’ management and central functions.
According to Booty, the changes made since July, including Xbox’s studio divestitures, mean the company is now roughly three-quarters of the way through its previously announced restructuring.
The latest reset also dramatically reorganizes Microsoft’s remaining gaming operations, placing several major Xbox studios under Activision, Bethesda, and King while combining Playground Games and Turn 10 Studios.
Activision Will Develop the Next Halo
One of the biggest changes involves Microsoft’s flagship Halo franchise.
Activision will develop the next Halo game through a new purpose-built development team that Xbox says will operate separately from Call of Duty’s ongoing development and future plans.
A smaller team will remain at Halo Studios to support the Halo community and games currently on the market.
Activision’s responsibilities within Xbox are also expanding beyond Halo. Rare and World’s Edge will now fall under Activision’s remit.
The move represents a substantial change for Halo development, with Activision now directly responsible for building the franchise’s next game.
Xbox has not announced what that next Halo title will be or when it will be released.
Obsidian Moves Under Bethesda
Xbox is also reorganizing Obsidian Entertainment under Bethesda.
Obsidian will continue working on its existing projects, including Grounded, while also developing a new Fallout project in collaboration with Bethesda Game Studios.
No further details about the Fallout project were announced.
Elsewhere, King will expand its responsibilities to include Microsoft Casual Games, bringing Microsoft’s casual gaming operations together with the company behind Candy Crush.
Playground Games and Turn 10 Are Merging
Two of Xbox’s longest-running racing partners are also being formally combined.
Playground Games and Turn 10 Studios will come together as a single studio focused on the Forza and Fable franchises.
The studios have collaborated around the Forza franchise for more than a decade, with Turn 10 traditionally responsible for Forza Motorsport and Playground Games developing Forza Horizon.
Playground is also the developer behind the new Fable.
Under the restructuring, their operations will formally become one team.
Ninja Theory Faces Potential Closure
The future of Ninja Theory, the studio behind Hellblade, has become significantly more uncertain.
Booty confirmed that two separate agreements involving Ninja Theory have fallen through.
Xbox will now begin consultation with employees regarding a proposed closure of the studio, although the company says it will continue exploring other possible paths forward.
Importantly, Ninja Theory has not been confirmed as closed. The consultation concerns a proposed closure, and Xbox’s announcement leaves open the possibility of another outcome.
Xbox also confirmed that consultation surrounding Arkane remains underway and is expected to continue through the end of 2026.
Compulsion, Double Fine and Undead Labs Transition Away From Xbox
Xbox also provided updates on several studios being divested as part of the restructuring.
Compulsion Games and Double Fine Productions returned to their respective management teams in August, taking their intellectual property, back catalogs, and runway funding with them.
Undead Labs has now completed a similar transition.
Despite leaving Microsoft’s first-party studio structure, State of Decay 3 will still launch day one on Xbox Game Pass through Undead Labs’ new publisher.
Xbox Says Its Reset Is Around 75% Complete
The latest changes are part of the broader Xbox restructuring announced earlier this year.
With the actions taken since July and the latest 268 eliminated positions, Booty says Xbox is now roughly three-quarters of the way through the previously announced restructuring.
Xbox employees are scheduled to come together for an all-company town hall on October 6, where Booty said the company will reflect on its progress and discuss its upcoming game lineup.
For now, however, the September 22 announcement represents another major transformation of Microsoft’s gaming business: hundreds more positions are being eliminated, several studios are being reorganized, Ninja Theory faces an uncertain future, and development of Xbox’s flagship Halo franchise is moving to a new Activision team.
