Microsoft has confirmed another major stage of its Xbox restructure, cutting 268 roles and reorganising some of the biggest studios and franchises in its gaming operation.
The latest changes affect Halo Studios, other first-party teams, Xbox Game Studios management and central functions. Microsoft says the moves completed since July, including studio divestitures, mean it is now roughly three-quarters of the way through its previously announced restructuring programme.
Activision is developing the next Halo
The headline move is that Activision will develop the next Halo title, a major change for one of Xbox’s longest-running franchises.
Microsoft says a new, purpose-built team inside Activision will lead the project and will operate separately from the teams working on Call of Duty. A smaller Halo Studios team will remain in place to support the existing Halo community and games already on the market.
Halo has been one of Xbox’s defining franchises for more than two decades. Moving the next Halo title to a purpose-built Activision team shows just how far Microsoft is willing to reorganise its studios around individual franchises.
Activision’s remit is also expanding to include Rare and World’s Edge, bringing the studios behind Sea of Thieves and Age of Empires into the same broader publishing organisation.
Obsidian moves under Bethesda
Another major change brings Obsidian Entertainment into Bethesda’s remit. Obsidian will continue its current projects, including Grounded, while also working on a new Fallout project in collaboration with Bethesda Game Studios.
The Fallout link is notable because Obsidian previously developed Fallout: New Vegas. With Bethesda and Obsidian now sitting more closely together inside Xbox, the restructure gives the two teams a more direct organisational link around the franchise.
Playground Games and Turn 10 become one studio
Playground Games and Turn 10 Studios will also be brought together as a single studio focused on the Forza and Fable franchises.
The two teams have worked closely for years through the wider Forza franchise, but until now they have remained separate studios. Playground is best known for Forza Horizon and is also developing Fable, while Turn 10 has traditionally led the Forza Motorsport series.
Microsoft says the move formalises a partnership that has existed for more than a decade. What it means for the long-term shape of the individual Forza series remains to be seen, but both Forza and Fable are explicitly named as priorities for the combined team.
King takes on Microsoft Casual Games
King will expand its remit to include Microsoft Casual Games, bringing Microsoft’s long-running casual titles into the same organisation as one of the biggest mobile and live-service publishers in the world.
The change is less visible to console players, but it fits Microsoft’s wider push to reach audiences beyond the traditional Xbox hardware ecosystem.
Ninja Theory faces possible closure
The most serious update concerns UK developer Ninja Theory. Microsoft says two separate agreements intended to move the studio into new ownership have fallen through.
Consultation with employees will now begin over a proposed closure, although Microsoft says it is continuing to explore other possible routes forward. That distinction matters: Ninja Theory has not yet been confirmed as closed, but the studio’s future is clearly uncertain.
Ninja Theory is responsible for games including Hellblade: Senua’s Sacrifice, Senua’s Saga: Hellblade II, DmC: Devil May Cry and Enslaved: Odyssey to the West. Microsoft acquired the Cambridge-based developer in 2018.
Consultation around Arkane is also continuing and is expected to run until the end of the year.
Some Xbox studios are becoming independent again
The restructuring is not simply about closing teams or absorbing them into larger groups. Compulsion Games and Double Fine returned to their management teams in August, becoming independent studios with their intellectual property, back catalogues and runway funding.
Undead Labs has now completed a similar transition. State of Decay 3 is still planned for a day-one Game Pass release through a new publishing arrangement.
So what is Xbox becoming?
Taken together, the changes point to a broader shift in how Xbox is being organised. Microsoft’s announcement is focused on restructuring the teams around its major franchises rather than cancelling those franchises. Halo, Forza, Fable, Fallout, Sea of Thieves and Age of Empires all remain part of the wider Xbox portfolio.
What is changing is the structure around them. Xbox is moving toward fewer business units, larger publishing groups and closer alignment between studios that Microsoft believes should be working together.
The result is an Xbox operation increasingly organised around Activision, Bethesda, King and a smaller number of consolidated development groups rather than a sprawling collection of largely separate studios.
The WildStar view
There are combinations here that could change how some of Xbox’s biggest franchises are developed. Obsidian working more closely with Bethesda on Fallout is an obvious example, while bringing Playground and Turn 10 together could reduce duplication across Forza and give the wider franchise a clearer direction.
But the potential upside cannot be separated from the human cost. Another 268 roles are being eliminated, only a small Halo Studios team will remain to support the existing Halo community and games already on the market, and Ninja Theory now faces a proposed closure after attempts to find new ownership failed.
The Activision and Halo move is likely to become the symbol of this entire restructure. Halo helped define Xbox in the first place. Seeing its next major game move to a purpose-built Activision team shows just how willing Microsoft is to break with the old structure.
After years of acquisitions, expansion and internal change, the next phase will ultimately be judged by players on the games that emerge from this new structure, and on whether Microsoft can deliver them more consistently.
Source: Xbox Wire – Continuing Our Reset