Microsoft is restructuring its Xbox Game Studios division, a move that reshapes the development landscape for major franchises like Halo and Forza. The changes affect hundreds of employees and alter the future ownership of several well-known game series. Buyers and players should note that some titles will shift publishers or merge development teams, which may impact release schedules and creative direction.
Activision assumes oversight of Halo development while Microsoft cuts 268 roles
The restructuring involves significant staff reductions and studio consolidations across the first-party portfolio. Microsoft is cutting 268 roles, including positions within Halo Studios and Xbox Game Studios management. Activision will assume oversight of Rare and World's Edge, while Bethesda will take responsibility for Obsidian Entertainment. These changes place key studios under the oversight of Activision Blizzard.
The future of each studio depends on its ongoing projects and strategic value. Playground Games and Turn 10 will merge into a single entity responsible for the Forza and Fable franchises. King will absorb Microsoft Casual Games to consolidate mobile development efforts. Compulsion Games and Double Fine returned to management control in August, retaining their intellectual property and funding. Undead Labs has completed its transition and will release State of Decay 3 through a new publisher while maintaining its day-one Game Pass launch.
The most uncertain outcomes involve studios where divestment agreements have failed. Microsoft states that two separate agreements for Ninja Theory fell through, and the company is now consulting employees on a proposed closure. This consultation process is ongoing, and Microsoft continues to examine other options for the studio. Arkane faces a similar situation, with consultation expected to continue through the end of 2026. Meanwhile, a smaller Halo Studios team will remain to support existing games and the community.
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