After rumors that another round of layoffs would be announced at XBOX and that the future of the Halo franchise would be under Activision, XBOX has more than confirmed these reports.
The second set of layoffs just this year will see hundreds of employees affected, along with multiple studios being reorganized, not just Halo moving to Activision. Resultingly, staff at Halo Studios have been let go, with just a skeleton crew left to assist with games in-market.
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Up until now, the studio restructuring process was speculation, and with XBOX CEO Asha Sharma previously emphasizing the importance of the growth of XBOX’s established brands, such as The Elder Scrolls and Minecraft, nobody knew how the shuffle of studios would truly shape out.
All Studios Impacted by XBOX Restructuring
Chief Content Officer at XBOX, Matt Booty, announced that 268 roles across Halo Studios are being eliminated, as well as redundancies happening across other first-party studios, and the XBOX Game Studios management and central functions layer.
Studio reorganizations are also coming into effect. It has been officially revealed that Activision will develop the next entry in the Halo franchise, led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty, while a small team at Halo Studios will continue supporting the Halo community already released titles.
Activision will expand its remit to World’s Edge, best known for the Age of Empires series, as well as Rare, the studio behind Sea of Thieves.
Bethesda is also taking Obsidian under its wing, which will continue its current projects, including Grounded, along with a new Fallout project made in collaboration with Bethesda Game Studios.
268 roles across Halo Studios are being eliminated, as well as redundancies happening across other first-party studios
Playground and Turn 10 will come together as one studio focused on the Forza and Fable franchises, which may be the least surprising move, as these studios have been creative and franchise partners for over ten years. Forza Horizon 6 was developed by Playground Games, with assistance from Turn 10, for example. This period of restructuring means these studios will formally move their work into one team.
Regarding King, known for its mobile games, it will expand its remit to include Microsoft Casual Games.
In July, Sharma announced the difficult decision to reduce the team by approximately 3,200 throughout FY27, along with four studios departing from XBOX. Here, it was revealed that XBOX is operating at margins that are 3–10x lower than its competitors, while facing difficulties with a smaller install base and a higher cost structure entering Gen 9.
An update has been provided by Booty on the future of these studios since their split from XBOX.
In August, Compulsion and Double Fine returned to management with their IP, back catalogs, and runway funding. Undead Labs has moved on under similar terms, backed by a new publisher, and will release State of Decay 3 day one on Game Pass.
It has been revealed that two separate agreements for Ninja Theory fell through, meaning consultation with employees on a proposed closure will begin while alternative paths continue to be explored. Consultation with Arkane continues and is expected to stay that way through the end of the year.
According to Booty, “the actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring.”
Does this mean that more layoffs are on the way at XBOX? Only time will tell, but the company is certainly not out of the woods just yet.
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