XBOX’s “Reset” Reshuffles Its Studio Lineup as Halo Moves to Activision

XBOX cuts another 268 roles while moving Halo, Rare, and World’s Edge under Activision, bringing Obsidian under Bethesda, and merging Playground Games with Turn 10.

XBOX's ongoing reset has reached a new stage, with changes that go beyond just layoffs. Microsoft is cutting 268 more jobs across Halo Studios, other first-party studios, and XBOX Game Studios management. Beyond the job cuts, XBOX is changing how it manages some of its biggest studios and franchises.

Activision will now oversee Halo, Rare, and World's Edge. Bethesda will take on Obsidian, and Playground Games and Turn 10 will merge into one studio focused on Forza and Fable. XBOX chief content officer Matt Booty explained these changes in a staff memo.

He said that since July, including selling some studios, XBOX is now about three-quarters finished with its planned restructuring. Halo is moving under Activision. The biggest surprise is Halo. XBOX confirmed that Activision will develop the next Halo game with a new team created for this purpose. This team will work separately from Activision’s Call of Duty projects.

At the same time, Halo Studios will become a smaller group focused on supporting current Halo games and the community. This means the studio once called 343 Industries will not lead the next main Halo game. This is a big change for one of XBOX's most important franchises.

Halo has been tied to XBOX since the beginning, so giving the next main game to a new Activision team marks a new direction for the series. XBOX has not shared who is on the new team or any release details for the next Halo yet. Rare and World's Edge also move to Activision. Activision’s new role goes beyond just Halo.

XBOX also confirmed that Rare and World's Edge will now report to Activision.

Rare is known for Sea of Thieves, and World’s Edge manages the Age of Empires series. This is an internal change, not a sale. Both studios are still part of Microsoft, but Activision will now manage their operations within the new XBOX structure. This gives Activision a bigger role in XBOX's first-party games, expanding its responsibilities beyond its usual franchises. Obsidian is joining Bethesda.

Obsidian Entertainment is also seeing a major change. XBOX says Bethesda will now oversee Obsidian, but Obsidian will keep working on its current projects. This includes Grounded and a new Fallout game being developed with Bethesda Game Studios. This move makes sense because of Obsidian’s history with the Fallout series.

Obsidian made Fallout: New Vegas, while Bethesda Game Studios has managed the main series since Bethesda took over. XBOX has not shared more details about the new Fallout project, so it is too soon to know when it will come out or what it will include.

Playground Games and Turn 10 are becoming one studio; the restructuring also combines two teams that have worked together for years. Playground Games and Turn 10 Studios will merge into one studio focused on the Forza and Fable series. XBOX says these two studios have worked together for over ten years. Now, their work will officially be under one team instead of staying separate.

Playground Games has been making Fable, and Turn 10 has handled Forza Motorsport.

XBOX has not said that either series will be canceled or dropped because of the merger. King takes over Microsoft Casual Games. Another organizational change, which has gotten less attention, is also part of the reset. King will now oversee Microsoft Casual Games, bringing both groups together under one organization. XBOX called both teams global leaders in casual game design and live operations.

This move brings Microsoft’s casual gaming operations closer to King, the Activision Blizzard studio known for Candy Crush. Ninja Theory’s future is still uncertain. Not every studio knows what will happen next. XBOX said that two attempts to sell Ninja Theory did not work out.

Now, the company is starting talks with employees about possibly closing the studio, but is still looking at other options. Ninja Theory is not officially closed. The studio's future depends on the consultation process and any other solutions XBOX may find. Ninja Theory is best known for the Hellblade series, so this uncertainty matters especially to fans. Arkane's future remains undecided.

Arkane is also still going through a consultation process. XBOX says the consultation will likely last until the end of the year, so the studio has not yet made a final decision. So, while some parts of XBOX's restructuring are finished, the future of some studios is still unclear.

Undead Labs has already gone independent.

Meanwhile, Undead Labs has left XBOX and become independent, similar to what happened with Compulsion Games and Double Fine earlier. XBOX says Undead Labs will work with a new publisher and will release State of Decay 3 on Game Pass from day one. 

Compulsion Games and Double Fine became independent again in August, keeping their intellectual property, back catalogs, and funding. This shows XBOX’s restructuring isn't just about merging studios. Some teams are joining together, while others are leaving Microsoft completely.

XBOX says the reset is three-quarters complete. The latest 268 job cuts are part of the bigger restructuring XBOX started earlier this year. Booty says that with the studio sales and changes since July, XBOX is now about three-quarters of the way through its planned restructuring.

XBOX says the goal is to operate with fewer business units. XBOX says it aims to have fewer business units, bring together teams that already work closely, and use its publishing skills more effectively. Activision is gaining responsibility for several major franchises, Bethesda is taking on Obsidian, Playground and Turn 10 are being unified, and King is absorbing Microsoft Casual Games. A very different XBOX studio structure.

Taken together, these changes represent one of the biggest reorganizations of XBOX's first-party studios in recent years. XBOX's Edge is moving under Activision's remit, Obsidian is joining Bethesda, and Playground Games and Turn 10 are becoming one studio.

At the same time, Undead Labs is now independent, but Ninja Theory and Arkane still do not know what their futures hold. XBOX says it wants a simpler structure to strengthen its biggest franchises and help teams work more closely. But for the studios and employees involved, this phase of the reset is another big change in an already changing XBOX organization. Since the restructuring is not finished yet, there could be more changes before XBOX says its reset is done.