Xbox is restructuring: Activision takes responsibility for 'Halo', 'Age of Empires', and Rare
Microsoft continues to radically restructure its Xbox studios. The arguably biggest change: "Halo" will be developed by "Call of Duty" maker Activision in the future.
Back in July, Microsoft announced "the most significant restructuring in the history of Xbox." Under the banner of the "great Xbox reset," new Xbox head Asha Sharma presented far-reaching changes for Microsoft's struggling gaming division. Among other things, 1,600 jobs were cut – with another 1,600 to follow by July 2027.
In an official statement, Matt Booty, Chief Content Officer at Xbox, reveals what the second step of the reset looks like.
Activision gains power
In total, Microsoft is cutting another 268 jobs. The hardest hit are the Halo Studios (formerly known as 343 Industries). The team is effectively being hollowed out by the layoffs – what remains are a few employees who will support existing "Halo" titles.
The next "Halo" will be developed by Activision. According to Booty, a new, specially assembled team will be responsible for this, working independently of "Call of Duty" development. In the future, Activision will also take over the management of game development at World’s Edge ("Age of Empires") and Rare ("Sea of Thieves").
Microsoft is also merging Playground Games ("Forza Horizon", "Fable") and Turn 10 ("Forza Motorsport"). Together, the new, as-yet-unnamed studio is intended to drive both the "Forza" and "Fable" franchises forward.
Booty further writes that the RPG experts at Obsidian ("The Outer Worlds", "Avowed") will work under the leadership of Bethesda in the future. Just in July, the studios announced a new collaborative project in the "Fallout" universe. Mobile giant King ("Candy Crush") is also taking over the management of Microsoft Casual Games ("Minesweeper", "Solitaire").
These studios are gone
Booty also reveals the status of the studios that are no longer part of Microsoft as part of the "great Xbox reset." Compulsion Games ("South of Midnight") and Double Fine ("Psychonauts") were successfully spun off into independence in August – including their brand rights, game catalogs, and seed funding.
Undead Labs has also since completed a similar transition and will publish "State of Decay 3" with a new publisher. Booty does not reveal who that is. The game is still expected to appear on Game Pass.
The future looks bleak for Ninja Theory ("Hellblade"). Two separate negotiations regarding the future of the studio with external partners have failed. Booty writes: "We will now initiate consultations with employees regarding a possible closure while simultaneously exploring further options."
It is also unclear what will happen with Arkane. Discussions with the studio are to be continued until the end of the year. The French company is currently working on "Marvel's Blade".
A look into the future
According to Booty, these measures mean that about three-quarters of the planned "restructuring" (i.e., layoffs) have been implemented. The rest is to be handled by the end of the fiscal year (July 2027).
"I am deeply grateful to our colleagues for what they have built, and I know how difficult today will be for those leaving the company and for the teams around them."
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