Xbox’s ongoing “reset” has entered another consequential phase: 268 jobs are being cut across Halo Studios, other first-party development teams, and Xbox Game Studios management and central functions. The restructuring also redraws the company’s internal studio map, with Activision set to form the team making the next Halo game.
For players, the most immediate headline is not that Halo is disappearing. It is that the franchise’s next chapter will be made through a newly formed Activision team, while a reduced Halo Studios group remains in place to support the existing games and community. That is a meaningful change in who carries the series forward, and it arrives alongside difficult uncertainty for several teams that have contributed to Xbox’s modern catalog.
What Xbox has confirmed in this round of restructuring
The 268 affected positions are part of a broader program Xbox outlined in July. At that point, the company cut 1,600 jobs and said a further 1,600 roles would be removed over the following year in pursuit of greater efficiency and higher profit margins. Xbox executive vice president and chief content officer Matt Booty said the actions taken since July, including studio divestitures, have brought the organization to roughly three-quarters of the previously announced restructuring.
“Divestiture” is corporate shorthand for transferring a business or asset outside the company, whether through a sale or another separation. It does not mean every studio is experiencing the same outcome. Some teams are becoming independent with funding and intellectual-property rights; others are being moved beneath different internal organizations; and some are facing possible closure.
The present cuts affect Halo Studios and additional first-party developers, plus Xbox Game Studios’ management and central teams. “First-party” refers to studios owned by the platform holder. In this case, it means teams under Microsoft’s Xbox organization rather than outside publishers and independent developers that may release games on Xbox platforms.
Halo’s next game moves under Activision
Halo Studios is not being shut down outright. A smaller group will continue supporting the Halo community and games already on the market. That distinction matters: live games require ongoing operational work after release, including community support and other continued maintenance. It also means the studio’s continuing role is focused on the franchise as it exists now, rather than necessarily serving as the principal developer for its next major installment.
The next Halo game will instead be developed by a new team being established under Activision. Xbox has not provided a title, release window, platform list, gameplay direction, or named development leadership for that project in the supplied information. Fans should therefore separate the confirmed organizational news from the many questions that remain unanswered about the game itself.
Activision’s expanded responsibilities do not stop at Halo. It is also taking oversight of Rare and World’s Edge, the developer associated with Age of Empires. In organizational terms, “overseeing” a studio can encompass operational planning, portfolio decisions, and executive support, but the information available does not specify how day-to-day creative responsibilities will change at either team.
Related coverage includes Xbox Cuts 268 Jobs as Activision Takes Lead on Next Halo Game.
The practical implication is clear enough: Xbox is concentrating responsibility for several major brands under fewer umbrellas. Whether that produces smoother coordination or creates new complications will depend on decisions that have not been detailed publicly, including staffing, leadership structure, development timelines, and the degree of creative autonomy retained by each studio.
More teams are moving, merging or becoming independent
Several other Xbox studios are being reassigned as part of the reset. Obsidian is moving under Bethesda’s umbrella. That is especially notable because Obsidian was recently tasked with making a new Fallout game, placing the developer within the same broader structure as the franchise’s established Bethesda connection.
King will oversee Microsoft Casual Games. Meanwhile, Playground and Turn 10 are merging, with the combined operation continuing to focus on Forza and Fable. A merger does not, by itself, tell players how individual projects will be staffed or managed, but it confirms that Xbox is bringing two of its best-known racing and role-playing development operations closer together.
For anyone trying to read a release schedule from this news, restraint is warranted. A studio merger and a change in reporting structure are business decisions, not release-date announcements. There is no supplied evidence that the next Halo, Fallout, Forza, or Fable has changed schedule, scope, or platform plans. The signal is structural: Xbox is altering which groups are accountable for those properties.
Elsewhere, Compulsion Games and Double Fine Productions have been spun out as independent studios. They will receive runway funding and retain rights to their intellectual property and back catalogs. “Runway funding” generally means money intended to give a newly independent business time to operate while it establishes its next steps, rather than requiring it to become self-sustaining immediately. The terms beyond that broad description were not disclosed.
Retaining intellectual property, often abbreviated as IP, is also consequential. IP covers the creative assets and rights connected to games and brands. In practical terms, the stated arrangement means Compulsion and Double Fine keep control of their own named properties and prior catalogs as they transition away from Xbox ownership.
Microsoft has also divested Undead Labs. Even so, State of Decay 3 is still planned for Game Pass, though it will be published by a new publisher. Game Pass is Xbox’s subscription service, and the confirmation means the game’s presence there remains part of the plan despite the studio’s change in ownership. It does not establish additional details on timing or the identity of that publisher.
Ninja Theory faces a proposed closure
The bleakest part of the update concerns Ninja Theory. Two separate agreements to sell the studio collapsed, leaving it at risk of closure. Xbox has begun consultation with employees on a proposed shutdown while saying it is continuing to explore other possible paths.
That wording is important. A proposed closure is not identical to a completed closure, and the statement leaves open the possibility that another route could yet be found. But it is also not a routine organizational shuffle. Consultation is a formal process of engaging affected employees about the proposal; it indicates that the studio’s future is under active consideration rather than settled as a continuing Xbox operation.
For workers, this is the human cost behind terms such as consolidation and efficiency. Studio structures, franchise oversight, and publishing labels are the visible map of an industry reorganization. Jobs, teams, and the continuity of specialized development experience are what that map represents in practice.
Arkane Studios enters a consultation process in France
Xbox is also seeking to divest its Lyon-based Arkane Studios. Because the studio is in France, the company is required to enter a consultation period to consider alternatives including a sale, a spinout, or closure. That process is expected to continue through the end of 2026.
The legal context here makes Arkane’s situation different from an immediate announcement that a studio has been sold or closed. The consultation period is intended to examine options, so the eventual result has not been determined. It could lead to a transfer outside Xbox, independence, or a shutdown; none should be presented as final before the process is completed.
This distinction is worth keeping in mind across the entire reset. “Independent,” “divested,” “merged,” “under oversight,” “proposed closure,” and “consultation” may all sound like variations on corporate language, but they describe very different outcomes. Compulsion and Double Fine have a stated independent path with funding and IP rights. Undead Labs has already been divested, with State of Decay 3 retaining its Game Pass plan. Ninja Theory is in a proposed-closure consultation after attempted sales failed. Arkane is still in a legally required process that will evaluate several possible futures.
What players can reasonably take from the reset
Xbox has confirmed a large organizational reordering, but it has not supplied a matching slate of game-specific production details. The firmest player-facing commitments in this update are that a new Activision team is making the next Halo, a smaller Halo Studios group will support the current Halo ecosystem, and State of Decay 3 remains headed to Game Pass through a new publisher.
Everything else should be assessed at the appropriate level of certainty. Obsidian’s move beneath Bethesda does not reveal the design or release schedule of its new Fallout project. The Playground and Turn 10 merger does not reveal when the next Forza or Fable will arrive. Activision’s new Halo mandate confirms responsibility, not a feature list. And the status of Ninja Theory and Arkane remains unresolved while their respective processes continue.
Xbox’s reset is therefore more than a single layoff notice and less than a full roadmap for the future. It is a major redistribution of people, oversight, and ownership across some of the company’s most recognizable studios and series. The next test will be whether the new structure provides the stability and clarity its remaining teams need—without losing more of the talent and creative identity that gave those teams value in the first place.
For a look at another game heading to PC around this period, see Furyball: Rogue Revenge’s Steam Early Access plans.
