Microsoft's Xbox business is undergoing a substantial "reset" with a wave of restructuring initiatives aimed at future success. These changes include further layoffs, the potential closure of a studio, and a significant shift in the management of the Halo franchise. The announcements come as Xbox aims to streamline its operations and adapt to evolving market conditions.
Layoffs and Studio Restructuring
Xbox boss Matt Booty confirmed that 268 additional layoffs will affect employees across Halo Studios, other first-party developers, and Xbox Game Studios management and central functions. This latest round of cuts follows a previous layoff of 1,600 Xbox developers in July. According to Booty, these measures represent about three-quarters of the planned restructuring for the Xbox division, suggesting more changes may be forthcoming. "I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them," Booty stated.
Halo Franchise Moves to Activision
A notable change is the expansion of Activision's responsibilities, which will now encompass oversight of developers Rare and World's Edge. Furthermore, a new, specialized team within Activision will be tasked with developing the next installment of the Halo game series. This initiative is distinct from Activision's ongoing development of annual Call of Duty titles. Moving forward, Halo Studios will operate with a significantly reduced team focused solely on supporting the existing Halo community and in-market games. Booty characterized this as a continuation of Xbox's "reset."
Bethesda and King Expand Influence
Bethesda is also expanding its scope, now including Obsidian under its purview. Projects currently in development at Obsidian, such as Grounded and a new Fallout game, will continue as planned, with the Fallout title being produced alongside Bethesda Game Studios. Meanwhile, King, the developer behind the popular Candy Crush franchise, will assume responsibility for Microsoft Casual Games. This consolidation aims to unite two leading entities in casual game design and live operations.
Forza and Fable Studios Merge
Playground Games and Turn 10 Studios, both responsible for the Forza franchise, are merging into a single entity. This unified studio will focus on both the Forza and Fable franchises. "These two studios have been creative and franchise partners for over a decade, and today’s changes will formally move their work into one team," Booty explained.
State of Decay 3 and Ninja Theory
Undead Labs, the developer behind State of Decay 3, has reportedly found a new publisher, and the game is slated for release on Xbox Game Pass on its launch day. The identity of this new publisher has not yet been revealed. In a separate development, two prior agreements for the sale of UK-based developer Ninja Theory have fallen through. Microsoft has initiated a UK-specific consultation period regarding the potential closure of the studio. However, efforts to preserve Ninja Theory in some capacity are reportedly ongoing, with Microsoft exploring alternative solutions.
Arkane Lyon Under Consultation
Arkane Lyon, the French studio behind the Dishonored series, remains under consultation in accordance with French labor laws. This process is anticipated to conclude by the end of the year, though the future outcome for the studio is currently unknown.
Future Updates
An internal town hall is scheduled for October 6, where Xbox leadership will reportedly review progress. Xbox CEO Asha Sharma, who recently took over from Phil Spencer, has been implementing significant changes, including adjustments to Xbox Game Pass pricing and the exclusivity of major titles. Sharma has outlined a strategy to "reset" Xbox, which has involved substantial layoffs, game cancellations, and studio closures.