Xbox is continuing its studio consolidation efforts with a new wave of layoffs and internal reorganizations affecting several major first-party studios. A total of 268 employees across various Xbox departments have been let go, following a previous reduction of 3,200 employees earlier this year. These changes will lead to significant shifts in how key franchises like Halo, Fallout, Forza, and Fable are developed.
Franchise Realignments
Matt Booty, Xbox's chief content officer, announced that the next installment in the Halo series will be developed by Activision. A new team will lead production on this title, though a smaller contingent of employees at Halo Studios will remain to support the franchise. Activision will continue its work on the Call of Duty franchise.
The studio responsible for Fallout: New Vegas, Obsidian Entertainment, will now operate under Bethesda. Obsidian's ongoing projects, including its upcoming Fallout title, are expected to proceed as planned. Reports indicate that Josh Sawyer, the lead director of New Vegas, will be at the helm of the new Fallout game. Bethesda is also concurrently focused on The Elder Scrolls 6 and has entered pre-production for Fallout 5.
Playground Games and Turn 10 Studios are set to merge into a single entity focused on the Forza and Fable franchises. Microsoft Casual Games will also be integrated into King, uniting leadership in casual game design and live operations.
Broader Studio Changes
Many of these realignments formalize existing behind-the-scenes collaborations, such as Obsidian's partnership with Bethesda on its Fallout game. This follows earlier departures this summer, which included studios like Compulsion Games, Undead Labs, and Double Fine. While those studios retained their intellectual property and back catalogs, an agreement could not be reached with Ninja Theory, the developer behind Devil May Cry. Arkane, known for the Dishonored series, is reportedly still in discussions with Xbox regarding its future.
Xbox plans to hold a company-wide town hall to discuss recent developments and outline its upcoming game lineup, which the company describes as one of its strongest to date.