Xbox has announced further significant restructuring, including the consolidation of several studios and an additional 268 layoffs, as part of a larger plan to cut approximately 3200 jobs within the year. Under the new structure, the Halo franchise will be managed by Activision, with Halo Studios being reduced to a support role. Rare and Age of Empires developer World's Edge will also fall under the Activision banner, while Obsidian will integrate with Bethesda. Turn 10 and Playground Games are merging, and Ninja Theory is entering a consultation period.
Industry analysts view these developments with a mixture of concern and a lack of surprise. Joost van Dreunen, a professor at NYU Stern and author of SuperJoost Playlist, characterized the situation as a “reverse acquisition in slow motion,” where publishers acquired by Xbox are now absorbing its internally developed studios. Rhys Elliot, head of market analysis at Alinea Analytics, and James McWhirter, senior analyst at Omdia, pointed to an identity crisis within Xbox, suggesting the company is struggling to balance its role as a console platform holder with its expansion into multiplatform publishing.
McWhirter noted that while Game Pass aimed to broaden the audience, it may have diverted spending from direct purchases to subscription revenue, impacting the performance of first-party titles due to conflicting objectives. However, some analysts see strategic logic in the consolidation of smaller studios with larger ones in similar genres. Manu Rosier, director of market intelligence at Newzoo, highlighted that Activision leads shooters, Bethesda leads RPGs, King leads casual, and Playground leads racing. This approach aims to create unified leadership per genre, preventing internal competition for players and optimizing release schedules.
Newzoo data indicates that players of Obsidian's Avowed and The Outer Worlds 2 were more likely to also play Bethesda titles like Starfield or The Elder Scrolls IV: Oblivion Remastered. The concurrent launch of Avowed and The Elder Scrolls IV: Oblivion Remastered in 2025, just two months apart, exemplifies the issue of internal competition. In a competitive market, consolidating resources under experienced teams is seen as a sensible strategy, mirroring similar moves by Ubisoft and Electronic Arts.
The shift of Halo under Activision is particularly noteworthy. Van Dreunen described it as Activision absorbing Xbox rather than the other way around, with Halo, Rare, and World's Edge now reporting to Rob Kostich, head of Activision. This move signifies an end to Xbox's fifteen-year experiment with in-house Halo stewardship, betting on Activision's established publishing machine to manage the franchise. Rosier suggested that Halo and Call of Duty could potentially alternate release years, easing the pressure on Call of Duty's annual cycle and potentially capturing different player bases, as fewer than 3% of Call of Duty players also engage with Halo Infinite.
However, the placement of Rare and World's Edge under Activision is viewed as less clear-cut. Rosier questioned the genre logic, as Sea of Thieves and Age of Empires do not align with Activision's shooter focus. Elliot expressed less optimism, calling the move a "demotion" for Halo, a franchise historically central to Xbox's identity. He suggested the consolidation is driven by publishing power rather than creative synergy.
Regarding Ninja Theory, the situation remains obscure following the collapse of two potential sale agreements. Rosier speculated that investors might be hesitant about single-player games with niche audiences. Van Dreunen called the Ninja Theory situation the "most troubling item," suggesting that the acquisition spree of 2018 brought in talent that is difficult and expensive to manage. He views this as a costly lesson for Xbox and its peers.
Dr. Serkan Toto of Kantan Games expressed no surprise at the developments, having predicted aggressive restructuring under Xbox leadership. Toto voiced concerns that studios could lose their identity through mergers and that the reorganization might facilitate the sale or disbandment of studios if the restructuring fails. "Success is not guaranteed," Toto stated, warning of potential further difficulties if "Project Helix" does not succeed.