Xbox has announced a further round of layoffs and business restructuring, significantly altering the landscape of its internal studios. Following an initial reduction of 20% of its organization earlier in the year, Xbox revealed on September 22nd that an additional 268 jobs were being cut as part of an ongoing effort to streamline publishing efforts. This consolidation sees major shifts in responsibility, with Activision and Bethesda emerging as primary publishers for Xbox.
Activision Takes Center Stage
Activision, largely untouched by previous layoffs, is now absorbing World's Edge and Rare into its operations. Crucially, Activision will also become the new primary home for the Halo franchise. Halo Studios has reportedly been reduced to a small support team, with Activision set to develop the series' next installment. This move signifies Activision's increasing importance within Xbox's strategy.
Blizzard and King Remain Key
Blizzard Entertainment has also avoided major layoffs, likely due to its robust upcoming release schedule, including new titles in the World of Warcraft, Diablo, and Starcraft franchises. Similarly, King, the developer of Candy Crush, continues to operate under new leadership and will now oversee Microsoft Casual Games, managing titles like Solitaire and Mahjong. This suggests a focus on expanding Xbox's casual and mobile offerings.
Bethesda's Evolving Role
Bethesda Game Studios experienced significant impact earlier in the year with layoffs affecting studios like Id Software and ZeniMax Online. While Xbox is still attempting to find a buyer for Arkane Studios, Bethesda is poised to take on more responsibility. Obsidian Entertainment, which also faced cuts, will now fall under Bethesda's purview. This integration is particularly noteworthy as Obsidian is confirmed to be developing the next Fallout game, while Bethesda itself focuses on the highly anticipated Elder Scrolls 6.
Halo Studios and The Coalition Restructured
The September layoffs heavily impacted Halo Studios, with a significant portion of the 268 cuts originating from this team. The studio, which recently released Halo: Campaign Evolved, appears to be shifting towards a support role for Activision's future Halo development. The Coalition, developer of the Gears of War series, remains operational and is nearing the release of Gears of War: E-Day. Its future, however, may depend on the success of this title, and there's speculation it could eventually be moved under Activision's umbrella.
Mojang Studios, Playground, and Turn 10 Consolidate
Mojang Studios, the developer behind Minecraft, appears to be in a stable position, also reporting directly to Asha Sharma. While specific layoff numbers for Mojang are unclear, its flagship title and upcoming releases like Minecraft Dungeons 2 suggest continued importance. Xbox is consolidating its racing franchises by bringing Playground Games and Turn 10 Studios together. Both studios have faced challenges, with Turn 10 significantly impacted by earlier layoffs, highlighting the strategic focus on the Forza brand.
Rare and inXile Entertainment's Uncertain Futures
Rare is transitioning to operate under Activision. Following the cancellation of Everwild and prior layoffs, the studio's future projects beyond Sea of Thieves are uncertain. The possibility of reviving dormant IPs like Banjo-Kazooie remains speculative. inXile Entertainment faces a critical juncture with its upcoming title, Clockwork Revolution, positioned as a major 2027 release. Given Xbox's current risk-averse strategy, the success of this new IP will likely be pivotal for the studio's continued existence within the shrinking Xbox Game Studios framework.
With Xbox stating that restructuring is only about three-quarters complete, the company is set to look markedly different heading into next year, emphasizing consolidation and a renewed focus on key established franchises and publishers.