Activision is taking over Halo as part of a massive Xbox shake-up

Turn 10 Studios and Playground Games are also merging into a single studio , focused on the future of Forza Horizon and Fable . Microsoft is also moving its casual games unit, responsible for Solitaire , Mahjong , and Minesweeper , from Bethesda to King.

This is the second round of Xbox layoffs this year, but it might not be the last. Microsoft has already said that 3,200 roles are set to be impacted by Xbox cuts over the course of Microsoft’s 2027 financial year (which ends in June 2027). Today’s cuts bring the number up to nearly 1,900 in total, leaving more than 1,000 roles still yet to be announced. Microsoft now says it’s “roughly three-quarters of the way through previously announced restructuring.”

Team, I’m writing to share several updates as part of the XBOX reset outlined earlier this year. First, we are eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer. The actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring. 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. Second, we are reorganizing our studios. The goal is to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise. Activision will expand its remit to World’s Edge, as well as Rare. Activision will also be developing the next Halo title, led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty . A small team at Halo Studios will continue supporting the Halo community and games in-market. Bethesda will expand its remit to include Obsidian, which will continue its current projects, including Grounded, as well as the new Fallout project made in collaboration with Bethesda Game Studios. King will expand its remit to include Microsoft Casual Games, uniting our two global leaders in casual game design and live operations. Playground and Turn 10 will come together as one studio focused on the Forza and Fable franchises. These two studios have been technological, creative, and franchise partners for over a decade, and today’s changes will formally move their work into one team. Third, an update on our studio divestitures: In August, Compulsion and Double Fine returned to management with their IP, back catalogs, and runway funding. Undead Labs has now successfully transitioned on similar terms and, with a new publisher, will release State of Decay 3 day one on Game Pass. Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward. Consultation with Arkane remains underway and is expected to continue through the end of the year. Today, our focus should be on supporting those affected and treating one another with care and respect. I will spend time with our studios over the next week. At our October 6 town hall, we will come together as an ALL-XBOX team to reflect on our progress and look ahead to one of the strongest game lineups in our history. Matt

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