Xbox lays off another 268 people, Halo is handed over to Activision for development, Obsidian is transferred to Bethesda

📅 2026-09-23

Abstract:

Recently, Xbox officially announced a new round of business restructuring plan. As an important part of this year's "Xbox Reset" reform, 268 positions will be eliminated this time. The layoffs will cover Halo Studio, other first-party development groups, as well as the management and back-end functional departments of Xbox Game Studios.

Xbox laid off another 268 people! Halo will be developed by Activision and Obsidian will be transferred to Bethesda

Xbox chief content officer Matt Buti stated in an internal public memo that a series of adjustments since July, including studio divestment and transfer, have completed approximately 75% of the previous overall restructuring plan. Xbox has completed 1,600 layoffs in July this year, and plans to cut another 1,600 positions by the end of this fiscal year. This 268-person layoff is a continuation of this large-scale restructuring.

Changes in core studio structure

Halo series handed over to Activision:

The next generation of "Halo" will be developed by a newly formed team within Activision, which is independent of the "Call of Duty" development team. The original Halo Studio will not be closed directly, but only a small team will be retained to continue to maintain the already launched Halo games and operate the player community, and will no longer lead the development of new main games.

Xbox laid off another 268 people! Halo will be developed by Activision and Obsidian will be transferred to Bethesda

Rare and World’s Edge are owned by Activision:

The management rights of classic studio Rare and the World’s Edge team responsible for the “Age of Empires” series will also be transferred to Activision.

Xbox laid off another 268 people! Halo will be developed by Activision and Obsidian will be transferred to Bethesda

Obsidian Entertainment is included in the B club system:

Obsidian is officially under the control of B Company. It will continue to promote existing projects, including the new "Fallout" project jointly developed with B Company. The development and operation of existing works such as "Confined Survival" will not be affected.

Xbox laid off another 268 people! Halo will be developed by Activision and Obsidian will be transferred to Bethesda

Playground Games and Turn10 officially merge:

The two long-term collaborative studios have been integrated into one, and are jointly responsible for the development of the entire Forza series and the rebooted version of Fable.

Xbox laid off another 268 people! Halo will be developed by Activision and Obsidian will be transferred to Bethesda

Integration of casual game business:

King Studio takes over Microsoft Casual Games and integrates the casual game development and long-term operation resources of both parties.

Follow-up progress of studio divestiture

There are also new developments in the previously announced studio sales: Compulsion Games and Double Fine have completed their spin-offs and returned to complete independence. Undead Labs has also completed the ownership transfer, and "State of Decay 3" is still the first to join XGP. However, transfer negotiations for Ninja Theory ultimately failed to reach an agreement.

The purpose of this reorganization mentioned in the memorandum is to reduce redundant business units, merge teams that work closely together, concentrate distribution resources, and strengthen its key IPs. However, this round of large-scale structural adjustments also caused controversy in the industry, and a large number of senior developers resigned as a result. At this stage, the official has not announced any list of projects that have been axed. The specific future plans of each IP still need to wait for subsequent public information from Xbox.

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