Microsoft is continuing the restructuring of its Xbox gaming division announced earlier this year. According to a new letter from executive vice president and chief content officer Matt Booty, the new wave of layoffs will affect 268 employees at Halo Studios, other internal studios, and Xbox Game Studios’ management and central departments.
Booty pointed to changes that have taken place since July, including moving multiple studios outside of Microsoft, and that the company’s previously announced restructuring is about three-quarters complete.
In addition, it was decided to change the distribution of internal studios between departments:
- Activision Blizzard will expand its oversight responsibilities for World’s Edge and Rare. In addition, Activision will also develop the next installment of Halo. A separate team will be created for the project, which will not be tied to the current development and plans for Call of Duty. A small team at Halo Studios will continue to support existing games.
- Bethesda will take over Obsidian’s duties. The studio will continue to work on current projects, including Grounded, as well as new games in the Fallout universe being developed in partnership with Bethesda Game Studios.
- King is taking over Microsoft’s casual gaming slate. As a result, Microsoft will merge two divisions that specialize in casual games and their long-term support.
- Playground Games and Turn 10 will merge into a studio focused on the Forza and Fable series. Matt Booty noted that the two studios have been working closely together on games and franchises for more than a decade.
Microsoft also addressed the future fate of the studios the company has decided to exit from its structure:
- In August, Compulsion Games and Double Fine returned to their previous management and withdrew the intellectual property, game catalog and funding for further work.
- Undead Labs has changed the publisher of State of Decay 3, which is in development. The game will be available on Game Pass on launch day.
- Two separate attempts were made to trade with Ninja Theory, but both failed. The company will now begin consultations with employees about the possibility of closing the studio, while continuing to explore other options for its future fate.
- According to Microsoft, talks about Arkane are still ongoing and should last until the end of 2026.
Xbox’s next major internal event will be an all-hands meeting on October 6, where management plans to discuss the results of the restructuring and future plans for the company’s game lines.
