Since 2023, Microsoft has made several large-scale layoffs in its Xbox gaming division. Many of these come with studio closures and the cancellation of announced projects. Additionally, with the arrival of Bethesda and Activision, Microsoft Teams is actively changing its structure.
As the new phase of the Xbox reboot begins, Microsoft announced that some teams will be merged and transferred to other departments. Xbox Game Studios is left with only 5 studios, maybe even less if Mojang is not taken into account. As of 2021, the number is 15.
Which teams are still part of Xbox Game Studios:
- Xile Entertainment. Governed by Clockwork Revolution.
- alliance. Handled by War Machine.
- Playground games. Dealing with Forza and Fable.
- Mo Jiang Studio. There’s no completely accurate information yet on whether it remains within the Xbox Game Studios umbrella. In July 2026, Asha Sharma said the team now reports directly to her.
- Published by Xbox Game Studios. In-house publishing with partners.
Which studios have spun off, merged or closed in the past 5 years:
- 343 Industry/Halo Studio. In 2024, 343 Industries changed its name to Halo Studios. On September 22, 2026, Microsoft announced that it was actually laying off employees; only a few employees now support released games. And the development of the next Halo has been handed over to Activision.
- forced play. In July 2026, Microsoft announced that the studio would withdraw from Xbox. The process is complete.
- Double fine production. In July 2026, Microsoft announced that Double Fine would leave Xbox and become independent again. The process is complete.
- ninja theory. In July 2026, Microsoft announced that Ninja Theory was negotiating with a new buyer. However, the deal fell through and negotiations are now underway over a possible closure.
- Obsidian Entertainment. The studio left the Xbox Game Studios structure and moved to Bethesda.
- Rare. Leaving the Xbox Game Studios structure and becoming part of Activision Blizzard.
- the initiative. The studio will close in 2025.
- Studio 10. Significantly downsized in 2025 and now merged with Playground Games. In fact, Turn 10 no longer exists as an independent studio.
- Laboratory of the Undead. In July 2026, Microsoft announced that the team would be handed over to the new owner. In September, they clarified that the studio was independent but would still release State of Decay 3, including on Game Pass.
- The edge of the world. Exiting the Xbox Game Studios structure and placing it under the control of Activision.
Let us remember that Asha Sharma plans to focus on developing games for the main Xbox series, for which she is actively rebuilding the division.
