Microsoft has announced a major restructuring of Xbox's internal studios, affecting several of them. As part of the reorganization, Activision will gain control over the Halo franchise, Obsidian will join Bethesda, Turn 10 will merge with Playground Games, and Ninja Theory may be closed.
This latest phase of restructuring follows the massive layoffs announced by Microsoft in July. At that time, the company announced plans to cut approximately 1,600 Xbox employees, with another similar number of layoffs planned before the end of Microsoft's fiscal year.
According to Xbox COO Matt Booty, the current round of cuts affected an additional 268 positions at Halo Studios, other internal teams, as well as Xbox Game Studios leadership and central divisions. Booty stated that Xbox is approximately three-quarters complete with its previously announced restructuring.
One of the most notable changes will be the transfer of the Halo franchise to Activision's control. A separate team is planned for the series, which will not be involved in the current development and planning of new Call of Duty games. However, Halo Studios will not be completely liquidated – a small team will continue to support already released games and the series' community.
Activision will also take control of World's Edge, responsible for Age of Empires, and Rare, known for Sea of Thieves, among others.
Another change will affect Obsidian Entertainment. The studio, which created The Outer Worlds and Avowed, will be officially integrated into Bethesda. Obsidian will continue to work on current projects, including Grounded and a new game in the Fallout universe.
Turn 10 Studios and Playground Games will also merge. After the merger, the teams will become one studio, which will work on the Forza and Fable franchises. According to Booty, the two teams have collaborated closely for over ten years in technical, creative, and franchise aspects, so their work has now been officially combined.
Meanwhile, Undead Labs will become a fully independent studio. The developers will continue to work on State of Decay 3, but the game will now have a new publisher. Microsoft has confirmed that State of Decay 3 will still be released on Game Pass on day one.
The most uncertain situation has arisen around Ninja Theory. According to Booty, two separate agreements that could have determined the studio's future fell through. Xbox will now begin consultations with employees regarding the possible closure of Ninja Theory, while continuing to explore other options for its preservation.