In recent months, PlayStation Studios has often been criticized for closing internal teams, but Xbox has also significantly reduced its own structures in recent years. After another wave of layoffs, only 12 studios remain directly under the Xbox brand, almost half the number from five years ago.
The situation would look even more serious without the acquisition of Activision Blizzard for almost $70 billion in 2023. Microsoft closed studios, merged teams, and transferred some of them to third-party publishers or returned them to independence.
Even the surviving teams suffered serious losses. Halo Studios, after mass layoffs, is primarily engaged in community support, and new games in the series have been transferred to Activision. Layoffs also affected id Software and ZeniMax Online. Ninja Theory faced the threat of closure.
At the same time, Microsoft states that the current restructuring is only about three-quarters complete, and the fate of Arkane Lyon remains uncertain. Therefore, the number of Xbox studios may decrease further by the end of 2026.
Studios within the Xbox ecosystem (as of September 2026):
- Activision Blizzard
- Arkane Lyon
- Bethesda
- The Coalition
- id Software
- inXile Entertainment
- MachineGames
- Mojang Studios
- Ninja Theory
- Playground Games
- World’s Edge
- ZeniMax Online
Studios that have closed, regained independence, or merged since 2021:
- Alpha Dog Games (closed by Microsoft, now resumed operations as an independent studio)
- Arkane Austin (closed)
- Compulsion Games (regained independence)
- Double Fine (regained independence)
- The Initiative (closed)
- Obsidian Entertainment (acquired by Bethesda)
- Rare Games (transferred to Activision Blizzard)
- Roundhouse Studios (acquired by ZeniMax Online)
- Tango Gameworks (closed, then acquired by Krafton)
- Undead Labs (regained independence)