Analyst Calls Xbox Restructuring an "Inverse Acquisition"

Microsoft transfers its own studios to the management of Bethesda and Activision

Professor Joost van Dreunen of the Leonard N. Stern School of Business at New York University and a gaming industry analyst, called what is happening at Microsoft “an inverse acquisition of Xbox”.

Last week, Microsoft announced a new wave of layoffs, with another 268 employees losing their jobs. The Xbox Game Studios structure was also affected by the changes: Playground Games and Turn 10 were merged, Bethesda Game Studios gained control over Obsidian Entertainment, and Rare, World's Edge, and the Halo franchise were transferred to Activision Blizzard's management.

The decision to transfer Halo to Activision's management was particularly notable. Microsoft acquired Activision Blizzard in 2023 for $69 billion, and now one of Xbox's main franchises is under the control of a company that was a competitor just a few years ago.

Van Dreunen considers such a restructuring a significant decision. According to him, transferring Halo to Activision might be a logical step from a management perspective, especially given the company's experience with large multiplayer franchises, but it does not guarantee success on its own. The analyst also draws attention to the results of Call of Duty: after a major launch of Black Ops 6, the game's audience significantly decreased by spring.

In his opinion, Microsoft is gradually finding itself in a situation where a division acquired for $69 billion gains control over studios that the company itself created and developed over many years.

The analyst draws a parallel with Disney's acquisition of Pixar in 2006. At that time, Pixar executives gained influence not only over their own projects but also over Disney Animation's struggling internal division. According to van Dreunen, a similar situation is developing at Microsoft: the significance of the acquired companies may lie not only in their franchises but also in the management experience of their executives.