Xbox continues layoffs, shuffles studios around, and lets Activision make Halo

Hi there. Unfortunately, we're back to bad news this week. More layoffs are unfolding at Xbox as part of the previously-promised next wave. There are also some strange shake-ups to how the various studios are actually organized.

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The "reset" continues

As shared by chief content officer Matt Booty on Tuesday, more layoffs are unfolding at Xbox Game Studios. These come as part of the additional cuts outlined earlier this year, with 268 workers being cut from Halo Studios and various central roles at Xbox Game Studios.

While Booty writes that Undead Labs has gone independent and found a new publisher, two options for Ninja Theory have supposedly fallen through, and the team's employees are now in for a "consultation" about closing down. Speaking of consultation, the fate of Arkane Lyon continues to be unclear as discussions continue.

Beyond the continual human toll, there's also a reshuffling of what actually goes where.

World's Edge (the studio overseeing Age of Empires and Age of Mythology) is now reporting to Activision, as is Sea of Thieves developer Rare. Activision will also be in charge of developing the next Halo game at a new team or studio, but Halo Studios — at least, the small team that hasn't been laid off — seems to still be remaining under Xbox Game Studios.

Obsidian Entertainment, now focused mostly on a new Fallout game, is moving under Bethesda and ZeniMax Media. Candy Crush developer King is absorbing the Microsoft Casual Games team. Finally, Playground Games and Turn 10 — the latter of which saw massive layoffs in 2025 — are being combined into one studio to continue on Fable and Forza.

All I can say at the moment is the same thing I've been saying multiple times a year, for the past few years.

Please stop.