0
0Xbox Layoffs: Halo Moves to Activision, Obsidian to Bethesda
On 22 September Microsoft cut another 268 roles across Xbox's first-party studios, Xbox Game Studios management and its central functions, and moved several studios under new owners. The headline everywhere is that Activision — the Call of Duty publisher — will make the next Halo game.
That is true, and it is also the smallest part of what was announced.
Where every studio sits now
No single report published the full list, so here it is in one place.
| Studio | Known for | Where it sits now |
|---|---|---|
| Halo Studios | Halo | Heavily cut; next Halo goes to Activision |
| Rare | Sea of Thieves | Under Activision |
| World's Edge | Age of Empires | Under Activision |
| Obsidian | The Outer Worlds, Avowed | Under Bethesda, on a new Fallout |
| Playground + Turn 10 | Forza, Fable | Merged into one studio |
| Undead Labs | State of Decay | Independent, with layoffs |
| Compulsion Games | South of Midnight | Independent, keeps its IP |
| Double Fine | Psychonauts | Independent, keeps its IP |
| Ninja Theory | Hellblade | Possible closure after a failed sale |
| Arkane | Dishonored, Deathloop | Divestment talks running to end of 2026 |
The number is not the story
268 is a small figure next to what came before it. Xbox announced this restructuring on 6 July 2026: 1,600 roles cut immediately, and another 1,600 flagged for the following year — about 3,200 in total. Matt Booty, Xbox's EVP and chief content officer, put the current position plainly: the actions since July "bring us roughly three-quarters of the way through previously announced restructuring".
So this is not a fresh round of bad news. It is the visible part of a plan that was set out in the summer, and by Xbox's own accounting there is a quarter of it still to come. The two names in the table with no settled outcome — Ninja Theory and Arkane — are where that remaining quarter most likely lands.
What the pattern actually is
Read the table as a whole rather than story by story and something clearer emerges than "Xbox had layoffs".
Xbox Game Studios is being taken apart as an organisation. Its studios are not being closed so much as redistributed — to Microsoft's publisher labels, or out of the company altogether. Activision now holds Halo, Age of Empires and Sea of Thieves. Bethesda holds Obsidian. Four studios have been cut loose entirely, three of them keeping their own IP.
The Obsidian move is the one that reads as design rather than cost-cutting. Obsidian made Fallout: New Vegas, the entry a good many people still rank first in the series, and it now sits inside the company that owns Fallout, working on a new one. Bethesda and Microsoft Casual Games president Jill Braff told staff the studio keeps its "creative identity and strengths", and it keeps its leadership team.
The Halo move reads differently. Activision is building a new, purpose-made team for it, kept separate from the Call of Duty group. That is a reassuring detail and a demanding one: a brand-new team on a franchise that is twenty-five years old, assembled in the same week the studio that used to own it was reduced to a skeleton crew.
What this does not tell you
Nothing here says anything about release dates, and it is worth resisting the temptation to read any. State of Decay 3 is still coming, still day one on Game Pass, and still headed to PlayStation as well as Xbox and PC. Forza and Fable continue under the merged Playground and Turn 10. Beyond that, a studio changing owner mid-project tells you about a spreadsheet, not about a schedule.
The honest summary: the layoffs are the part that hurts people, the studio map is the part that matters for what gets made, and a quarter of the plan has not landed yet.
Sources
Reported by Game Informer, Engadget, PC Gamer, Push Square and Variety.