Halo moves to Activision, Obsidian merges with Bethesda, and Ninja Theory faces closure
Microsoft has eliminated 268 roles across Xbox Game Studios, including staff at Halo Studios and management layers throughout the organization. Xbox content head Matt Booty announced the cuts on September 22, framing them as the next phase of a broader "reset" that has now totaled around 3,200 Xbox job losses across the fiscal year. The restructuring also moves several studios under new oversight — and leaves two in serious danger of shutting down.
Halo under Activision
The headline change: Activision, the Call of Duty publisher Microsoft bought for $69 billion in 2023, will now develop the next Halo game. A purpose-built team separate from Call of Duty development will take on the franchise, per XBOX Wire. World's Edge (Age of Empires) and Rare (Sea of Thieves) are also moving under Activision oversight. Halo Studios itself — which had several concepts cancelled before this announcement — has no active projects in development and will shift to supporting existing Halo titles.
Putting Call of Duty and Halo under one roof raises real questions about competition in the shooter market. Both the FTC and the UK's CMA flagged exactly that concern during scrutiny of the Activision acquisition. Activision president Rob Kostich has said the studio is prepared to "make the greatest Halo ever," according to Bloomberg.
Studios merged, spun out, and at risk
Obsidian Entertainment is now integrated into Bethesda Softworks. The move is aimed at strengthening the Fallout franchise — Obsidian originally made Fallout: New Vegas — while Obsidian continues work on Grounded 2. Playground Games (Forza Horizon) and Turn 10 (Forza Motorsport) are merging into a single studio to develop the franchise together. King absorbs Microsoft Casual Games on the mobile side.
Two studios are less fortunate. Ninja Theory, maker of Hellblade, faces proposed closure after two separate sale agreements fell through, putting Marvel's Blade — unveiled at Xbox's June 2026 showcase — at risk of cancellation. Arkane Studios is in a parallel closure consultation that Booty says will run through the end of the year.
On the brighter side, Compulsion Games and Double Fine have become independent studios, and Undead Labs has found a new, unnamed publisher to continue State of Decay 3.
What's next for Xbox
Booty noted that Xbox will begin preparing in October for "one of the most powerful games in the company's history." Xbox has been quietly building a major entertainment push around properties including Elder Scrolls, and the October reference lines up with longstanding expectations around The Elder Scrolls VI — though Microsoft has not named the title explicitly.