Xbox Cuts 268 More Roles, Hands the Next Halo to an Activision Team

The Xbox reset that started in July has a second chapter, and it landed today. In a memo to staff published on the official Xbox Wire, chief content officer Matt Booty confirmed that 268 more roles are being eliminated across Halo Studios, other first-party studios, and the management and central functions layer of Xbox Game Studios. He writes that the actions completed since July, including the studio sales, put the division roughly three quarters of the way through the restructuring announced this summer.

The headline for players sits a few lines further down. The next Halo game will be developed by Activision, through what Booty calls a new, purpose-built team that is separate from ongoing Call of Duty work. Halo Studios, the team that shipped Halo: Campaign Evolved this summer, keeps only a small group to support the Halo community and the games already on sale. That is a quiet end for the studio that carried the franchise, in one name or another, for nearly two decades.

Fewer studios, bigger publishers

The memo frames the cuts as part of a wider reorganization built around fewer business units. Activision expands to take in Rare and World's Edge, the Age of Empires studio, on top of the new Halo team. Bethesda takes in Obsidian, which continues its current projects, including Grounded and the new Fallout game it is building with Bethesda Game Studios. King, the Candy Crush company, absorbs Microsoft Casual Games. And Playground and Turn 10, partners on Forza for more than a decade, formally merge into one studio focused on the Forza and Fable franchises.

Booty's stated goal is to strengthen franchises by aligning groups that already work together and concentrating publishing expertise. Read plainly, it means the Xbox Game Studios label as a standalone management layer is mostly gone, and the division now runs through three big publishers, Activision, Bethesda and King, plus a merged racing and RPG studio. For a company that spent years buying studios and letting them run independently, that is a real change of philosophy, not a reshuffle.

Three studios out, one closing

The divestitures announced in July are now mostly settled, and we have followed each of them as they happened. Compulsion and Double Fine returned to management in August with their IP, back catalogs and runway funding, just as we covered when Compulsion walked out with every game it ever made. Undead Labs has now left on similar terms. It has a new publisher, and Booty says State of Decay 3 will still arrive day one on Game Pass, which is the one line in this memo that will genuinely reassure some people.

Ninja Theory is the exception. Two separate sale agreements fell through, and Xbox is beginning a consultation with employees on a proposed closure while, in the memo's words, continuing to explore other paths. Consultation with Arkane in France is still running and is expected to continue through the end of the year. Booty ends by saying he will spend the next week with the studios and that an all-Xbox town hall on October 6 will look ahead to what he calls one of the strongest game lineups in the company's history.

Our take

When we wrote up the original 3,200 job reset, we said the studio we worried about most was Arkane. We were half right. Arkane is still in limbo, but Ninja Theory is the one facing closure today, after two buyers walked away, and Halo Studios has been reduced to a maintenance crew. The Halo decision is the one that will be argued about for years. Activision knows how to ship a shooter on schedule, and a dedicated team that is not tied to Call of Duty is the right structure if this is going to happen at all. But Halo has always been about a specific feel and a specific universe, and that lives in people, not org charts. We hope the new team hires plenty of them. For everyone leaving Xbox this week, the town hall promise of a strong lineup will ring hollow, and we would rather say that than pretend otherwise.