🎮 Xbox Is Restructuring Again
Xbox's massive internal reset has entered another phase.
Microsoft announced another 268 job cuts across Halo Studios, other first-party teams and Xbox Game Studios' management and central functions. At the same time, several major studios and franchises are being reorganized under fewer business units.
The biggest headline is unmistakable:
Activision is now developing the next major Halo game.
But that's only one piece of a much larger Xbox restructuring.
🪖 Halo Is Moving to Activision
The next Halo title will be developed by a new purpose-built team within Activision.
Microsoft says the team will be separate from Activision's existing Call of Duty development plans. Meanwhile, a smaller team at Halo Studios will continue supporting the existing Halo community and games already on the market.
That means the studio formerly known as 343 Industries is no longer expected to lead the next flagship Halo project.
Activision President Rob Kostich said the new team has already begun assembling and described the goal as creating the next chapter of the franchise while staying connected to what players value about Halo.
🏴☠️ What Happens to Rare?
Rare is also moving under Activision's remit.
The UK studio is best known for franchises including Sea of Thieves, and Microsoft's announcement places Rare alongside World's Edge under Activision's organizational structure.
This does not mean Activision has purchased Rare as a separate company. Rather, Microsoft is changing which internal Xbox business unit oversees the studio and its publishing responsibilities.
For Rare, the change brings one of Xbox's oldest studios into the same organizational group now responsible for the next Halo project.
💥 268 More Roles Eliminated
The restructuring also comes with another round of layoffs.
Microsoft says 268 roles are being eliminated across Halo Studios, other first-party studios, and Xbox Game Studios' management and central functions.
These cuts follow the much larger reductions announced earlier in the year.
Microsoft says the completed actions, including studio divestitures, have taken it roughly three-quarters of the way through its previously announced restructuring.
The latest changes therefore aren't an isolated studio decision. They're part of a broader attempt to reduce the number of Xbox business units and consolidate teams around major franchises.
⚔️ Ninja Theory Faces a Proposed Closure
One of the most significant developments involves Ninja Theory, the studio behind Hellblade.
Microsoft says two separate agreements to divest the studio fell through. As a result, the company has begun consultation with employees regarding a proposed closure, while saying it will continue exploring other options.
The wording matters here.
Ninja Theory has not simply been announced as already closed. The company is entering a consultation process while Microsoft continues looking for another path forward.
🏢 More Studios Are Being Reorganized
Halo and Rare aren't the only teams affected.
Microsoft announced several additional changes:
| Studio / Business | New Structure |
|---|---|
| Halo Studios | Small team remains; Activision develops next Halo |
| Rare | Moves under Activision |
| World's Edge | Moves under Activision |
| Obsidian | Moves under Bethesda |
| Playground Games + Turn 10 | Combined around Forza and Fable |
| Microsoft Casual Games | Moves under King |
| Ninja Theory | Proposed closure consultation |
Microsoft says the objective is to operate with fewer business units, align teams that already work closely together and concentrate publishing expertise.
☢️ What About Obsidian and Fallout?
Another interesting part of the reshuffle is Obsidian.
The studio is moving under Bethesda's organizational structure, but Microsoft says Obsidian will continue its existing projects, including Grounded, alongside a new Fallout project being made in collaboration with Bethesda Game Studios.
Meanwhile, Playground Games and Turn 10 are being brought together as one studio focused on Forza and Fable.
The overall pattern is clear: Xbox is consolidating studios that already share franchises or development relationships.
📉 Why Is Xbox Doing This?
Microsoft's official explanation is that the Xbox reset is intended to create a simpler structure.
The company says it wants to:
Operate fewer business units
Align teams working closely together
Focus publishing expertise
Strengthen major franchises
Reduce organizational complexity
The restructuring follows Microsoft's earlier layoffs and studio divestitures announced throughout 2026.
What the changes mean for individual franchises will depend on how these newly organized teams operate over the coming years.
🔮 What Happens to Halo Now?
The immediate answer is that Activision is building the next major Halo game.
Halo Studios will continue supporting existing titles with a smaller team, while Activision assembles its new development group for the next flagship installment.
That creates an unusual situation for one of Xbox's most recognizable franchises.
Halo is now being developed within the same corporate family as Call of Duty, but under a separate purpose-built team.
Exactly what that means for the franchise's creative direction remains to be seen.
🎯 Final Take
Xbox's latest restructuring is much bigger than simply moving Halo to Activision.
268 more roles are being eliminated. Rare and World's Edge are moving under Activision. Obsidian is moving to Bethesda. Playground and Turn 10 are being combined. And Ninja Theory faces a proposed closure after two divestiture deals failed.
For Halo, the immediate future is especially significant.
The next major game will come from a new Activision-led team, while Halo Studios becomes a smaller support operation for existing games.
Xbox says the goal is a simpler and more focused organization. The next few years will show how that new structure affects the franchises and studios at the center of the reset.
