Microsoft is cutting another 268 jobs at Xbox and reshuffling its studios. The next Halo will be made by Activision, Obsidian moves under Bethesda, and Ninja Theory, the Hellblade studio, is facing closure. Xbox content chief Matt Booty told staff on 22 September in a memo that is now published on Xbox Wire.
The cuts hit Halo Studios, other first-party teams and the Xbox Game Studios management layer. Booty says that together with the studio sales that started in July, this takes Xbox about three quarters of the way through the restructuring announced earlier in the year.
Who moves where
| Studio | What changes |
|---|---|
| Halo Studios | The next Halo is made by a new team inside Activision, separate from Call of Duty. A small group stays at Halo Studios to support the games already out and the community |
| World's Edge and Rare | Move under Activision. That means Age of Empires and Sea of Thieves |
| Obsidian | Moves under Bethesda, keeps working on Grounded and a new Fallout project with Bethesda Game Studios |
| Playground and Turn 10 | Merge into one studio making Forza and Fable |
| Microsoft Casual Games | Moves under King |
| Undead Labs | Spun off with a new publisher. State of Decay 3 still launches day one on Game Pass |
| Compulsion and Double Fine | Went independent in August, taking their games and the rights to them |
Halo is the headline. The series Xbox launched with now goes to the studio best known for Call of Duty. Booty stresses that the team is new and not folded into Call of Duty plans, but the memo gives no timing or platforms for the next game.
Ninja Theory and Arkane
Microsoft had been looking for a buyer for Ninja Theory, and two separate deals fell through. Staff consultation on a proposed closure now begins, although Booty says other options are still being explored. Consultation at Arkane is ongoing and, in his words, expected to run until the end of the year.
Microsoft bought Ninja Theory in 2018. Since then the studio has shipped one big game, Hellblade II, in 2024. If the closure goes ahead, Senua's story is left without the people who wrote it.
What it means for the games
The memo mentions no cancellations or delays. Obsidian carries on with Grounded and the Fallout project, and Forza and Fable are now in one set of hands. State of Decay 3 will come from a different publisher, still on Game Pass from day one. Xbox holds an all-hands on 6 October, where Booty promises a look at one of the strongest line-ups in the company's history.
For players the big question is Halo. Activision ships a Call of Duty every year, and if Halo gets the same production line, new games may come more often. Rock Paper Shotgun pointed out the same day that production-line development tends to make for predictable games, and that is the real risk for the series.
Sources
Xbox Wire: Continuing Our Reset, memo from Matt Booty, 22.09.2026. Rock Paper Shotgun on production-line development. Screenshots from the official Steam galleries.
