Microsoft Xbox Game Studios is cutting 268 more jobs as its restructuring effort continues into late 2026. This latest round of layoffs changes how major franchises will be developed and who controls the studios behind them. Players should anticipate significant management changes for established franchises such as Halo and Age of Empires in the near future.
Activision takes control of Halo and Age of Empires while Ninja Theory likely closes
The restructuring involves major internal mergers and the transfer of studio control to different divisions within the company. Activision will take over World's Edge, the team behind the Age of Empires series, and Rare, known for Project Dark and Sea of Thieves. A new team inside Activision will also handle the development of Halo games going forward.
Other studios are seeing their operational status change in different ways. Bethesda will take control of Obsidian Entertainment and work on a new Fallout project. Playground Games and Turn 10 will fully merge into a single unit. King and Microsoft Casual Games are also merging their operations.
Several studios are now operating independently after the restructuring. Compulsion, Double Fine, and Undead Labs have been separated from direct Xbox control. Ninja Theory, the developer behind Hellblade, is likely to close after agreements to continue operating with other companies fell through. Arkane Studios remains in talks with Xbox, and these discussions may continue until 2027.
Microsoft confirmed these changes as part of an ongoing strategy to streamline its game development operations. The company has not released specific timelines for the new project structures or the potential closure of Ninja Theory. Attention now turns to how the merged and independent studios will deliver games to Xbox players.
Source: SteamDeckHQ
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