Xbox Wire has published an internal message signed Matt and sent to Team Xbox employees globally, outlining the next phase of the company’s restructuring. The update confirms the elimination of 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer. According to the message, actions completed since July, including studio divestitures, bring Xbox roughly three-quarters of the way through its previously announced restructuring. The note expresses gratitude for what colleagues have built and acknowledges the difficulty for those leaving and the teams around them.
Studio Reorganization Across Activision, Bethesda and King
The message details a broader studio reorganization intended to strengthen franchises by operating fewer business units, aligning teams that already work closely together, and focusing publishing expertise. Activision will expand its remit to World’s Edge and Rare, and will develop the next Halo title through a new, purpose-built team separate from ongoing development and plans for Call of Duty. A small team at Halo Studios will continue supporting the Halo community and games in-market. Bethesda will expand its remit to include Obsidian, which will continue its current projects, including Grounded, as well as the new Fallout project made in collaboration with Bethesda Game Studios. King will expand its remit to include Microsoft Casual Games, uniting two global leaders in casual game design and live operations.
Playground and Turn 10 will come together as one studio focused on the Forza and Fable franchises. The message notes that these two studios have been creative and franchise partners for over a decade, and the changes will formally move their work into one team.
Divestiture Updates and Proposed Closure
Xbox also shared updates on studio divestitures. In August, Compulsion and Double Fine returned to management with their IP, back catalogs, and runway funding. Undead Labs has now successfully transitioned on similar terms and, with a new publisher, will release State of Decay 3 day one on Game Pass. Two separate agreements for Ninja Theory fell through. Xbox will now begin consultation with employees on a proposed closure while continuing to explore other paths forward. Consultation with Arkane remains underway and is expected to continue through the end of the year.
The message says the immediate focus should be on supporting those affected and treating one another with care and respect. An all-Xbox town hall is planned for October 6 to reflect on progress and look ahead to one of the strongest game lineups in its history, according to the update.
