Microsoft is making another major structural change across Xbox, with Activision taking control of the next main Halo project as several other studios and franchises move under new management.
The reorganization comes alongside another round of job cuts affecting 268 positions across Xbox Studios. Earlier in 2026, Microsoft announced plans to eliminate 3,200 gaming roles in total, with around half of those cuts already completed.
The latest changes reduce the number of separate business units inside Xbox and place several studios under larger publishing groups.
Activision will lead development of the next Halo game
The biggest change involves Halo.
The next major Halo title will now be developed under Activision by a newly created team dedicated specifically to the franchise. Microsoft says this group will remain separate from Call of Duty development.
Halo Studios, formerly known as 343 Industries, will become a smaller supporting team. Its role will focus more heavily on the Halo community and support for older games.
| Xbox group | New structure |
|---|---|
| Halo | Next major game moves under Activision |
| Halo Studios | Smaller support and community focused role |
| Rare | Moves under Activision |
| World’s Edge | Moves under Activision |
| Obsidian Entertainment | Moves under Bethesda |
| Playground Games and Turn 10 | Combined into one studio |
| King | Takes responsibility for Microsoft Casual Games |
Rare, best known for Sea of Thieves, is also moving under Activision. World’s Edge, which oversees the Age of Empires franchise, will join the same group.
The changes make Activision responsible for a much broader collection of Xbox properties beyond Call of Duty.
Bethesda will oversee Obsidian
Obsidian Entertainment is moving under Bethesda as part of the same restructuring.
The arrangement will bring the two RPG focused companies closer together while Obsidian continues work on its current projects.
The move is especially notable because Obsidian is developing an upcoming Fallout project. Bringing the studio under Bethesda could make coordination easier, since Bethesda remains responsible for the wider Fallout franchise.
Obsidian will also continue managing existing games such as Grounded.
Forza studios are being combined
Microsoft is also merging Playground Games and Turn 10 into a single organization.
The combined studio will be responsible for both Forza and Fable.
Turn 10 has traditionally handled the Forza Motorsport series, while Playground Games developed Forza Horizon and is now working on Fable.
Microsoft has not detailed how leadership or individual development teams will be structured inside the combined organization.
King will also take over management of Microsoft Casual Games.
Microsoft says the goal is fewer business units
Xbox leadership says the restructuring is intended to simplify management and place teams that already work closely together under the same organizations.
The company wants to reduce the number of separate operating units while concentrating publishing expertise around larger groups.
An internal Xbox town hall is scheduled for October 6, where Microsoft plans to discuss the changes and its upcoming game lineup.
The restructuring follows a difficult period for Xbox that has included layoffs, studio changes and efforts to separate or sell several teams.
Some studios have gone independent while Ninja Theory faces closure
Microsoft also provided an update on studios that were previously being spun off or sold.
Compulsion Games and Double Fine have successfully become independent.
State of Decay 3 has found a new publisher, while discussions involving Arkane are reportedly still progressing.
Ninja Theory, however, has not found a buyer.
Microsoft says two separate deals for the Hellblade developer fell through. The company will now begin consultations with employees about potentially closing the studio.
That makes Ninja Theory one of the most uncertain parts of the latest restructuring.
The broader Xbox organization is now moving toward fewer management groups, with Activision, Bethesda, King and the newly combined racing studio taking responsibility for a larger share of Microsoft’s game development portfolio.
The transfer of Halo to Activision is the most significant symbolic change, marking a major shift for one of Xbox’s longest running franchises while Halo Studios moves into a smaller supporting role.
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