Eleven weeks after XBOX kicked off the biggest restructure in its history, the next round of cuts has arrived, and this one reaches into Halo Studios. Matt Booty, XBOX’s executive vice president and chief content officer, told staff in a memo published on XBOX Wire that 268 roles are being eliminated across Halo Studios, other first-party studios, and the XBOX Game Studios management and central functions layer. According to Booty, the actions completed since July, including the studio divestitures, put XBOX roughly three-quarters of the way through the 3,200 job cuts CEO Asha Sharma announced on July 6, when about 1,600 roles were eliminated on the same day. Those cuts followed the reset memo Sharma sent in June, and the remaining reductions are scheduled to run through Microsoft’s 2027 fiscal year, which ends next summer.
The memo also lays out a studio reorganization, with the stated goal of operating fewer business units and grouping teams that already work closely together. Activision will develop the next Halo title, led by a new, purpose-built team that Booty says is separate from ongoing development and plans for Call of Duty, while a small team at Halo Studios continues supporting the community and the games already in market, including Halo: Campaign Evolved. Activision is also expanding its remit to World’s Edge, the Age of Empires studio, and Rare, which lost Everwild to cancellation during last summer’s round of cuts. Activision president Rob Kostich said in a statement that the goal is to “make the greatest Halo game ever” and that the company has already started assembling the team.
Bethesda is picking up Obsidian, which will continue its current projects, including Grounded, along with the new Fallout project being made in collaboration with Bethesda Game Studios. King, meanwhile, is absorbing Microsoft Casual Games, which puts Candy Crush and the Microsoft Solitaire Collection under one roof. Playground Games and Turn 10 Studios are also becoming a single studio focused on the Forza and Fable franchises. The two have shared the ForzaTech engine and franchise duties for over a decade, and Booty’s memo says today’s changes formally move their work into one team. Playground’s Forza Horizon 6 launched in May and the studio is still working on Fable, which was pushed to February 2027, while Turn 10 handles Forza Motorsport.
As for the studios leaving XBOX, the memo confirms that Compulsion Games and Double Fine returned to their management teams in August with their IP, back catalogs, and runway funding, matching the terms laid out in July. Double Fine cut 23 jobs just a few weeks after that announcement. Undead Labs has now transitioned on similar terms, and with a new publisher that Booty didn’t name, State of Decay 3 will still release day one on Game Pass. Ninja Theory is the one studio being left out, as a deal never came together. Two separate agreements for the Hellblade studio fell through, and XBOX will now begin consulting with employees on a proposed closure while it continues to explore other paths forward. Consultation with Arkane Lyon remains underway and is expected to run through the end of the year.
When the reset was announced in July, I said none of the four departing studios were being shut down, at least not for now, and that walking away with your own IP, your catalog, and money in the bank was likely the best outcome those teams could have hoped for. At the time, Ninja Theory and Undead Labs had terms in place with unnamed buyers, and I pointed to Arkane Lyon as the one genuine question mark. Booty said he’ll spend time with the studios over the next week, and the entire XBOX team will come together at an October 6 town hall to review its progress and, as Booty puts it, look ahead to one of the strongest game lineups in XBOX history. The full memo is on XBOX Wire.
