Xbox continued its internal restructuring this week, with approximately 300 employees losing their jobs. The adjustments focused on merging existing studios. After years of departures, closures, and consolidations, the number of studios under Xbox has decreased from 23 in 2021 to 12.
This round of contraction occurred after Xbox expanded its major publishing assets. Microsoft completed its acquisition of Activision Blizzard for nearly $70 billion in 2023, and the latter remains one of the 12 studios under the Xbox umbrella.
The adjustments announced this week also involve the Halo series. The next Halo title will be developed by Activision; Halo Studios has not closed, but most of its team members have left. The studio will remain to support the Halo community. Prior to this round of adjustments, the team had not developed an original new Halo title.
Rare has also been retained and will move under Activision, while continuing to update Sea of Thieves. It is not yet clear how this change will affect Rare's future projects, with some players concerned that the team might shift to providing development support for Call of Duty.
In other merger arrangements, Obsidian Entertainment will move under Bethesda to continue developing new Fallout games; Turn 10 will collaborate with Playground Games on future Forza and Fable projects.
Among the studios that were part of Xbox in 2021, Alpha Dog.exe, Tango, The Initiative, and Arkane Austin have since shut down. Tango was later acquired by Krafton and resumed operations, while Alpha Dog.exe returned as an independent studio. Double Fine, Compulsion Games, and Undead Labs have also regained their independence.
Some teams still within the Xbox ecosystem have also undergone significant staff reductions, including Halo Studios, Doom developer id Software, and Zenimax Online. Ninja Theory failed to complete an independent deal and currently faces the risk of closure; the future of Arkane Lyon is also uncertain. Xbox stated that the restructuring process is currently only about 75% complete, and the current 12 studios may continue to decrease.