Full Breakdown
Xbox Restructuring Shifts Studios, Cuts Jobs, and Moves Halo to Activision
By Drooid · · How we work
Core Restructuring Moves
Microsoft’s Xbox division announced a sweeping reorganization that transfers the UK studio Rare and ownership of the Halo franchise to Activision, proposes the closure of Ninja Theory, and eliminates 268 roles across Halo Studios, other first-party studios, and Xbox Game Studios management. The changes are part of a broader “reset” outlined by CEO Asha Sharma, which also expands Activision’s remit to include Rare and World’s Edge, places Bethesda in charge of Obsidian, and merges Playground with Turn 10 to focus on the Forza and Fable franchises.
Background and Recent Changes
The restructuring follows a series of divestments and layoffs that began earlier in the year. Five studios—including Ninja Theory and Undead Labs—were slated for divestiture, while Compulsion Games and Double Fine regained independence in the previous month. Halo Studios, originally launched as 343 Industries in 2007, rebranded in 2024 and released *Halo: Campaign Evolved* in July, its first title since *Halo Infinite* (2021). Rare, acquired by Xbox in 2002, continues to support *Sea of Thieves* after the cancellation of its announced project *Everwild* in 2025.
Data and Statistics
- 268 roles eliminated across Halo Studios and related units.
- Two separate agreements to sell Ninja Theory fell through, prompting the proposed closure.
- Activision will assume development of the next Halo title with a newly formed, purpose-built team.
Official Statements and Responses
The post also noted that “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.”
Asha Sharma, Microsoft’s gaming chief, framed the moves as an investment in core intellectual property, citing recent announcements of new *Fallout*, *Diablo*, and *StarCraft* titles.
A scheduled town-hall on October 6 will be used to reflect on progress and preview the upcoming game lineup.
Timeline
- July 2024 – Release of *Halo: Campaign Evolved*.
- July 2024 – Initial wave of 1,600 layoffs announced.
- Early 2024 – Transfer of Rare and Halo franchise to Activision announced via Xbox Wire.
- October 6 (scheduled) – All-Xbox town hall to discuss restructuring outcomes.
Impact and Outlook
The restructuring consolidates Xbox’s development pipeline around a smaller set of high-profile franchises, aiming to reduce organizational fragmentation and align with the “reset” strategy. By moving Halo to Activision, Microsoft seeks to leverage Activision’s annual shooter release cadence, while the closure of Ninja Theory underscores a shift away from smaller, narrative-driven studios. The continued focus on titles such as *Minecraft*, Halo, and *Candy Crush* suggests an emphasis on proven revenue generators amid ongoing job reductions.
Conflicting Reports & Gaps
The Verge reports a two-wave layoff plan of 1,600 employees in July followed by another 1,600 later in the fiscal year, whereas GamesIndustry cites a single target of 3,200 cuts for 2024. Both figures align on the overall scale but differ in how the reductions are phased. No public information has been provided about the ultimate fate of the *Senua* project announced earlier in the year.
Verbatim Quotes
- “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.” — Microsoft