In a significant move impacting its gaming division, Xbox has initiated further workforce reductions, affecting 268 employees across various departments. This decision comes shortly after a previous round of layoffs earlier in the year. Concurrently, the company is undertaking a major reorganization of several key first-party development studios, with implications for major franchises such as Halo, Fallout, Forza, and Fable. These strategic shifts aim to consolidate resources, streamline development processes, and foster new collaborative models within the Xbox ecosystem.
The announcement, made by Xbox chief content officer Matt Booty, detailed several critical changes. Notably, the future development of the Halo franchise will transition to Activision, with a newly formed team taking the lead. While a smaller contingent at Halo Studios will continue to provide support, Activision, already responsible for the Call of Duty series, will now oversee this iconic shooter. Furthermore, Rare, the studio behind titles like Sea of Thieves, will also integrate into Activision, suggesting a broader consolidation strategy for Microsoft's acquired gaming assets.
Regarding the beloved Fallout series, Obsidian Entertainment, renowned for Fallout: New Vegas, is now operating under Bethesda. This move solidifies an existing collaboration, with Obsidian continuing work on its upcoming Fallout project, reportedly helmed by former New Vegas director Josh Sawyer. Bethesda itself remains focused on The Elder Scrolls 6 but has already commenced pre-production for Fallout 5. Additionally, Playground and Turn 10 studios are merging to concentrate on the Forza and Fable franchises, while King will expand its oversight to include Microsoft Casual Games, aiming to unify casual game design and live operations.
These organizational adjustments often formalize existing inter-studio collaborations, as seen with Obsidian and Bethesda's ongoing partnership. Earlier this summer, Xbox divested from several internal studios, including Compulsion Games, Undead Labs, and Double Fine, allowing them to retain their intellectual property. However, an agreement could not be reached with Ninja Theory, the developer of Devil May Cry. Discussions are reportedly still underway with Arkane, known for the Dishonored series, regarding its future with Xbox.
Looking ahead, Xbox plans to host a town hall meeting for its remaining employees and studios. This gathering will serve as an opportunity to review recent progress and to discuss the company's robust upcoming lineup of games. These widespread changes underscore Xbox's commitment to adapting its internal structure to better support its strategic goals and deliver a strong portfolio of gaming experiences.
