Xbox announced on September 22, 2026 that it is cutting 268 roles, handing the Halo franchise and Rare to Activision, moving Obsidian under Bethesda, merging Playground Games and Turn 10 into one studio, and opening consultation on a proposed closure of Ninja Theory. The changes came in a memo to staff published on Xbox Wire under the title “Continuing Our Reset.”
The Details
The memo says the actions completed since July, including the studio spin-offs, bring Xbox “roughly three-quarters of the way” through the restructuring announced earlier this year. Cuts land across Halo Studios, other first-party studios, and the Xbox Game Studios management and central layer.
The studio reorganization, per the memo:
- Activision takes over World’s Edge and Rare, and will develop the next Halo game with a new, purpose-built team kept separate from Call of Duty. A small team at Halo Studios stays on to support the community and games already out.
- Bethesda takes in Obsidian, which continues Grounded and its new Fallout project made with Bethesda Game Studios.
- King absorbs Microsoft Casual Games.
- Playground and Turn 10 become one studio focused on Forza and Fable.
On the studios being spun off: Compulsion and Double Fine left in August with their IP, back catalogs and funding. Undead Labs has now done the same, and with a new publisher will still release State of Decay 3 day one on Game Pass. Two separate deals for Ninja Theory fell through, so Xbox will “begin consultation with employees on a proposed closure while continuing to explore other paths forward.” Consultation at Arkane continues through the end of the year.
Xbox says it will lay out its lineup at an all-Xbox town hall on October 6.
What This Means for Players
The headline for most people is Halo. The series that built the Xbox brand will now be made by the publisher behind Call of Duty, and the studio formed to carry it becomes a support team. Nothing here changes Halo games you own today, but the next one is starting over under new ownership, and Xbox has given no window for it.
Fable and Forza Horizon are the other watch item. Playground was already building Fable while Turn 10 handled Forza Motorsport; one combined studio has to carry three franchises. For Xbox’s near-term slate, our best Xbox games of 2026 shows what the platform has actually shipped this year, and the biggest release still ahead is Gears of War: E-Day, which has gone gold and gets a public hands-on event next week.
The “reset” is also about Xbox becoming a publisher for games it does not make: it picked up Kojima’s Physint this month, and Blizzard, another Microsoft studio, just said its new StarCraft game will not be exclusive. Fewer studios, more platforms is the direction every one of today’s moves points in.
Source: Xbox Wire, “Continuing Our Reset,” September 22, 2026.