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Xbox Cuts 268 Roles and Moves Next Halo Development to Activision
Xbox is eliminating 268 roles while moving the next Halo to an Activision-led team and reorganizing Rare, Obsidian, Turn 10, Playground, and other studios.
What happened
Xbox chief content officer Matt Booty told employees on September 22, 2026 that the company is eliminating 268 roles across Halo Studios, other first-party studios, and Xbox Game Studios management and central functions. Xbox says the completed actions since July, including studio divestitures, put it roughly three-quarters of the way through its previously announced restructuring. GeekWire and PC Gamer independently reported the cuts and the same studio changes.
The memo also says Activision will oversee Rare and World's Edge and will develop the next Halo through a new purpose-built team separate from Call of Duty. A smaller Halo Studios team will continue supporting the Halo community and games already on the market. Xbox did not announce a title, release date, platforms, or exclusivity plan for the new Halo project.
What changes for Xbox's studios and games
Bethesda will take responsibility for Obsidian, which Xbox says will continue its current work, including Grounded and a new Fallout project made with Bethesda Game Studios. King will add Microsoft Casual Games. Playground Games and Turn 10 Studios will formally combine as one studio focused on the Forza and Fable franchises. The announcement does not provide revised schedules for any of those games.
Undead Labs has left Microsoft on terms Xbox describes as similar to the August transitions of Compulsion Games and Double Fine. State of Decay 3 will still launch on Game Pass on day one with a new publisher. Ninja Theory's situation is not final: Xbox says two divestiture agreements failed and consultation will begin on a proposed closure while other options remain under consideration. Consultation with Arkane is still underway through the end of 2026.
The Arcade World take
For players, the meaningful news is not the new reporting chart by itself but the concentration of production and publishing decisions. Halo, Sea of Thieves, Age of Empires, Grounded, Fallout, Forza, and Fable now sit inside fewer operating groups. That can change how teams share technology, staff, schedules, and live-service support, but Xbox has not yet shown what those changes mean inside any shipped or announced game.
The 268 eliminated roles are a confirmed present-tense cost, while promises of faster decisions or stronger games remain Xbox's stated goal rather than a demonstrated result. It would be premature to treat the reorganization as proof that a project is safer, canceled, delayed, or improved. The clearest test will be whether project teams publish stable roadmaps and then meet them without further loss of continuity.
What happens next
Xbox plans an all-company town hall on October 6. Before then, affected teams may clarify leadership, support plans, and the status of individual projects. Ninja Theory's proposed closure remains subject to consultation and Xbox says it is still exploring alternatives; Arkane's consultation is expected to continue through the end of the year.
Players should separate confirmed commitments from inference. State of Decay 3 remains announced for day-one Game Pass, and existing Halo games retain a support team. Beyond those points, wait for named studios or publishers to confirm dates, platforms, editions, and ongoing service plans. Arcade World's related coverage below provides context on other recent publisher and platform changes without turning this restructuring into a forecast.
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