Microsoft has confirmed the next stage of its Xbox studio restructuring: Halo is moving to Activision, Obsidian is merging into Bethesda, Playground Games and Turn 10 are combining into one studio, and Ninja Theory is heading into consultation on closure after two buyer agreements fell through. 268 roles are being eliminated across Halo Studios, other first-party teams and Xbox Game Studios’ central functions.
343 Industries, which has run Halo since 2007, is being reduced to a smaller support team maintaining existing titles rather than leading new development. The franchise itself moves to Activision, pairing it with the studio behind Call of Duty rather than keeping it inside Xbox Game Studios’ own structure.
Which studios are merging in this Xbox studio restructuring
Obsidian is merging with Bethesda, following its return to the Fallout franchise. The combined studio will continue Grounded alongside Obsidian’s new Fallout project, developed in collaboration with Bethesda Game Studios rather than as a separate label. On the racing side, Playground Games and Turn 10 are consolidating into a single studio responsible for both Forza and Fable, ending the two teams’ separate management of Microsoft’s racing and RPG output.
Consultation with Arkane is still ongoing, with no outcome confirmed yet. Ninja Theory’s situation has already resolved: after failing to secure a buyer twice, the Hellblade studio will now go through consultation on closure rather than a spin-out.
What’s different from the last round of divestitures
We covered Double Fine regaining its Xbox-era IP rights in August, when its split from Microsoft was still being finalised. Microsoft now says that split is done: Compulsion Games, Double Fine and Undead Labs have all completed their transition to independence. That closes out the batch of divestitures announced alongside Double Fine’s IP deal.
Ninja Theory’s outcome sits in direct contrast. Three studios found a path to independence; Ninja Theory could not find a buyer at all, and is now moving toward closure instead of a spin-out. The same restructuring wave produced both outcomes, which is the clearest sign yet that Microsoft is not applying one template across its portfolio: some studios get sold, some get merged, and at least one gets shut.
- Halo: moves to Activision; 343 Industries becomes a smaller support team
- Obsidian: merges with Bethesda, continuing Grounded and its new Fallout project
- Playground Games and Turn 10: merge into one studio covering Forza and Fable
- Compulsion Games, Double Fine, Undead Labs: independence confirmed complete
- Ninja Theory: no buyer found, entering consultation on closure
What to watch next
The Arkane consultation is the open thread here: everything else in this update has a stated outcome, but Arkane’s does not. Until Microsoft confirms what happens to that studio, the shape of this restructuring round isn’t finished.
