Xbox has announced significant changes to its studio structure, as well as further layoffs and the potential closure of Hellblade developer Ninja Theory.
In a statement, Xbox COO Matt Booty revealed that 268 roles across Halo Studios, other first-party studios, and the Xbox Game Studios management and central functions layer would be “eliminated”.
Booty says that these actions bring Xbox “roughly three-quarters” of the way through its planned restructuring, which included 1,600 layoffs and several studio divestitures that were made in July.
It’s also been confirmed that Activision will develop the next Halo game, led by a “new, purpose-built team that is separate from ongoing development and plans for Call of Duty”. Booty says that a “small team” will remain at Halo Studios, which will “continue supporting the Halo community and games in-market.”
Activision will also oversee Age of Empires and Age of Mythology studio World’s Edge, as well as Sea of Thieves developer Rare.
Elsewhere, Obsidian Entertainment, creators of The Outer Worlds, Avowed and Fallout New Vegas, will now be overseen by Bethesda, as the studio begins work on its first new Fallout game since 2010. Obsidian will also continue work on other projects, such as Grounded and DLC for The Outer Worlds 2.
Xbox’s restructuring will also affect Forza Motorsport creator Turn 10 Studios, which will merge with Forza Horizon and Fable developer Playground Games to become “one studio focused on the Forza and Fable franchises.”
Booty’s statement concluded with an update on recent studio divestitures, which saw Compulsion Games and Double Fine return to being fully independent developers, whilst negotiations for the sale of Undead Labs and Ninja Theory were ongoing.
Booty has revealed that Undead Labs has instead transitioned to independent development and, alongside a new publishing partner, will bring State of Decay 3 to Xbox Game Pass at launch.
As for Ninja Theory, it’s been revealed that “two separate agreements” for the sale of the Hellblade developer had unfortunately fallen through, with Xbox now commencing a consultation with staff on a proposed studio closure.
Booty’s statement can be read in full below:
Team,
I’m writing to share several updates as part of the XBOX reset outlined earlier this year.
First, we are eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer. The actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring. I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them.
Second, we are reorganizing our studios. The goal is to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise.
- Activision will expand its remit to World’s Edge, as well as Rare. Activision will also be developing the next Halo title, led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty. A small team at Halo Studios will continue supporting the Halo community and games in-market.
- Bethesda will expand its remit to include Obsidian, which will continue its current projects, including Grounded, as well as the new Fallout project made in collaboration with Bethesda Game Studios.
- King will expand its remit to include Microsoft Casual Games, uniting our two global leaders in casual game design and live operations.
- Playground and Turn 10 will come together as one studio focused on the Forza and Fable franchises. These two studios have been creative and franchise partners for over a decade, and today’s changes will formally move their work into one team.
Third, an update on our studio divestitures: In August, Compulsion and Double Fine returned to management with their IP, back catalogs, and runway funding. 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. Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward. Consultation with Arkane remains underway and is expected to continue through the end of the year.
Today, our focus should be on supporting those affected and treating one another with care and respect. I will spend time with our studios over the next week. At our October 6 town hall, we will come together as an ALL-XBOX team to reflect on our progress and look ahead to one of the strongest game lineups in our history.
Matt