Xbox Restructuring Likely Kills New Age of Empires Game

Key points

• Microsoft eliminated 268 roles across Halo Studios, other first-party studios, and management layers, bringing the company roughly three-quarters of the way through previously announced restructuring.
• World's Edge, the studio overseeing the Age of Empires franchise, lost at least half its staff, including key figure Adam Isgreen, and was moved under Activision.
• Employees confirmed that a new project at World's Edge was cancelled, likely a new Age of Empires game.
• The Halo franchise is being transferred to Activision, which will develop the next Halo title with a new, purpose-built team.
• Other studio reorganizations include Obsidian joining Bethesda, Turn 10 and Playground Games merging, and King absorbing Microsoft Casual Games.

Background

This is part of a broader Xbox restructuring that has been ongoing since earlier in 2026. In July, Microsoft laid off 1,600 employees. The company has also been divesting studios, including Compulsion, Double Fine, and Undead Labs. The restructuring is part of a broader effort to improve profitability and focus on key franchises.

How outlets are covering it

Kotaku emphasizes the likely cancellation of a new Age of Empires game, citing employee statements and the gutting of World's Edge. Xbox Wire provides the official statement from Matt Booty, detailing the 268 layoffs and studio reorganizations, including the transfer of World's Edge and Rare to Activision. Aftermath criticizes Microsoft's lack of a long-term plan, describing the restructuring as a 'panic and pivot' approach that has damaged studios with decades of accumulated expertise. Windows Central provides a detailed breakdown of the studio reorganizations, including the transfer of Halo to Activision and the merger of Turn 10 and Playground Games.

Why it matters

The cancellation of a new Age of Empires game and the transfer of the Halo franchise to Activision are significant for the gaming industry. They signal a major shift in Microsoft's strategy, moving away from developing new games in-house and instead focusing on existing franchises and partnerships. This could have long-term implications for the future of the Age of Empires and Halo series, as well as for the broader gaming industry, which is already facing a wave of layoffs and restructuring.

What to watch

Microsoft will continue its restructuring, with an October 6 town hall planned to reflect on progress and look ahead to the future. The company will also begin consultation with employees at Ninja Theory, which is facing potential closure. The next Halo title will be developed by a new team at Activision, and World's Edge will continue to oversee the Age of Empires franchise under Activision's umbrella.