Xbox's 'Reset' Cuts 268 More Jobs as Activision Absorbs Halo and Rare

Key points

• Xbox eliminated 268 roles across studios and management, reaching roughly 75% of its planned 3,200 job cuts.
• Activision now oversees Halo, Rare, and World's Edge, with a new team developing the next Halo title separate from Call of Duty.
• Obsidian is moving under Bethesda, while Playground and Turn 10 merge into a single studio for Forza and Fable.
• Ninja Theory is entering consultation for potential closure after two failed sale agreements, while Arkane remains in consultation.
• Undead Labs has transitioned to a new publisher, with State of Decay 3 set to launch on Game Pass day one.

Background

This restructuring follows Microsoft's acquisition of Activision Blizzard for $69 billion in 2023 and a broader 'reset' announced earlier in 2026. Previous cuts in July eliminated approximately 4,800 employees globally, with Xbox aiming to reduce its workforce by 20% by the end of the fiscal year. The division has also recently celebrated its 25th anniversary and expanded Game Pass offerings.

How outlets are covering it

Analysts view the moves as a 'reverse acquisition' where Activision absorbs Xbox's legacy studios. Rhys Elliott of Alinea Analytics calls the Halo move a 'demotion,' noting the franchise's decline. James McWhirter of Omdia highlights Xbox's identity crisis between being a platform and a multiplatform publisher. Manu Rosier of Newzoo sees logic in genre-based consolidation, comparing it to Ubisoft's and EA's recent reorganizations. Dr. Serkan Toto of Kantan Games warns that studios may lose their identity and that 'Project Helix must absolutely hit' to justify the changes.

Why it matters

The consolidation signals a shift from aggressive acquisition to efficiency and genre-based management. It tests whether Activision's publishing model can sustain iconic Xbox franchises like Halo. The potential closure of Ninja Theory and ongoing consultations with Arkane indicate significant financial pressure and a focus on reducing overhead in a competitive market.

What to watch

Xbox will hold a town hall on October 6 to review progress. Consultations with Arkane are expected to continue through the end of 2026. The next Halo title is in development under Activision, and State of Decay 3 will launch with a new publisher. Further decisions on Ninja Theory and other studios may follow as the restructuring nears completion.