Xbox Cut 268 Jobs. Activision Will Make the Next Halo.

Playground and Turn 10 become one Forza and Fable studio, and Xbox proposes closing Ninja Theory after two sale deals fell through.

Microsoft is eliminating 268 jobs across its Xbox game studios, and the next Halo game will be built at Activision rather than at Halo Studios. Both changes went out on September 22, 2026, in a memo to Xbox employees from Matt Booty, published in full on Xbox Wire, the company's own news site. Xbox hasn't said how the 268 roles break down by studio, beyond Halo Studios, other first-party teams and the management and central functions layer above them.

At one studio the number could end up being everyone. Two separate agreements to sell Ninja Theory fell through, Booty wrote, and Microsoft will now begin consultation with that studio's employees on a proposed closure while it keeps looking at other options.

Counting everything done since July, including the studios already handed off, Xbox is roughly three-quarters through the restructuring it announced earlier in the year, according to the memo.

The rest of Tuesday's news was the org chart. Four of the larger game businesses absorb smaller ones:

• Activision takes on World's Edge and Rare, and will develop the next Halo with a new team Booty described as purpose-built and kept separate from Call of Duty.
• Bethesda takes on Obsidian, which keeps its current slate, including Grounded and a new Fallout project made with Bethesda Game Studios.
• King takes on Microsoft Casual Games.
• Playground and Turn 10 merge into a single studio covering Forza and Fable, after more than a decade working as partners.

A small team stays at Halo Studios, supporting players and the games in market.

The divestitures are landing unevenly. Compulsion and Double Fine went back to their own management in August with their intellectual property, back catalogs and operating funding, Booty wrote. Undead Labs has since transitioned on similar terms, and the memo says State of Decay 3 will arrive on Game Pass on day one under a new publisher, per the Xbox Wire post. Consultation with Arkane is still underway and is expected to run through the end of the year.

"Today, our focus should be on supporting those affected and treating one another with care and respect," Booty wrote to staff.

He told employees he'd spend the coming week with the studios. The company's next scheduled moment together is an all-Xbox town hall on October 6, which Booty said would look ahead to one of the strongest game lineups the company has had.

Source: news.xbox.com, retrieved September 22, 2026.