Xbox has announced another major restructuring, combining studios and cutting a further 268 jobs. The company is working towards roughly 3,200 job losses over a year.
The changes place Halo under Activision as Halo Studios is reduced to a support team. Rare and Age of Empires developer World’s Edge will also report through Activision, while Obsidian moves under Bethesda. Turn 10 and Playground are merging, and Ninja Theory has entered consultation.
Joost van Dreunen, an NYU Stern professor and author of SuperJoost Playlist, described the process as “a reverse acquisition in slow motion”.
“The publishers Xbox spent a fortune acquiring are now absorbing the studios Xbox built,” he wrote.
The restructuring is part of a broader shift in Xbox’s identity, with analysts questioning whether the business can still operate effectively as both a console platform holder and a major multiplatform publisher. For more industry coverage, visit the RETROCADE Arcade Blog.
An identity crisis for Xbox
Rhys Elliott, head of market analysis at Alinea Analytics, and James McWhirter, a senior analyst at Omdia, both pointed to competing priorities within Xbox. Elliott argued that the company has become a publisher first and a platform second. McWhirter instead saw Xbox being pulled in both directions.
“It still wants to be a console platform holder, yet its expanded remit as a multiplatform publisher has weakened its ability to compete with Sony and Nintendo on the same level,” McWhirter said.
McWhirter added that Game Pass was intended to expand Xbox’s audience, but has shifted spending away from full-price purchases and towards subscription revenue. In his view, Xbox’s first-party portfolio has not reached its potential because of these conflicting objectives.
Some of the studio combinations do have a clear strategic rationale. Manu Rosier, Newzoo’s director of market intelligence, noted that several smaller teams are being placed alongside larger groups with related genre expertise: Activision leads shooters, Bethesda leads role-playing games, King leads casual games, and Playground leads racing.
Rosier said that assigning one leadership group to each genre could help coordinate releases, reduce internal competition for the same players and prevent gaps in the release calendar.
Newzoo data shows that, since January 2025, players of Obsidian’s Avowed and The Outer Worlds 2 were more than three times as likely as the average player to also play Bethesda’s Starfield or The Elder Scrolls IV: Oblivion Remastered. However, Avowed and The Elder Scrolls IV: Oblivion Remastered launched only two months apart in 2025.
With PC and console playtime flat in 2025, new releases generally take time away from existing games. Rosier believes that, in such a competitive market, publishers may benefit from making fewer bets and placing each one with the most experienced team.
He compared the approach with Ubisoft’s decision to organise its studios into five genre-based Creative Houses in January 2026, and Electronic Arts’ creation of a Battlefield Studios group containing four teams, including Criterion and Motive, in 2025.
What Activision taking over Halo could mean
Van Dreunen believes Activision’s new responsibilities show the direction of the restructuring particularly clearly. Halo, Rare and World’s Edge now report to Rob Kostich, putting Microsoft’s flagship franchise, its longest-held British studio and its leading real-time strategy series inside the publisher Microsoft acquired for $69 billion three years ago.
He characterised the reduction of Halo Studios to a support team as an admission that 15 years of in-house stewardship had not delivered the desired result. The new strategy is effectively a bet that the organisation behind Call of Duty can revive Halo through the same large-scale publishing operation.
Rosier suggested that Halo and Call of Duty could potentially “take turns”. Newzoo data indicates that shooters’ share of PC and console playtime fell from 39.6% to 34.8% in 2025, while both Fortnite and Call of Duty declined.
That puts additional pressure on the annual Call of Duty release. Rosier noted that fewer than 3% of Call of Duty players also played Halo Infinite since January 2025, suggesting the two franchises reach substantially different audiences.
Halo has never followed an annual release schedule, and its last two mainline games arrived six years apart. Under the leadership responsible for shipping Call of Duty every year, one possible outcome is an alternating schedule that gives Xbox a second major shooter without asking Call of Duty to carry that role alone.
Rosier said Rare and World’s Edge are harder to explain through genre alignment. Sea of Thieves and Age of Empires sit outside Activision’s shooter focus, making the move appear to be more about publishing scale than creative compatibility.
Elliott was similarly sceptical. He called the decision to place Halo with Activision and reduce Halo Studios “essentially a demotion”, pointing out that Halo was once the franchise that sold Xbox consoles.
He said Alinea’s data showed that the Campaign Evolved remake performed respectably, but fell well short of what Halo once represented. He also noted that the absence of online multiplayer was a factor.
In Elliott’s view, Rare and World’s Edge appear to have been moved for Activision’s publishing strength rather than a natural creative fit. Sea of Thieves and Age of Empires have little in common with Call of Duty beyond now operating within a group trusted to work at scale.
Ninja Theory raises the biggest concerns
Analysts had less certainty about Ninja Theory because the details surrounding two failed sale agreements for the studio remain unclear. Rosier suggested that investors may be cautious about single-player games serving niche audiences.
Van Dreunen called the Ninja Theory situation the most troubling part of the announcement. In his assessment, two collapsed sale agreements involving the studio behind Hellblade suggest that the 2018 acquisition programme secured talent that has proved expensive to maintain and difficult to sell.
He said Asha Sharma is making Xbox smaller by reducing the number of studios, removing management layers and assigning franchise responsibility to labels with a record of shipping on schedule.
Dr Serkan Toto of Kantan Games was not surprised by the scale of the changes. He said he had predicted earlier in 2026 that Sharma would move through the Xbox business “like a bulldozer”.
Toto’s main concern is that studios could lose their identity and creative character when combined with larger organisations, including Halo with Activision and Obsidian with Bethesda. He also fears the new structure could make it easier to sell or close studios if the strategy fails.
“Success is not guaranteed,” Toto said. “If this restructuring does not work, we might look at even more pain in the years going forward.”
His conclusion was stark: Project Helix must succeed. The outcome will shape not only Xbox’s studio structure, but also the future of some of its most recognisable game franchises.
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