Activision will make the next Halo, and Ninja Theory faces a proposed closure

Xbox has redrawn its studio map again. A post on Xbox Wire on 22 September reproduces a message just sent to Xbox employees worldwide, and it carries three pieces of news: 268 roles are being eliminated, the number of business units is shrinking, and the studios Xbox had been trying to divest now have outcomes [1]. This article reflects the situation as of 22 September 2026.

The cuts span Halo Studios, other first-party studios, and the management and central functions layer of Xbox Game Studios (XGS). The memo says the actions taken since July, studio divestitures included, put the company roughly three-quarters of the way through the restructuring it had already announced [1]. That restructuring was first laid out in the Resetting XBOX post on the same site on 6 July [2].

A new team, walled off from Call of Duty, gets Halo

For players, Halo is the headline. The next Halo game will be developed by Activision, led by a team built specifically for it. The memo stresses that this team is separate from ongoing Call of Duty development and plans. A small team stays at Halo Studios to keep supporting the Halo community and the Halo games already on sale [1].

Activision also picks up two more groups: World’s Edge and Rare [1]. World’s Edge is the team behind the Age of Empires series, and Rare is the studio that made Sea of Thieves.

Forza and Fable now share one studio

The rest of the reorganisation folds together groups that were already working side by side. The stated goal is to strengthen the franchises by running fewer business units and concentrating publishing expertise [1].

Playground Games and Turn 10 become a single studio focused on the Forza and Fable franchises. The memo describes them as creative and franchise partners for more than a decade, and says the change formally moves their work into one team. Obsidian joins Bethesda, where it will continue its current projects, Grounded among them, as well as the new Fallout project it is making with Bethesda Game Studios. King takes on Microsoft Casual Games, bringing together the two groups that led casual game design and live operations [1].

Studios that left, and the ones still waiting

The divestitures went two ways. In August, Compulsion Games and Double Fine returned to their own management, taking their IP, back catalogues and runway funding with them. Undead Labs has now completed a transition on similar terms and, with a new publisher, will release State of Decay 3 on Game Pass on day one [1].

Ninja Theory, the studio behind the Hellblade series, saw two separate agreements fall through. Xbox will now begin consultation with employees on a proposed closure while it keeps looking for other paths forward. Consultation with Arkane is still underway and is expected to run through the end of the year [1].

The next date on the calendar is an all-Xbox town hall on 6 October, where the memo says staff will review progress and look at the upcoming game lineup [1]. The memo does not name the new Halo game or give it a release window, and it does not say who the new publisher of State of Decay 3 is.

Sources

[1] Xbox. Continuing Our Reset. Xbox Wire, 22 September 2026.

[2] Xbox. Resetting XBOX. Xbox Wire, 6 July 2026.