Every Xbox Studio’s Current Status After Multiple Rounds of Layoffs
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On July 6, Xbox announced a massive overhaul of its business. The changes would see the company shedding thousands of jobs as it looked to cut 20% of its organization over 12 months. That plan started with a handful of studios leaving the Xbox banner, while others faced deep cuts. The second phase of that operation rolled out on Sept. 22, and it saw Xbox taking similarly drastic measures. In a message shared to Team Xbox employees, chief content officer Matt Booty explained that Xbox was cutting an additional 268 jobs as it continues to restructure its publishing efforts. Booty also revealed that Ninja Theory faces closure after struggling to find a buyer, while talks to offload Arkane are still ongoing.
There’s a lot of information to sort through. The move sees Xbox Game Studios shrinking to the brink of non-existence, while Activision and Bethesda will shoulder more responsibility as Xbox’s primary publishers. Considering that Booty says that Xbox is only three-quarters of its way towards finishing its restructuring process, it’s safe to say that Xbox will look like an entirely different company next year than it did heading into 2026. Here’s the status of every remaining Xbox studio, following both rounds of layoffs.
Activision
One thing that’s been clear from Xbox’s restructuring so far is that Activision is only becoming more integral to the business. After being largely untouched by layoffs this summer, Activision avoided cuts for a second time. Instead, the publisher is now inheriting World’s Edge and Rare under its banner. On top of that, Activision is also set to become the new home for Halo. The studio is working on the series’ next game, as Halo Studios has been virtually reduced to a small support team according to Game File.
Blizzard
Blizzard is in a similar boat with Activision. It continues to avoid major cuts, as Xbox seems more focused on trimming down Xbox Game Studios rather than the other major publishers it owns. It’s not too surprising for Blizzard: The studio just came off an announcement-filled Blizzcon. With new World of Warcraft, Diablo, and Starcraft games coming, as well as some multimedia IP deals, Blizzard is now positioned to become a workhorse for Xbox over the next four years, when Starcraft is currently scheduled to launch.
King
One quiet change that came out of this summer’s layoffs was the fact that Candy Crush developer King would begin reporting directly to then-new Xbox CEO Asha Sharma. So it’s not too surprising that the studio is getting more responsibility in the September shakeup. Microsoft Casual Games will now be under King’s “remit,” consolidating a lesser-discussed part of Microsoft’s gaming business. If you’ve never really heard of Microsoft Casual Games, it’s the label that manages games like Solitaire and Mahjong. With King now leading the charge, expect Microsoft to double down on its casual mobile offerings.
Bethesda
It’s been very up and down for Bethesda since Xbox’s rest began. This summer, the publisher’s studios were hit hard; Id Studios and ZeniMax Online Studios both faced significant layoffs that impacted Doom and The Elder Scrolls Online. On top of that, Xbox announced that it was looking to sell Arkane. According to Booty’s September message, Xbox has yet to secure a buyer, but that process will continue through the end of 2026. This time around, Bethesda is getting more responsibilities hoisted upon its shoulders. The publisher will now Obsidian, which faced job cuts this summer. The move makes logical sense considering that Xbox has since confirmed that Obsidian is working on the next Fallout game as Bethesda itself continues to make the long-awaited Elder Scrolls 6.
Halo Studios
Perhaps the biggest news out of September’s Xbox layoffs is the changes at Halo Studios. A good chunk of the 268 jobs Xbox cut this time around came from this team, with the rest affecting “other first-party studios” and Xbox Game Studios management. That comes just a few short months after the launch of Halo: Campaign Evolved, which included a tease of a Halo 2 remake. While the studio still exists, it seems as though it will function as a support studio for Activision as it creates its own Halo game. It’s currently unclear how many people are left at Halo Studios and what exactly the remaining team will focus on.
The Coalition
The Coalition is one of the few studios remaining under the Xbox Game Studios banner — for now, at least. Considering that the Gears of War studio is weeks away from shipping its latest game, Gears of War: E-Day, it makes sense that Xbox wouldn’t make any drastic changes at the studio right at the finish line. But with more cuts looming, it certainly seems like The Coalition’s future will rest on E-Day‘s success. It’s not hard to imagine the shooter series, with or without The Coalition, getting moved to Activision’s control down the line. But for now, The Coalition is continuing on as normal.
Mojang Studios
Like King, Minecraft developer Mojang Studios began reporting directly to Asha Sharma this summer. And like King, the studio appears to be in a safe position as one of the few remaining developers under Xbox’s banner. Granted, it’s unclear if the studio was subject to any cuts considering that Booty did note that some “first-party studios” were impacted. There aren’t many of those left, so it’s possible that studios like Mojang and The Coalition were subject to layoffs. Mojang Studio’s next game, Minecraft Dungeons 2, is set to launch on Sept. 29.
Playground Games and Turn 10 Studios
In another bit of consolidation, Xbox is bringing Playground Games and Turn 10 Studios together. That move feels like a long time coming considering that they both work on separate Forza franchises, and Turn 10 was significantly impacted by layoffs in 2025. The move continues to signal that Forza is a major priority for Microsoft, which isn’t too surprising given that Forza Horizon 6 has been one of Xbox’s few true success stories in recent years.
Rare
Rare’s future remains somewhat of a mystery, as it is moving under Activision. What exactly the team is working on aside from Sea of Thieves is anyone’s guess, considering that Everwild is off the table. Rare suffered layoffs back in 2025 as part of Everwild‘s cancellation, so it’s already operating in a smaller form. Considering that Xbox is squarely focused on IP right now, it’s certainly not impossible that Xbox could be eyeing Rare’s dormant Banjo-Kazooie IP for a revival, but all we have is speculation at this stage.
inXile Entertainment
inXile Entertainment is in the same precarious position that The Coalition is currently in. The studio is currently working on Clockwork Revolution, which is being positioned as one of Xbox’s major 2027 games alongside Fable. As a new IP, it’s a very risky move for an Xbox that is trimming away risks. With more layoffs looming, it’s hard not to have a sinking feeling that inXile’s future will hinge on one game. Even if it is a success, you can likely expect some changes at inXile eventually, considering that it’s one of the few studios left under Xbox Game Studios, a label that Xbox seems to be winding down.
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