Xbox Cuts 268 Jobs as Studio Network Shrinks
Microsoft's second wave of layoffs closes Ninja Theory and shifts major franchises to Activision and Bethesda.
Key points
- Xbox cut 268 jobs in September, closing Ninja Theory and continuing the sale of Arkane.
- Activision is absorbing World's Edge, Rare, and the next Halo game as part of the restructure.
- Bethesda will oversee Obsidian, while King takes control of Microsoft's casual mobile game label.
Microsoft has completed a second round of staff reductions at Xbox, cutting 268 positions as part of a broader plan to eliminate 20% of its workforce. This move follows an initial wave in July that saw several studios leave the company and others undergo deep cuts, signaling a fundamental shift in how the gaming division operates.
Chief Content Officer Matt Booty confirmed that the restructuring is still underway, with the company roughly three-quarters of the way through the process. The result is a significantly smaller Xbox Game Studios division, with its core responsibilities being redistributed to other major publishers under the Microsoft umbrella.
Ninja Theory faces closure
One of the most significant outcomes of the September cuts is the impending shutdown of Ninja Theory. According to Polygon.com, the studio is facing closure after failing to secure a buyer. Meanwhile, negotiations to sell Arkane are still ongoing, with Microsoft hoping to finalize that transaction by the end of 2026.
The trade-off for these closures is a consolidation of talent and projects under existing publishers. By shedding independent studio identities, Microsoft aims to streamline its publishing pipeline, though this leaves fewer distinct creative voices within the first-party lineup.
Activision absorbs key franchises
Activision is emerging as the primary beneficiary of the restructuring, having avoided layoffs in both the summer and September rounds. The publisher is now taking on World's Edge, Rare, and the development of the next Halo game. This shift effectively reduces Halo Studios to a small support team, integrating the flagship franchise into Activision's broader portfolio.
Blizzard is in a similar position, continuing to avoid major cuts while preparing for upcoming releases in World of Warcraft, Diablo, and Starcraft. With these titles slated for launch over the next few years, both Activision and Blizzard are positioned to shoulder the bulk of Xbox's first-party output.
Bethesda takes on Obsidian
Bethesda is also absorbing new responsibilities despite having faced significant layoffs in its own studios earlier this year. The publisher will now oversee Obsidian, which is currently working on the next Fallout game. This move aligns with Bethesda's ongoing development of The Elder Scrolls 6, consolidating key RPG titles under one banner.
Additionally, King, the developer behind Candy Crush, will now lead Microsoft Casual Games. This includes managing titles like Solitaire and Mahjong, indicating a strategic focus on casual mobile gaming to diversify revenue streams beyond high-budget console titles.
