Last night, Xbox Executive Vice President Matt Booty issued an open letter to all Xbox employees outlining the latest developments in the company’s ongoing “major restructuring.” Key updates include the assignment of the next Halo title to Activision for development, while Age of Empires developer World’s Edge and Sea of Thieves developer Rare will be integrated into Activision Blizzard. Obsidian will be merged into Bethesda. Microsoft Casual Games will be integrated into King to consolidate the casual gaming business. Playground and Turn 10 will merge into a single studio. Meanwhile, Ninja Theory will be closed. The full text of Matt Booty’s open letter follows below.
I am writing to share several updates regarding the Xbox restructuring plan announced earlier this year.
First, we are eliminating 268 positions across Halo Studios, other first-party studios, and XGS management and central functions. With the adjustments made since July—including studio divestitures—we have now completed approximately three-quarters of the previously announced restructuring plan. I am deeply grateful for everything these colleagues have achieved, and I recognize that today is incredibly difficult for those leaving and for the teams around them.
Second, we are realigning the organizational structure of our studios. Our goal is to strengthen our games and franchises by reducing the number of business units, integrating teams that already collaborate closely, and further centralizing our publishing expertise.
Activision’s scope will expand to include World’s Edge and Rare. Activision will also take charge of developing the next Halo title, led by a newly formed team that will operate entirely independently of current Call of Duty development and future planning. A small team at Halo Studios will continue to support the Halo community and currently active games.
Bethesda’s scope will expand to include Obsidian. Obsidian will continue to advance its existing projects, including Grounded and a new Fallout project developed in collaboration with Bethesda.
King’s scope will expand to include Microsoft Casual Games, bringing together two world-leading teams in casual game design and live operations. Playground and Turn 10 will merge into a single studio focused on the Forza and Fable franchises. Having collaborated as creative and IP partners for over a decade, the two studios will now formally integrate their operations into one team.
Third, regarding the studio spin-offs: Compulsion and Double Fine returned to their respective management teams this past August, retaining their IPs, back catalogs, and the funding needed for future operations. Undead Labs has now successfully completed a similar transition and, with support from a new publisher, will bring State of Decay 3 to Game Pass on day one.
Regrettably, the two independent deals we previously pursued for Ninja Theory did not materialize. We are now initiating consultations with staff regarding the proposed closure of the studio, while continuing to explore other potential options. Consultations regarding Arkane are ongoing and are expected to continue through the end of the year.