Microsoft’s “reset” of the Xbox business continued today with the announcement of another giant wave of changes and restructuring to help the business become more successful in the future, or at least that’s the plan. The major moves included more layoffs, the planned closure of another developer, and a significant shakeup for the Halo franchise, among others.
These major changes were announced just before Microsoft’s fiscal Q1 ends on September 30. Here’s everything we learned:
Layoffs
To begin with, Xbox boss Matt Booty said there will be a further 268 layoffs that affect Halo Studios, other first-party developers, and the Xbox Game Studios management and central functions team.
This latest round of cuts comes after Microsoft laid off 1,600 Xbox developers in July, including the studios it divested of. With these cuts, Microsoft is now about 3/4 of the way through its planned restructuring of Xbox, so more changes are still to come.
“I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them,” Booty said.
Halo goes to Activision
Another major change is that Activision is expanding its remit to now cover developers Rare and World’s Edge. Additionally, Activision is making the next Halo game, and it’s being made by a “new, purpose-built team.” This is separate from Activision’s ongoing plans for annual Call of Duty games.
Going forward, only a “small team” at Halo Studios will continue, focusing on “supporting the Halo community and games in-market,” Booty said.
Bethesda expands
Another big piece of news is that Bethesda is growing its footprint and will now cover Obsidian. That team’s in-development projects will continue, including Grounded and a new Fallout game in production alongside Bethesda Game Studios.
King’s kingdom grows
King, the developer of the juggernaut Candy Crush, will now cover Microsoft Casual Games. This will unite two of Microsoft’s “global leaders in casual game design and live operations,” Booty said.
Forza United
Microsoft’s Forza developers, Playground and Turn 10, are now merging to become one studio that will focus on the Forza and Fable franchises. “These two studios have been creative and franchise partners for over a decade, and today’s changes will formally move their work into one team,” Booty said.
State of Decay 3
Microsoft also confirmed that Undead Labs, the developer of State of Decay 3, found a “new publisher” and the game will launch into Xbox Game Pass on day one whenever it’s released. The identity of the publisher remains a mystery.
Ninja Theory could close
Booty confirmed that “two separate agreements” for UK-based developer Ninja Theory to be sold “fell through.” As a result, Microsoft is now entering the UK-mandated consultation period with Ninja Theory regarding the proposed closure of the studio. At the same time, Booty said Microsoft hasn’t given up on its attempts to keep Ninja Theory alive in some form, saying it continues to “explore other paths forward.”
Arkane remains in consultation
Arkane Lyon, the French developer behind the Dishonored series, remains under consulation pursuant to French labor laws. This process is expected to “continue through the end of the year,” but there is no word on what could happen next.
Next update in October
Finally, Booty said there will be an internal town hall event at Xbox on October 6, during which Microsoft will “reflect on our progress.” He also said Microsoft has one of the “strongest game lineups” in Xbox history, but did not divulge any specifics.
All of this is happening under the leadership of Xbox CEO Asha Sharma, who took over that job from Phil Spencer earlier this year. She made drastic changes right out of the gate in a variety of ways, including cutting the price of Xbox Game Pass and removing new Call of Duty games from the service. She also discussed plans for a return to exclusivity for big games. She also outlined her plan to “reset” Xbox, including mass layoffs, game cancellations, and studio closures.
