#Industry

Fenris Creations, Embark, Warhorse, and Wargaming Headline the AI and Games Conference 2026 | 23/09/26

State of Decay 3 studio Undead Labs lays off a significant number of staff after going independent from Xbox

Undead Labs, the studio behind State of Decay 3, has laid off a significant number of staff after announcing it is becoming an independent, employee-owned studio. In a LinkedIn post the studio said the departing developers had poured years into the State of Decay franchise and offered to connect them with other studios hiring. Microsoft had announced plans in July to split with five studios including Undead Labs, and Double Fine, Compulsion Games, Ninja Theory and Arkane have since faced layoffs, a pivot to co-development, possible closure or continued consultation.

Age of Empires studio World's Edge reportedly loses nearly half its staff and a new game project in Xbox layoffs

A verified creative director posted on ResetEra that World's Edge, the studio that manages the Age of Empires series, lost just under half its staff as it moved from Xbox's direct control to Activision. World's Edge creative director Adam Isgreen wrote on LinkedIn that he and many colleagues were among the 268 staff cut in Xbox's latest round, and senior software engineer Andrew Martz said "our next project" was shelved as a result of the Activision move. The 268 cuts are part of a months-long "reset" of Microsoft's games business led by new Xbox CEO Asha Sharma, after around 1,600 layoffs in July, with totals expected to reach an estimated 3,200.

Xbox lays off Gears of War: E-Day story director two weeks before launch

Gears of War: E-Day story director Juan Vaca announced on LinkedIn that he was part of Microsoft's latest round of layoffs, roughly two weeks before the game's 6th October release. He joined developer The Coalition in 2022 and had posted five days earlier celebrating the game going gold. Kotaku, citing an anonymous source, reported fewer than a handful of developers were cut at The Coalition for reasons apparently unrelated to Xbox restructuring, while 268 developers were laid off across Xbox overall.

State of Decay studio Undead Labs goes independent and worker-owned as it leaves Xbox, laying off a significant number of staff

State of Decay developer Undead Labs has left Microsoft to become an independent, worker-owned studio amid Xbox's latest round of cuts, but said on LinkedIn it is also laying off a significant number of colleagues. Microsoft said this summer it had found a buyer for the studio without naming them. State of Decay 3 is still in development, targeting a closed beta before the end of the year and a 2027 release, and remains a Game Pass title with a new unnamed publisher, coming to Xbox, PC and PlayStation.

Undead Labs confirms it is now an employee-owned studio, with a significant number of layoffs

Undead Labs announced it has completed its separation from Xbox and is now operating as an employee-owned game development studio, with a significant number of employees made redundant. The studio said development of State of Decay 3 remains actively underway, with a 2027 launch planned for Xbox, Game Pass, PC and PlayStation and a closed beta before the end of the year. The move came as Microsoft eliminated 268 positions across its first-party studios and shifted Rare and the Halo franchise to Activision.

Xbox Game Studios started 2026 with 12 studios plus publishing

The PC/Console market hit $30 billion last year across Playstation, Xbox, and Steam.

Microsoft proposes closing Hellblade developer Ninja Theory after failing to reach a deal with buyers

Microsoft is proposing to close Hellblade developer Ninja Theory after failing to reach an agreement with buyers, and will begin consultation with employees on the proposed closure. Xbox chief creative officer Matt Booty said in a memo that two separate agreements for Ninja Theory fell through while the company continues to explore other paths forward. The move comes in a round of Microsoft cuts that saw Xbox lay off 268 people, with Undead Labs successfully sold to undisclosed buyers.

Microsoft hands Halo to Activision, demotes Halo Studios to a support team amid 268 layoffs

Microsoft has placed the Halo series under Activision, with a new purpose-built team separate from Call of Duty development making the next Halo game, while Halo Studios becomes a small team supporting existing Halo games. The company is laying off 268 people across Halo Studios, other first-party studios and the XGS management and central functions layer, and it is not yet clear who is affected. The move follows July's announcement of 1,600 job cuts, part of plans to reduce the workforce by 3,200 over the financial year.

Today's Xbox studio consolidation might bring a new Halo sooner, but history shows production line development makes for boring games

Xbox is consolidating its studios and moving the Halo series to Activision with 268 team members, aiming to push out its biggest franchises like Fallout and Halo more quickly. The article argues that chasing an annual Call of Duty-style release pace wears down individual studios' quirks and flattens innovation, as Ubisoft's years of annual Assassin's Creed releases showed before the publisher dropped the yearly cadence.

Xbox lays off 268 people as Activision takes over Halo and Rare, Obsidian joins Bethesda

Xbox is cutting 268 roles across Halo Studios, other first-party studios and the XGS management and central functions layer. Activision takes custody of the Halo series along with Age of Empires developer World's Edge and Sea of Thieves maker Rare, while Obsidian moves into Bethesda and Playground Games merges with Turn 10 Studios. Ninja Theory is consulting on a likely closure and Arkane's future is expected to be discussed through the end of the year.

Xbox Lays Off 268 More People, Hands Halo Series to Activision

Xbox announced it is cutting 268 roles across its first-party studios, XGS management, and central functions, with Halo Studios significantly affected. In an Xbox Wire post titled Continuing Our Reset, Xbox content chief Matt Booty said Activision will expand its remit to World's Edge and Rare and form a new internal team to develop the next Halo title, while a small team at Halo Studios continues supporting the community and in-market games. The post also details studio reshuffles including Bethesda absorbing Obsidian, King taking on Microsoft Casual Games, and Playground and Turn 10 merging, plus divestitures in which Compulsion and Double Fine spun off, Undead Labs signed with a new publisher, and Ninja Theory and Arkane face proposed closures.

Microsoft confirms 268 more Xbox layoffs, studio restructuring, and Obsidian moving under Bethesda

Microsoft confirmed a new Xbox restructuring round with 268 more layoffs affecting Halo Studios, other unnamed first-party studios, and Xbox Game Studios' management and central functions. Rare and World's Edge now fall under Activision, Playground and Turn 10 will combine on Forza and Fable, and Bethesda will oversee Obsidian, which continues work on Grounded and a new Fallout project with Bethesda Game Studios. The next Halo game will be developed by a new Activision team, while Ninja Theory faces proposed closure and Arkane consultation is expected to continue through the end of the year.

Added a statement from Activision's president regarding Halo, says they've "begun assembling" a team for the next Halo.

Escape From Tarkov Dev Bets on 'Risky' Games With New Publishing Arm

Battlestate Games Publishing, the new publishing arm of Escape from Tarkov developer Battlestate Games, aims to support "hardcore" and "risky" projects, COO Nikita Buyanov said. The label has already received more than 100 pitches, with "maybe five to ten games" already suitable. Buyanov said the effort is more of an experiment focused on risky ideas than potential profits.

Xbox continues reset with Halo Studios layoffs and Undead Labs divestment

Xbox has laid off another 268 employees as part of the restructuring it began in July 2026, affecting Halo Studios, other first-party teams, and the Xbox Game Studios management and central functions layer; Matt Booty said the division is roughly three-quarters of the way through the previously announced restructuring. Undead Labs has transitioned out of Xbox on terms similar to Double Fine and will release State of Decay 3 day one on Game Pass with a new publisher, while Ninja Theory faces a proposed closure and Arkane remains in consultation. Xbox is also merging internal studios, moving Rare and World's Edge under Activision, placing Obsidian under Bethesda, adding Microsoft Casual Games to King, and combining Playground Games and Turn 10, with Activision developing the next Halo led by a new purpose-built team.

Hellblade developer Ninja Theory enters closure consultation in new wave of Xbox cuts

Xbox chief content officer Matt Booty announced on the Xbox Wire blog that Ninja Theory has entered employee consultation over a proposed closure after two separate agreements fell through. The studio was developing Senua, a new Hellblade entry announced at the June Xbox Games Showcase, and was put up for sale by Microsoft within a month of its reveal. Booty said he will spend the next week with Xbox studios and hold an all-Xbox town hall on October 6.

NEW: Nearly 300 more jobs cut at Microsoft's gaming team (part of 3,200 announced in July). Majority at Halo Studios, reduced to support

As part of the continuing reset of the business, XBOX will is eliminating 268 roles across Halo Studios, other first-party studios, and t...

Microsoft restructures Xbox: next mainline Halo moves to Activision as Halo Studios cuts 268 roles

Microsoft has handed the next mainline Halo game to Activision, which is forming a new purpose-built team separate from Call of Duty, while Halo Studios keeps only a small team supporting existing games and the community. Xbox Studios boss Matt Booty said 268 roles are being eliminated across Halo Studios, other first-party studios, and the XGS management and central functions layer. Activision president Rob Kostich said Halo, Rare, and World's Edge are joining Activision, as Ninja Theory closes and studios including Obsidian and Rare are consolidated under others.

Xbox transfers Rare and Halo to Activision, proposes closing Ninja Theory and cuts another 268 roles

Xbox is transferring Rare and ownership of the Halo franchise to Activision, proposing the closure of Ninja Theory with a staff consultation, and cutting 268 roles in the restructure. Activision will also take on World's Edge and build a new team for the next Halo, Bethesda will absorb Obsidian, Playground and Turn 10 will merge into one studio for Forza and Fable, and Undead Labs has left the business and will release State of Decay 3 day one on Game Pass with a new publisher. Xbox said it is roughly three-quarters of the way through a planned 3,200 job cuts this year.

A buyer for Ninja Theory has fallen through and Xbox will now close Ninja Theory.

Blizzard layoffs reported as imminent, while new Xbox cuts appear to spare Blizzard for now

Bloomberg reporter Jason Schreier said on the 8-4 podcast that Blizzard layoffs are coming and imminent. The latest wave of Xbox cuts involves 268 job losses, with Ninja Theory closed, Halo Studios downsized and Halo development handed to Activision, Obsidian folded into Bethesda, Playground and Turn 10 merged, and Rare moved under Activision, though Blizzard does not appear to be included for now. Microsoft said earlier this year it intended to cut 3,200 roles from the Xbox division, cutting 1,600 immediately and earmarking 1,600 more.

Secret Mode Bets on Two Pillars: Pure Indie and Higher-Budget Games

UK publisher Secret Mode, now independent from Sumo Digital, is targeting two pillars: pure indie titles and higher-budget games like Star Wars: Galactic Racer, due out on October 6. Chief publishing officer James Schall says the company has seen phenomenal growth over the past 18 months. Secret Mode has also taken on publishing and ongoing development for Escape the Backrooms and Chained Together, and opened its own internal studio in Sheffield.

Xbox reportedly set to lay off hundreds more staff and consolidate several game studios this week

The Information reports that Microsoft-owned Xbox is set to cut hundreds more jobs this week and consolidate some of its game studios, including Xbox Game Studios, Bethesda, Activision and Blizzard. Bloomberg reporter Jason Schreier said on the September 18 episode of the 8-4 Play podcast that Blizzard cuts are imminent. In July, Xbox laid off around 1,600 people and parted ways with five studios, with CEO Asha Sharma saying the company would cut 3,200 roles over its next financial year.

Reported second wave of Xbox cuts said to hit this week, with several studios facing consolidation

The Information reported, citing a source briefed on Microsoft's plans, that Xbox is preparing to lay off hundreds more people this week and consolidate several of its studios, without naming which ones. If accurate, it would be the second wave of Xbox layoffs this year after July's restructuring cut 1,600 jobs, when Double Fine Productions and Compulsion Games bought back their independence, Ninja Theory and Undead Labs were sold to unnamed buyers, and Arkane Lyon entered consultation. The cuts are part of Xbox CEO Asha Sharma's plan to reset the gaming division and return it to profitability; she previously said a further 1,600 jobs would be cut within a year.

Xbox reportedly set to announce second round of layoffs this week

Xbox is reportedly preparing a second round of layoffs this week, with a source saying the company will consolidate several of its game studios, according to The Information. VGC reports this could involve mergers or internal changes at Xbox Game Studios, Bethesda, Activision and Blizzard. Xbox had announced plans to cut 3,200 employees in July, with the first round resulting in 1,600 redundancies and the divestment of five internal studios.

Players spot censored LGBTQ content in Marvel's Wolverine in some regions

Players on X and Reddit have spotted that references to the marriage of two non-playable female characters, Mystique and Tyger, appear to be censored in Marvel's Wolverine in some regions. The wedding photo is blurred, voice lines referring to each other as wives are cut, and subtitles are replaced with asterisks. The poster describes this as happening in Middle East versions, though it is unclear whether it applies to every Middle Eastern country or other regions; Sony previously altered LGBTQ content in Marvel's Spider-Man 2 for Saudi Arabia and the United Arab Emirates.

In my latest Game File:

Hideo Kojima describes the scramble to find a new publisher for Physint after Sony pulled funding

In an interview with IGN, Hideo Kojima described the three-month search for new funding and publishing partners after Sony Interactive Entertainment stopped supporting Physint, which ended in a deal with Microsoft-owned Xbox. He said he feared for Kojima Productions' cashflow, moved some Physint developers to the OD team days later, and has not laid off staff. He also mentioned a bank loan taken out after Death Stranding released and pitched Physint as a new IP that could attract film, TV and streaming producers.

Microsoft files patent for a machine learning system that would "train" itself on your playtime to work out when you'll be least annoyed by in-game ads

Microsoft has filed a patent for an in-game advertising system that could use machine learning to read player activity and determine when ads would be least disruptive. The patent, "Contextually Aware Management of Interactive Software Application Access," was filed in April and published by the USPTO on 3rd September. It describes pausing play to show ads at moments like safe locations or after events such as completing a level or defeating an NPC, and possibly letting players earn credits to delay the next ad.

French publisher Dear Villagers confirms layoffs of around 15 staff

French publisher Dear Villagers has laid off around 15 employees, down from a workforce of roughly 20 before the cuts. The company said the downsizing follows a reorganization of operations by its owner Plug In Digital, and that it intends to keep publishing and producing games. A spokesperson said the workforce reduction plan affects approximately fifteen positions and that final figures are not yet available, while impacted employees said on LinkedIn that the vast majority of the team, including almost all of QA, was laid off.

Hideo Kojima recounts Physint's move from PlayStation to Xbox as his studio calls itself healthy and profitable

In an interview with IGN, Hideo Kojima said Sony told him in a June Zoom call that it would no longer fund development of Physint, after which he sought a new publisher and the project landed with Xbox. He said he is not in a dispute with Sony and that work on Physint never stopped, though only a small team stayed on key parts while others moved to the Xbox-published horror game OD. Kojima Productions also issued a statement saying the Bloomberg report's claims about its PlayStation relationship, Death Stranding franchise sales, and Physint production planning came from no official or on-the-record source, and that the studio is in a healthy, profitable state.

Activision cites data claiming cheating in games is an $8.5bn industry; 69% of online multiplayer studios call cheating a "significant or very significant problem"

Activision's Team Ricochet, which runs Call of Duty's anti-cheat efforts, cited data claiming cheating in games is an $8.5 billion industry. An Anybrain-commissioned survey of 250 US and UK developers found 69% of studios consider cheating a "significant or very significant problem," with over half reporting measurable drops in player retention or revenue loss. 76% of respondents have implemented anti-cheat measures, and 88% plan to increase anti-cheat investment over the next 12 months.

Northern Forge Studios and Runaway Play lead Green Games Jam Awards 2026

The 2026 Green Games Jam Awards, hosted by Playing for the Planet, were presented last week at BFI Southbank, with 11 awards handed out and both Northern Forge Studios and Runaway Play taking two each. Northern Forge won Best Small Studio and UNEP's Choice for Orna: The GPS RPG, while Runaway Play earned Best Storytelling for Flutter: Butterfly Sanctuary and Google's Choice for Splash – Fish Aquarium. CD Projekt Red received the Changemaker award and Ustwo Games' Maria Sayans won the Champion accolade, with Rovio Entertainment recognised for Best Fundraising.

Hideo Kojima says he "couldn't understand" why Sony put Physint on its cancellation list

Hideo Kojima told The Washington Post he could not understand why Sony put Physint on its list of cancelled projects, calling it the biggest-selling title he could possibly create. He said Kojima Productions received notice from PlayStation Studios in mid-June that funding would stop, then found Xbox as a new partner, with no layoffs and a small team continuing Physint while others moved to OD. Kojima said Physint's plot and game concept are complete, 3D models of its actors are underway, and the studio's relationship with Sony remains strong.

Chuapp Weekly Industry Roundup: TGS2026 Opens, Phantom Blade Zero Passes 3 Million Wishlists, Aniimo Hits 120,000 Concurrent Steam Players

Chuapp rounds up the week's industry news: TGS2026 opened on September 17 with a five-day run through September 21, featuring 759 exhibitors and 3,946 booths, while Chinese exhibitors fell to 93 from last year. Gamma Data's August report put China's domestic game revenue at 31.627 billion yuan, up 8.08% year on year, with Lord of the Mysteries topping 100 million yuan in first-month revenue. Phantom Blade Zero passed 3 million wishlists, Aniimo hit over 120,000 concurrent Steam players on its PC launch day, and Wardogs sold over 2 million copies within five days of its early access release.

"They've watched so many people lose their jobs, that has an impact" – Managing morale in the wake of layoffs

After years of mass layoffs across the games industry, HR experts say the morale of remaining staff is being overlooked, with some employees having lived through two, three or more rounds of cuts. Emma Smith, formerly of Creative Assembly and now at Hestia Talent Partners, argues studios must rebuild trust through honesty and consistency before motivation can return, while Compulsion Games' Michael Elliott Chan advises regular communication and one-to-one conversations. Both also say career development need not mean promotion, and can include deepening skills or mentoring.

GamesIndustry.biz HR Summit Confirms Sessions on AI Impact, Neurodivergent Teams and Personal Resilience

The GamesIndustry.biz HR Summit has confirmed its first round of facilitated discussion sessions, covering AI people strategy, AI in employment relations, managing neurodiversity in the workplace, and supervision for HR leaders. Sponsored by Amiqus, the event takes place next month at the Royal Institution in London, with tickets including lunch and access to the Best Places To Work Awards UK. Afternoon sessions on building effective people strategies, featuring leaders from key UK studios, will be announced next week.