Xbox Layoffs and Restructuring: First-Party Studios Cut From 14 to 4, Halo Moves to Activision

In September 2026, Microsoft chief content officer Matt Booty announced in an internal letter the cutting of 268 positions, moving Rare and World's Edge to Activision, placing Obsidian under Bethesda, merging Turn 10 into Playground, and handing the next Halo to Activision. Over five years Microsoft's Xbox first-party studios shrank from a peak of 14 to 4, leaving The Coalition, inXile, Playground and XGS Publishing, while Ninja Theory faces consultation over a proposed closure after two deals fell through. A top community comment said it feels more like Activision acquired Xbox than the reverse.