Microsoft is eliminating 268 Xbox roles and handing development of the next Halo game to Activision, Xbox chief content officer Matt Booty told employees Tuesday in a memo published on Xbox Wire. The memo also said the company will begin consultation on a proposed closure of Ninja Theory after two separate agreements to hand off the studio fell through.
What changes
Activision will expand its remit to World’s Edge, the Redmond studio behind Age of Empires, and Rare, the English studio behind Sea of Thieves. Activision will also develop the next Halo game, led by what Booty’s memo calls “a new, purpose-built team that is separate from ongoing development and plans for Call of Duty.” A small team at Halo Studios will stay on to support the Halo community and Halo’s current, in-market games.
Bethesda will expand its remit to include Obsidian, which keeps working on its current projects, including Grounded, plus a new Fallout project made with Bethesda Game Studios. King, the maker of Candy Crush, will expand its remit to include Microsoft Casual Games. Playground and Turn 10 will come together as one studio focused on the Forza and Fable franchises.
Booty framed the reshuffle as a way to run fewer business units: “The goal is to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise.”
Activision president Rob Kostich said in a statement that the company has “already begun assembling a purpose-built team, unique in capability and talent”. The aim, he said, is to “make the greatest Halo game ever, worthy of its universe and legacy, while staying true to what made players love it in the first place.”
The cuts in context
The 268 roles being eliminated span Halo Studios, other first-party studios, and “the XGS management and central functions layer,” according to Booty’s memo. He said the moves completed since July, including the studio divestitures, bring Microsoft “roughly three-quarters of the way through previously announced restructuring.”
Those 268 roles are part of, not in addition to, the roughly 3,200 Xbox job cuts Microsoft announced in July, about 20% of the division, GeekWire reported, citing Microsoft. “The latest Xbox cuts are part of those previously announced numbers,” GeekWire said.
In all, Microsoft cut fewer than 600 jobs globally on Tuesday, including the 268 Xbox roles, with about 300 in Washington state, GeekWire reported, citing the company; the cuts beyond Xbox came in areas including cloud, AI, marketing and research. Microsoft described the cuts outside Xbox as part of the normal course of business, as teams reevaluated their needs, with no single cause behind the layoffs, GeekWire reported.
The studios leaving Microsoft
In August, Compulsion and Double Fine returned to management along with their intellectual property, back catalogs and runway funding, according to the memo. Undead Labs has now successfully transitioned, according to the memo, on similar terms; with a new publisher, it will release State of Decay 3 day one on Game Pass.
Ninja Theory, maker of the Hellblade series, faces a proposed closure. Booty’s memo said two separate agreements to hand off the studio fell through: “Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward.” The memo describes the closure as proposed and under consultation, not decided.
What’s next
Booty said Xbox will hold a town hall on Oct. 6: “At our October 6 town hall, we will come together as an ALL-XBOX team.” Consultation with Arkane, already underway, is expected to continue through the end of the year, per the memo. GeekWire reported that more details on Microsoft’s Washington state cuts will likely emerge later through a WARN notice filed with state employment officials.