Xbox is radically revamping Halo and Rare by switching to Activision
Five months after laying off 1,600 employees, Xbox has announced further workforce consolidation. Xbox content chief Matt Booty revealed on Tuesday that another 268 employees across various Xbox departments will be laid off, and several in-house studios will also be restructured.
Four major Xbox franchises will be affected by these changes: Halo, Fallout, Forza, and Fable. Rare, the developers of Sea of Thieves, are also joining Activision.
In a new blog post, Booty also announced that the next Halo title will be developed by Activision. The game will be produced by a new team, but a smaller team from Halo Studios will continue to support the franchise. Activision will also continue to oversee the Call of Duty franchise, according to Booty.
What’s going on with Fallout?
Obsidian, the studio behind Fallout: New Vegas, will now operate under the Bethesda brand. Microsoft announced that Obsidian’s ongoing projects—including the next Fallout game—will continue as planned. According to previous reports, Josh Sawyer, the lead director of New Vegas, will take over the direction of the new Fallout game. Bethesda remains focused on The Elder Scrolls 6 but has already begun pre-production on Fallout 5, scheduled for early 2026.
Playground Games and Turn 10 will fully merge into a single studio focused on Forza and Fable. “King will expand his role to include Microsoft Casual Games, thus uniting our two world-leading companies in casual game design and live operations,” the statement continued.
Many of these changes formalize the collaborations that were already taking place behind the scenes between the studios. Obsidian, for example, developed its Fallout game in partnership with Bethesda.
Earlier this summer, Xbox parted ways with its internal studios, including Compulsion Games, Undead Labs, and Double Fine. While these studios retained their brand rights and game catalogs, the publisher has now announced that no agreement could be reached with Ninja Theory, the studio behind Devil May Cry. Arkane, known for the Dishonored stealth series, is still in negotiations with Microsoft.
Xbox announces that it will soon hold a staff meeting with all remaining employees and studios to “reflect on our progress and take a look at one of the strongest game lineups in our history”.
