Microsoft is restructuring Xbox's internal organization, transferring the Halo franchise to Activision while consolidating development studios under Bethesda's banner.
Microsoft has announced significant changes to Xbox's organizational structure as part of an ongoing reset of the gaming division.
The most notable shift involves moving the Halo franchise from 343 Industries to Activision, marking a major change for the sci-fi shooter series that has been central to Xbox's identity for two decades. The move consolidates Halo development within Activision's existing portfolio.
Obsidian Entertainment, the RPG specialist behind titles like Greedfall and The Outer Worlds, is now integrated fully into Bethesda Softworks rather than operating as an independent Xbox studio. This aligns the developer more closely with Bethesda's game development priorities.
These changes reflect Microsoft's broader effort to streamline Xbox's studio operations following significant layoffs earlier this year that affected nearly 1,900 employees across the gaming division. The company has been restructuring its gaming portfolio to focus on profitable titles and consolidate overlapping development efforts.
The restructuring also comes as Microsoft faces competitive pressure from PlayStation and Nintendo, while managing its commitment to Game Pass and cloud gaming initiatives.
Microsoft has not announced specific timelines for how these organizational changes will affect upcoming titles or development schedules. The company previously stated its reset aims to improve efficiency and focus resources on core franchises and future growth areas.
The moves represent one of the largest internal reorganizations at Xbox in recent years and signal Microsoft's willingness to make fundamental changes to how it manages its gaming business. Whether this restructuring improves development output and game quality remains dependent on execution across the reorganized studios.
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