Xbox continues its “reset” with dramatic restructuring
Recorded: Sept. 22, 2026, 5 p.m.
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Shuffling the deck chairs: Xbox continues its "reset" with dramatic restructuring - Ars Technica Skip to content Ars Technica home Sections Forum Subscribe Search AI Biz & IT Cars Culture Gaming Health Policy Science Security Space Tech Feature Reviews AI Biz & IT Cars Culture Gaming Health Policy Science Security Space Tech Forum Subscribe Story text Size Small Width Standard Links Standard * Subscribers only Pin to story Theme HyperLight Day & Night Dark System Search Sign In That oughta do it Shuffling the deck chairs: Xbox continues its “reset” with dramatic restructuring Activision gets Halo, Obsidian becomes part of Bethesda, and more internal shake-ups. Kyle Orland Sep 22, 2026 11:30 am | 49 The tumbling continues.
The tumbling continues.
Text Story text Size Small Width Standard Links Standard * Subscribers only Minimize to nav When Xbox announced sweeping layoffs in July as part of a brutal “reset” for the gaming brand, Xbox CEO Asha Sharma said part of the pre-existing problem in the gaming unit was “teams, studios, and functions [that] often operate independently, [making it] harder to work toward a shared goal.” Today, the company announced a radical restructuring of its internal studios that is seemingly designed to reduce that “independence” for the teams behind some of gaming’s biggest franchises. In the world of more RPG-infused Xbox games, Obsidian—the studio behind games like Fallout: New Vegas, Avowed, and The Outer Worlds—will now become part of Bethesda. There, the team will continue work on a new Grounded game and a “new Fallout project made in collaboration with Bethesda Game Studios,” Microsoft announced. Kyle Orland Kyle Orland Kyle Orland has been the Senior Gaming Editor at Ars Technica since 2012, writing primarily about the business, tech, and culture behind video games. He has journalism and computer science degrees from University of Maryland. He once wrote a whole book about Minesweeper. 49 Comments Comments Forum view Loading comments... Prev story Next story Most Read 1. 2. 3. 4. 5. Customize Ars Technica has been separating the signal from More Contact Manage Preferences |
Xbox is undergoing a significant internal restructuring and a “reset” of its gaming brand, driven by a desire to reduce the operational independence of various studios and functions to facilitate a shared focus. This move stems from concerns raised by Xbox CEO Asha Sharma, who previously indicated that independent teams made it difficult to work toward collective goals, which she linked to slower decision-making and blurred accountability within the organization. The restructuring aims to strengthen franchises and games by consolidating business units, aligning closely related groups, and concentrating publishing expertise. A primary component of this restructuring involves major shifts in franchise ownership and studio alignment. The Halo franchise is being integrated under the control of Activision, the maker of Call of Duty. Microsoft indicated that Halo Studios, formerly 343 Industries, will remain as a small team dedicated to supporting the player community while Activision assumes oversight. Activision President Rob Kostich emphasized the ambition to create the greatest Halo game, suggesting the newly assembled team will possess a unique combination of capability to deliver this next chapter. Furthermore, Activision will also assume control over the studios Rare, responsible for Sea of Thieves, and the stewards of World’s Edge, which manages Age of Empires. In the realm of RPG-infused Xbox games, the studio Obsidian, responsible for titles such as Fallout: New Vegas, Avowed, and The Outer Worlds, will be incorporated into Bethesda. This move will allow the team to continue development on a new Grounded game and a Fallout project in collaboration with Bethesda Game Studios. Other internal consolidations include the merger of Microsoft Casual Games, which handles titles like Solitaire and Minesweeper, with the Candy Crush studio King. Additionally, Playground Games, which develops Fable and Forza Horizon, and Turn 10, responsible for Forza Motorsport, are to be merged into a single unified team. Microsoft has also divested several studios, including Compulsion, Undead Labs, and Double Fine, which previously managed titles such as We Happy Few, State of Decay, Psychonauts, and Kiln; in some cases, these entities bought themselves into independent studios. This streamlining effort is part of a larger strategy to reduce the management layers within the company. The company has already initiated substantial layoffs, with the process currently being approximately three-quarters complete out of the planned three thousand two hundred positions eliminated. The overall objective of these dramatic internal moves is to refocus investment on higher priority projects by creating more streamlined organizational structures. |