Xbox 268 layoffs are part of a much larger studio reset that moves the next Halo to a purpose-built Activision team, combines Playground Games and Turn 10, places Obsidian under Bethesda and leaves Ninja Theory facing a proposed closure.
What the Xbox 268 layoffs change immediately
Microsoft says 268 roles are being eliminated across Halo Studios, other first-party studios, and Xbox Game Studios management and central functions. Matt Booty’s internal memo, published publicly on Xbox Wire, says the company is now roughly three-quarters through the restructuring announced earlier in 2026.
The human impact comes first. These are jobs, careers and teams being disrupted. The corporate chart matters because it determines where major games go next, but the cost of the reset is being carried by real people.
Activision is building the next Halo
The biggest franchise change is explicit: Activision will develop the next Halo title through a new purpose-built team that Xbox says is separate from ongoing Call of Duty development. A smaller Halo Studios team will remain to support the Halo community and games already in market.
That does not mean Call of Duty developers have simply been told to reskin their current game into Halo. It means Activision’s organization now owns the next project, with a dedicated team being built for it. Xbox has not announced a title, release date, platforms or gameplay direction in this memo.
Fable and Forza are being pulled into one studio
Playground Games and Turn 10 are being combined into one studio focused on Forza and Fable. The two teams have collaborated for years, but formal consolidation changes the management structure around three of Xbox’s most visible brands: Forza Horizon, Forza Motorsport and Fable.
The memo does not say Forza Motorsport is canceled, and it does not announce a delay to Fable. Those are exactly the gaps that can turn into internet certainty when everyone sprints ahead of the source. For now, the confirmed fact is the studio combination and its stated franchise focus.
Obsidian moves under Bethesda
Bethesda’s remit expands to include Obsidian. Xbox specifically says Obsidian will continue its current projects, including Grounded and a new Fallout collaboration with Bethesda Game Studios.
Undead Labs has transitioned away from Microsoft ownership on terms similar to Compulsion and Double Fine, but State of Decay 3 is still planned as a day-one Game Pass release with a new publisher. Divestiture does not automatically mean a game disappears.
Ninja Theory is the most worrying unresolved piece
Xbox says two proposed agreements involving Ninja Theory fell through. Microsoft is beginning consultation with employees on a proposed closure while continuing to explore other paths. Arkane consultation is also still underway through the end of the year.
The wording matters: proposed closure is not the same thing as a completed closure. Until consultation finishes or Microsoft announces another outcome, reporting it as already closed would be inaccurate.
What players should watch next
For Halo fans, the next meaningful signal is who leads Activision’s purpose-built Halo team, what project it announces and how much continuity remains with the people and technology already supporting Halo.
For Fable and Forza players, watch for concrete statements about project leadership and release plans. For Ninja Theory and Arkane, wait for formal outcomes rather than treating speculation as fact.
Microsoft calls this a reset. From a player’s perspective, it is a redistribution of creative ownership across some of the biggest names in Xbox. From an employee’s perspective, it is also another painful round of uncertainty. Both truths belong in the story.
ZerotoBeast take: the next Halo moving to Activision is the headline players will remember, but the 268 lost roles and unresolved studio futures are the part that should not be reduced to corporate chess.
