Xbox Hands the Next Halo Game to Activision, and Moves to Close Hellblade Studio Ninja Theory After 268 More Layoffs
Xbox is cutting deeper into its own first-party lineup. On September 22, Chief Content Officer Matt Booty sent staff a memo titled “Continuing Our Reset,” confirming 268 more layoffs across Halo Studios and other teams, along with a sweeping reshuffle that hands the next mainline Halo game to Activision and pushes Hellblade developer Ninja Theory toward closure.
A Fourth Round Tied to the Same Plan
Xbox says the 268 cuts bring it roughly three-quarters of the way through the 3,200-person reduction plan that CEO Asha Sharma laid out back in July, when she argued that technology “gets better when it gets simpler, not bigger.” That July announcement already covered an initial wave of 1,600 layoffs, and Booty’s memo says the remaining reductions will continue throughout the next fiscal year.
Halo Moves to Activision
The biggest change targets Halo itself. A newly formed team inside Call of Duty publisher Activision will now build the next mainline Halo game, while what’s left of Halo Studios, the developer formerly known as 343 Industries, shrinks down to a smaller group supporting existing releases and the community. Rare and World’s Edge, the studio behind Age of Empires, are also moving under Activision’s oversight.
Obsidian, Turn 10, and a Wave of Mergers
Obsidian Entertainment is folding into Bethesda Softworks, where it’ll continue Grounded alongside a new collaboration with Bethesda Game Studios on Fallout. Turn 10 Studios and Playground Games, the team behind Fable’s decade-long reboot, are formally merging into a single studio built around the Forza and Fable franchises. Microsoft’s casual games division is also moving under mobile publisher King.
Ninja Theory’s next game, Senua, was revealed just three months before the studio’s closure was proposed.
Ninja Theory Faces Closure
Hellblade developer Ninja Theory is this round’s closure candidate. Booty said “we will now begin consultation with employees on a proposed closure,” while adding that Xbox is still exploring other paths forward. The studio had been expected to spin off independently after Xbox said in July that it had “entered terms to join new ownership with funding,” but Booty confirmed both of those agreements ultimately fell through.
The timing stings. Ninja Theory revealed its next game at the Xbox Games Showcase in June, titled simply Senua rather than Hellblade 3, with a 2027 release planned across Xbox Series X|S, PS5, and PC, alongside Game Pass. Xbox’s own coverage of the reveal noted it was the first time the studio’s entire 85-person team had worked together on one project in over 12 years. Multiple reports since have claimed the reveal was also meant to help attract a buyer for the studio. With Ninja Theory’s future now in question, so is Senua’s.
No formal cancellation has been issued for Senua, but its release now depends on what happens to Ninja Theory.
Part of a Bigger Pattern
Since Sharma’s July announcement, Compulsion Games and Double Fine Productions have both spun off as independent studios while keeping their IP and funding, Undead Labs has become an independent, employee-owned studio, with State of Decay 3 still on track for a day-one Game Pass launch, and Arkane Lyon remains in a separate consultation period expected to run through the end of the year.
The reshuffle also lands about two weeks after Xbox confirmed it had landed Hideo Kojima’s Physint as a new publishing partnership, a reminder that Xbox’s first-party lineup is shrinking and expanding at the same time.
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Picture Source: Xbox Game Studios, Ninja Theory
