Xbox hands next Halo game to Activision-led team, Bethesda expands to include Obsidian

Xbox is making one of its biggest first-party studio changes yet, with Activision taking responsibility for the next Halo game as Microsoft continues its sweeping restructuring of the gaming business. The next Halo title will be developed by a new purpose-built team under Activision, separate from the teams working on Call of Duty. Microsoft says a smaller team at Halo Studios will remain focused on supporting the existing Halo community and games already on the market.

Activision and Bethesda are expanding their Xbox roles

Activision’s expanded responsibilities will not stop with Halo. Microsoft says the publisher will also take responsibility for World’s Edge and Rare, bringing more of Xbox’s first-party operations under its organization. A report from last month hinted that Xbox reportedly explored having Activision help develop Halo game. Well, now that’s official.

At the same time, Bethesda is expanding its remit to include Obsidian. Obsidian will continue its existing projects, including Grounded, alongside the new Fallout project being developed in collaboration with Bethesda Game Studios. The changes are part of a broader Xbox reset that will operate with fewer business units and bringing together teams that already work closely with one another.

King will also take responsibility for Microsoft Casual Games, while Playground Games and Turn 10 are being combined into a single studio focused on Forza and Fable.

Xbox is also cutting jobs and changing its studio lineup

The restructuring comes alongside 268 employees being laid off across Halo Studios, other first-party studios, and Xbox Game Studios’ management and central functions. Microsoft also provided updates on several studios. Compulsion and Double Fine have returned to independent management arrangements, while Undead Labs has completed a similar transition and will release State of Decay 3 day one on Game Pass with a new publisher.

The situation is more uncertain for Ninja Theory. Microsoft said two separate agreements fell through and it will begin consultation with employees over a proposed closure, while continuing to explore alternatives. Consultation with Arkane is also still underway.