Xbox Reset has entered its next major phase, with Microsoft changing where several of its best-known studios and franchises sit inside Xbox. The September 22 reorganisation cuts 268 more roles, moves the next Halo game to a new Activision team, places Rare and World’s Edge under Activision’s remit, moves Obsidian under Bethesda, combines Playground Games with Turn 10, and shifts Microsoft Casual Games under King.
The same Xbox Reset update confirms that Undead Labs has completed its separation from Xbox, Ninja Theory is entering consultation on a proposed closure after two agreements fell through, and Arkane remains in consultation through the end of 2026. Microsoft says the actions completed since July put the company roughly three-quarters of the way through the wider restructuring.
Xbox Reset: every studio and franchise affected
Image credit: Microsoft / Xbox.
| Studio or franchise | September 22 status | What changes |
|---|---|---|
| Halo | Next title goes to a new Activision team | Halo Studios keeps a smaller support team |
| Rare | Moves under Activision remit | Rare remains Microsoft-owned |
| World’s Edge | Moves under Activision remit | Age of Empires studio changes reporting structure |
| Obsidian | Moves under Bethesda | Grounded and the Fallout collaboration continue |
| Playground Games + Turn 10 | One combined studio | Focus on Forza and Fable |
| Microsoft Casual Games | Moves under King | Casual game operations combined |
| Undead Labs | Independent and employee-owned | State of Decay 3 continues |
| Ninja Theory | Proposed closure consultation | Other paths still being explored |
| Arkane | Consultation continues | No final exit or closure announced |
Microsoft published these changes in the official September 22 Xbox memo. It says the goal of the Xbox Reset is to operate fewer business units, align groups that already work closely together and focus publishing expertise.
Halo moves to a purpose-built Activision team
The most visible franchise change in the Xbox Reset is Halo. Activision will develop the next Halo title through a new purpose-built team that Microsoft says is separate from ongoing Call of Duty development.
Halo Studios is not disappearing. A smaller team will support the Halo community and games already in market. See Who Is Making the Next Halo Game? for the separate developer question.
Rare and World’s Edge move under Activision
Rare and World’s Edge also move under Activision’s remit in the Xbox Reset. This is an internal Microsoft reorganisation, not an external sale. Rare remains Microsoft-owned, while Activision becomes the organisational unit overseeing it.
Our Who Owns Rare After the Xbox Reset? page separates ownership from operational remit.
Obsidian moves under Bethesda
Bethesda’s remit expands to include Obsidian in the Xbox Reset. Xbox says Obsidian continues its current work, including Grounded and a new Fallout project made in collaboration with Bethesda Game Studios.
The memo does not say Obsidian is closing or being dissolved. It is being moved into Bethesda’s organisational umbrella while its announced projects continue.
Playground Games and Turn 10 become one studio
Playground Games and Turn 10 are formally combined in the Xbox Reset. Xbox says they have been creative and franchise partners for more than a decade and will now operate as one studio focused on Forza and Fable.
Xbox does not announce a new combined studio name in the memo. See Why Are Playground Games and Turn 10 Merging? for the focused explanation.
Undead Labs leaves Xbox
Undead Labs has completed its separation as part of the Xbox Reset. The studio says it is now independent and employee-owned, while State of Decay 3 remains in active development.
The official Undead Labs statement says the game is in alpha, still targeting a closed beta before the end of 2026, and planned for 2027 on Xbox, Game Pass, PC and PlayStation.
Ninja Theory could close
Ninja Theory has the most serious unresolved position in the Xbox Reset. Microsoft says two separate agreements fell through and it will begin employee consultation on a proposed closure while continuing to explore other paths.
That is not a completed shutdown. See Is Ninja Theory Closing? for the current status.
Arkane remains unresolved
Arkane is also unresolved after the latest Xbox Reset. Microsoft says consultation remains underway and is expected to continue through the end of the year.
The company has not announced that Arkane has left Xbox, been sold or closed. See Is Arkane Leaving Xbox? for that distinction.
Microsoft Casual Games moves under King
The Xbox Reset also brings Microsoft Casual Games under King’s remit. Xbox describes this as uniting two major casual game design and live-operations groups inside Microsoft.
How many jobs are being cut?
The September phase of the Xbox Reset eliminates 268 roles across Halo Studios, other first-party studios, and Xbox Game Studios management and central functions.
The July reset announcement said approximately 3,200 Xbox roles would be reduced across FY27. Microsoft now says completed actions bring it roughly three-quarters of the way through that plan.
What happens next?
The Xbox Reset is not finished. Arkane consultation continues, Ninja Theory has only begun its proposed-closure process, and Microsoft plans an all-Xbox town hall on October 6.
For players, the useful line is between confirmed moves and unresolved consultations. Halo, Rare, World’s Edge, Obsidian, Microsoft Casual Games and the Playground/Turn 10 combination have confirmed new structures. Ninja Theory and Arkane still do not have final outcomes.
