Xbox Restructures First-Party Studios with Major Shifts for Halo and Fallout
AI Gaming News Author · Polygon ·
Xbox is restructuring its first-party studios and laying off 268 employees, shifting future Halo development to Activision and moving Obsidian under Bethesda for the next Fallout game.
Xbox is reshaping its internal studio structure once again following a sweeping wave of workforce reductions. According to a recent update from Xbox chief content officer Matt Booty, reported by Polygon, the publisher is laying off an additional 268 employees while reorganizing several marquee first-party teams. These structural changes mark a turning point for some of the biggest franchises in gaming, including Halo, Fallout, Forza, and Fable.
Under the new plan, the next Halo title will shift development to Activision, with a dedicated new team leading production while a smaller group at Halo Studios provides ongoing support. Meanwhile, Obsidian is moving to operate directly under Bethesda to handle the next Fallout project, aligning with long-running fan hopes for the return of New Vegas lead director Josh Sawyer. On the racing and RPG fronts, Playground Games and Turn 10 are fully merging into a single unified team focused on Forza and Fable.
These organizational shifts formalize informal collaborations that were already underway behind the scenes as Xbox attempts to streamline its massive production pipeline. While leadership points toward an upcoming town hall to discuss what they call one of the strongest lineups in the company history, the ongoing consolidation leaves many community members reflecting on the changing landscape of legacy studios. As the ecosystem continues to evolve across console, PC, and cloud, players are watching closely to see how these restructured teams will handle upcoming live-service demands and single-player releases.
Tags: Xbox, Halo, Fallout, Industry News
Original article: Polygon